Third Way: A Social Contract for the Digital Age

I’m basically hostile to the whole idea that what we need is a third way, some coalition of centrists organized around the idea of a set of agreed-upon, common-sense compromises.

That said, Third Way is out with memo which describes their centrist compromise vision. I won’t recap the whole thing, you can read it here:

What strikes me about some of these ‘ideas’ is how they basically simply recapitulate the bad status quo.

For example, number 4 (Boomer Corps) is offered as a solution to the problem that many baby boomers can’t afford to retire. The solution? Boomers can keep working at part-time jobs for low wages after they retire! Drum roll, problem solved!

Similarly, number 11 recognizes that Social Security isn’t an adequate pension and that most people have little else. Their proposal? Force employers to fund a portable pension plan at the rate of $0.50 per hour worked. The federal government would match the contribution at $1 for every $3 contributed by the employer. Thus workers would ‘save’ $1,333 per year more toward their retirement, which savings would of course almost certainly come out of their wages, since employers aren’t stupid and can understand ‘total compensation’.

A quick back of the envelope calculation predicts this would increase someone’s retirement nest egg by about $100k, assuming constant employment for 40 years and 4% annual returns.

Will $100k make a difference to someone’s retirement 40 years from now? Who knows. But if the problem is that Social Security isn’t enough, why not, you know, increase Social Security?

Anyway, what do you think? Are there good ideas here?

Bio-engineering a predator that culls the population.

Third Way, as nearly as I’ve been able to tell, is a right-leaning version of Clinton. They are in no way non-partisan.

Yes, I agree, but they certainly try to sell the idea that they are non-partisan.

Some of these proposals might be nice. Like, something a rational Congress might pass during a slow month. Absolutely none of them will motivate people to get out to vote, much less be enough to found a new political movement on. E.g. you can take any one of the common ideas from the “3-ideas-For-Liberals” thread and I would rather have it than all 15 of these 3rd way ideas. Fight global warming like the threat it is, Medicare for all, voting rights, money out of politics, etc. etc. Each of those issues are vital and can build real support behind them.

I am so not a fan of Third Way.

Largely they sound like Republicans from a bygone era, but I kinda like this one:

Innovation Trust Fund
First, the trust fund will invest in the types of high-risk, high-reward basic R&D that only the government will finance: those conducted at universities across the country, at our federal labs, and by agencies like NASA, the National Science Foundation, the Department of Energy, and the Defense Department. Second, the money will fund an expanded R&D tax credit to encourage and reward companies working to commercialize new technologies that they produce in the United States.

(I’d rather see pure research grants, no strings attached. For example, much of our technological progress last century came from advances in physics from research done at Universities. I don’t think there necessarily needs a commercialized incentive. But being pragmatic, I’d rather have that than what we have now.)

I haven’t quite grasped how they’re funding it beyond generic ‘close tax loopholes’ language.

Pretty much, but at $20 billion/year, it’s not that much in the context of trillion dollar budgets.

That agenda is both fairly weak tea and mostly in the wrong direction, so a pretty poor showing for the theoretical “radical center.”

I mean, there are some good ideas in there which would depend very much on the details: an investment bank and an innovation trust fund could both be good ideas if implemented properly. Likewise, broadband for all is a fine idea in theory. The Boomer Corp would actually be worthwhile if the wages were substantially higher, and if it were funded in a reasonable way, AND added on top of Social Security.

The biggest flaws in the overall agenda is that Third Way simply doesn’t address several big ticket items like health care (which in our system is a big part of employment), housing costs, or transportation (which both play a big role in where people can work.)

It sounds to me like a Silicon-Valley-focused idea of centrism without much ability to actually help most Americans in a meaningful way.

Two of the ideas (Boomer Corps and variable minimum wage) seem like ways to ensure the supply of cheap labor. The boomer one is obvious - if tutoring children is important, why pay only $12 / hr for someone to do it?

The variable minimum wage ensures there are onshore low-wage zones that employers can move work to.

The issue of low wages more generally is a huge issue in our economy that doesn’t get the attention it should.

Also, the baseline for discussion of wages is ridiculous. I agree that the $12/hr wage is low, but I’m sure the Third Way people were like, “That’s 165% of the minimum wage! That’s a big increase”. Of course, that assumes that the current $7.25/hr minimum wage is not a crap-tastic example of GOP gridlock and labor exploitation.

The biggest problem is that Social security isn’t really a functional retirement plan.

When I put money into my IRA, that money is getting invested, and actually increasing in value.

That’s not how it works with social security. We pay money into the system, and the government just spends that money. There’s no actual investment that takes place, so it doesn’t actually have any mechanism by which to grow your input to guarantee output.

In actuality, what happens with social security is essentially a straight up scam. We pay money to the government, which it uses to buy government bonds from itself. For all intents and purposes, it is just writing IOU’s, to itself, and then spending that money on other crap (including paying out current SS recipients).

So it doesn’t even rise to the level of putting our money into a lockbox and getting zero return on it… We put our money into the system, and it just gets spent. All we get is the hope that someone in the future will pay into the system, and that population growth will outpace any increases in lifespan.

Private retirement planning is a much better guarantee, in that I invest my money, and I actually get something in return. Now, the risk is that I could potentially make poor investments, but hell, if I really wanted to, I could just do the same thing that the government does and buy US Bonds and get a crappy return.

The big problem though, is that we’re kind of locked into this system as it stands. We’re stuck paying for SS, because since there’s literally no money in the bank from the previous expenditures, if people stopped paying into the system, then the system can’t pay out, and everyone who’s collecting is hosed.

But if we lay a mandatory private retirement system on top of it, then you may be able to, at some point in the future, make more significant changes to SS itself, perhaps retargeting it towards only those people who need it.

This isn’t to say that the plan presented there is good, but the idea of doing something along those lines is not inherently bad, and could potentially serve a useful purpose for dealing with this stuff down the line.

The obvious answer would be, “You can only afford $12/hr.”

It’s stupid that minimum wage wasn’t tacked to inflation.

It’s even more stupid that it still isn’t and never will be. It should be like $12/hour or something iirc, but instead people are gonna fight for $15, and if they win that $15 will have to last another 60+ years. Or we could actually fix the problem in the system, but no no that would make too much sense.

Is $12/hour sufficient for people not to live in poverty and/or not quality for government assistance? (I honestly don’t know, in some areas probably but certainly not most urban areas I imagine.) If not, then taxpayers are just subsidizing the Walmarts of the world (through government payouts to the employees), and I don’t understand how that’s supposed to be a good thing.

Spot on. My preferred tool to estimate this is the MIT Living Wage calculator.

In this area $12 would be considered livable for a single adult. That doesn’t hold true for larger cities and doesn’t work anywhere when you add a kid to the mix.

Cool link, thanks. Just under $13 here, which surprises me.
(As an aside, we (2 adults, no children) pay far more in housing than what they have listed. )

It’s called Social Security Insurance. It’s not an investment program. You don’t get your money back plus investment gains because it isn’t an investment. It’s a premium that determines your eligibility. You get other people’s money back. That’s how insurance works. The premium you pay to Cigna or Farmers or State Farm isn’t invested in an account for you to produce gains which are used to pay your claims. Other people’s money pays your claims.

I understand everything you said here, indeed some of what you said I explicitly stated later in that post. But the reality is that many people PERCEIVE Social Security to be a retirement plan.

Ultimately though, the idea of a mandatory retirement investment, at a low level, is probably not a terrible idea. Part of me rejects the idea of forcing people to do it, but part of me also thinks that folks who have the ability and choose not to are idiots. And there are a lot of idiots. I’m torn between wanting to try and help them by making them plan for their future, and saying “They’re adults, they can decide for themselves.” But at some point it ends up being the grasshopper and the ant, and I’m not super cool with just letting them suffer later in life because they were idiotic assholes when they were young.

And what’s gonna happen is that some of those jobs are just gonna end up being automated.

There are jobs which are simply not worth $15/hr. They simply don’t require enough skill to merit that wage. There was a time when they did, because human labor was the only alternative, but as automation improves, simple manual labor is becoming a skill that requires less and less human interaction.

They already have fast food places where human labor is largely removed from the equation.

There’s some truth there, but there is also a lot of people working full time for whom making even nominal contributions is an insurmountable burden. People already deciding between paying the gas bill, or buying groceries.

And they make up a far larger, and more consequential, demographic than those who can save and choose not to.