From Our Future
Peter G. "Pete" Peterson, the billionaire businessman and anti-government crusader, died last week at the age of 91. He leaves behind family and friends who will miss him, and a vast coterie of consultants and politicians who may miss his checks even more. They can take comfort from the words of Percy Bysshe Shelley: "He doth not sleep/he hath awakened from the dream of life ..."
Peterson will be mourned by those who loved him. But that's no reason to forget the harm he has done, especially since his family vows to continue his work. His son, speaking on behalf of the foundation Peterson created, says that "we will carry on his legacy with passion and pride."
That legacy is marked by Pete Peterson's long war against Social Security and Medicare, his austerity economics, and the false aura of objectivity Peterson used to promote his ideology.
Behind his carefully stage-managed veneer of bipartisanship (his team once tried to get me suspended from a publication for calling him right-wing), Peterson engaged in a decades-long war on the social contract. Programs like Social Security and Medicare were his immediate targets, but his ultimate goal was even broader: He wanted to extinguish the ideal of public goods, and put an end to the notion that certain social programs should be universal.
Peterson took conservative ideas and gave them an undeserved air of truth and neutrality. Politicians who embraced them were more likely to receive a steady flow of high-dollar contributions and gaining entree to the right salons and alliances.
Thanks to Peterson, prominent journalists can make outlandish and inaccurate statements about "entitlement" programs, while still laying claim to journalistic objectivity. That's no mean feat on Peterson's part -- although it becomes easier when you can spend nearly half a billion dollars in four years to promote your agenda, as Peterson did. (Peterson engaged in his crusade for decades; his total spending isn't known.)
Peterson may be gone, but his ideology still holds sway in the corridors of political and media power.
Peterson was a corporate success at a young age, and then joined Richard Nixon's Cabinet. But he became a billionaire as co-founder of the Blackstone Group, one of four firms that exemplify what The Economist calls "the barbarian establishment." As that (hardly left-wing) publication writes:
"The standard operating procedures of private equity -- purchasing businesses, adding debt, minimizing taxes, cutting costs (and facilities and employment), extracting large fees -- are just the sort of things to aggravate popular anger about finance.
"Peterson promptly put his billions to work on a new mission: Cutting government programs, especially Medicare and Social Security, and reducing government deficits. (The fact that these moves would reduce the political incentive to tax billionaires is never mentioned in Peterson's work.)"
Peterson's sleight-of-hand trick, and it was a brilliant one, was to present his opinions as neutral and objective truth. As the New York Times reported in 2011:
"If some consider him Cassandra and others Chicken Little, Mr. Peterson considers himself, in self-deprecating (and self-interested) terms, as a data-driven businessman who 'simply did the math.'"
Here's some real math: Medicare saves lives, and "greater spending per beneficiary is associated with significantly lower mortality rates." So does Medicaid. Social Security lifts 22 million Americans out of poverty, including children and non-elderly adults.
The Peterson team claims that its proposals would exclude the poor, but cuts are a slippery slope. Social Security benefits are already meager, and any reductions -- including cuts to cost-of-living increases and increases in the eligibility age -- will lead to added poverty.
And poverty kills.Sleight of Hand
Deficits were Peterson's obsession. But when it came to economics, Peterson did the arithmetic, not "the math." His zero-sum approach to government budgets failed to recognize the wide range of policy choices that are open to governments or the ways that government spending can create economic growth.
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