DEER HUNTER'S PARTY:

Harry Reid's 'Roulette': Members of Congress are doing very well indeed under a plan comparable to the one President Bush would allow all Americans to participate in (George F. Will, 2/14/05, Newsweek)

Last week Howard Dean, almost certainly the next Democratic Party chairman, said: "I hate Republicans and everything they stand for." Either Dean means what he says, in which case he is as unhinged as the rest of the party's Michael Moore caucus, or he does not, in which case he is a blowhard like, well, Moore. Yet for several weeks Dean has been one of the four most conspicuous Democrats on the national stage.

Two of the others have been Ted Kennedy, the shrill essence of East Coast liberalism, and California Sen. Barbara Boxer, who comes from Marin County, a habitat for West Coast liberals who find the city across the Golden Gate Bridge too tepidly "progressive." The fourth, and most important, is Senate Minority Leader Harry Reid, who seems determined to earn the description Teddy Roosevelt applied to President John Tyler—"a politician of monumental littleness." [...]

Reid's hyperbole suggests that Deanspeak is contagious. In Reid's televised "response" to the president's State of the Union address—written before the address—he disparaged the idea of voluntary personal retirement accounts funded by portions of individuals' Social Security taxes as "Social Security roulette." This is the crux of the Democrats' argument against Bush's plan: Equities markets are terribly risky—indeed, are as irrational and risky as roulette. Think about that.

Roulette is a game without any element of skill. By comparing the investment of some Social Security funds in stocks and bonds to gambling on roulette, Reid is saying that the risks and rewards of America's capital markets, which are the foundation of the nation's economic rationality and prosperity, are as random as the caroms of the ball in a roulette wheel. This, from a national leader, is amazing.

It is especially so for a reason Bush delivered with a rhetorical rapier thrust in his State of the Union address. After saying that the 4 percentage points of Social Security taxes could be invested only in a few broadly diversified stock and bond funds, Bush pointedly said to the assembled representatives and senators: "Personal retirement accounts should be familiar to federal employees, because you already have something similar, called the Thrift Savings Plan, which lets workers deposit a portion of their paychecks into any of five different broadly based investment funds." Touché.

Begun in 1987, the Thrift Savings Plan, which as of December 2004 had assets of $152 billion, is a retirement-savings plan open to all civilian federal employees, including senators, and all members of the uniformed services.

They can invest as much as 14 percent of their salaries in one of five retirement funds. Consider the rate of return of C Fund, one of the five. It is a common-stock fund, so it should represent the risks that Reid thinks should terrify Americans:

In only four of 17 years has the rate of return been negative. But in 11 years the rate has been greater than 10 percent, in eight years it has been greater than 20 percent, in four years it has been greater than 30 percent. The compound annual rate of return for the last 10 years has been 12 percent, and the return over the 17 years has been 12.1 percent.

We nicknamed Howard Dean the Deer Hunter during the primaries because he seemed to have the same determination to put one in his own brainpan as the Christopher Walken character in the film. He is the perfect spokesman for what remains of the Democratic Party.

Posted by Orrin Judd at February 7, 2005 2:56 PM