If you followed my live-econoblogging of last night's Republican debate at the Reagan Library, you know that Gov. Rick Perry of Texas refused to back down on his assertion that Social Security is a "Ponzi scheme." Bear in mind that Perry has been on the record with this position for a while, but most of the post-debate punditry focused on whether it was politically wise for him to so stridently restate the view.
Perry was clearly playing to his base — and maybe even providing some cover for his lack of a comprehensive economic plan compared to Mitt Romney, who laid out his jobs plan in detail prior to the debate. Regardless, he's certainly not the first person to call Social Security a Ponzi scheme, but he's the latest and arguably most prominent figure to completely misrepresent how Social Security actually works.
The Amazon Tax debate comes to an end. "Under the handshake deal, Amazon won a delay until at least September 2012 but will eventually collect state sales taxes." (SacBee)
Google buys Zagat, which sells the only piece of printed matter than anyone seems to actually buy anymore. Price? No details. Probably around the last ask for Zagat, $200 million (Less?). "The move is part of Google’s mission to improve its local products, which are now run by Google VP Marissa Mayer (Mayer has long been one of the most public faces at the company, and was head of Search for a decade)." (TechCrunch)
KPCC's AirTalk jumps in the stingy Baby Boomers story. Greedy solipsism or an aging generation finally, at long last, after decades of sacrifice, deciding to live it up? (KPCC.org)
The Social Security Administration's historian (yes, it has one) lays out exactly why Social Security is not a Ponzi scheme. "Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes." (ssa.gov)
ANOTHER UPDATE: President Obama has pitched his jobs plan to Congress and the public and I've got a quick reaction. Some intriguing ambiguity about whether we'll get an infrastructure bank, a subject I've blogged about. An I-Bank would have some definite benefits for Southern California, where the infrastucture is a-crumbling and there are thousands of unemployed construction workers.
UPDATE: As promised, I took a closer look at Perry's argument that Social Security is a Ponzi scheme. Social Security is not a Ponzi scheme, and here's why.
And so it ends. On the economy, the frontrunners — Mitt Romney and Rick Perry — promoted their own jobs records and attacked each other. On balance, Romney provided a more focused message on the country's future global competitiveness, which makes sense given his experience with Big Finance. This should resonate with Southern California, given the region's exposure to international trade. Perry stuck to his guns on Social Security and his insistence that it's a Ponzi scheme (which it isn't). This was a risky move, but one that should please his base. However, it also created a distraction from Topic A, which for many Americans is unemployment. "A monstrous lie to our kids" Perry called it, while if what he really wanted to do was talk about reforms to entitlement spending, he could have avoided this radical argument (although he's been on the record with this one for a while).
Carol Bartz is out as CEO of Yahoo, reportedly fired by phone call yesterday. Bartz was brought in to turn the Web pioneer around and redefine its identity after founder Jerry Yang and his board failed to sell company to Microsoft in 2008 and former Warner Bros. executive Terry Semel failed to turn Yahoo into a kind of full-service online media machine.
Back in 2008, when the Microsoft deal fell through, I wrote about how Yahoo, the key company of the Web 1.0 era, hooking up with Bill Gates and all that was definitely not of the Web 1.0 world was the only hope we had of beating back Google and its total dominance of Web 2.0. But that was before Facebook achieved critical mass.
Now Yahoo looks even more desperate and confused — even as observers acknowledge its still-massive Web presence. The company's identity crisis — which Bartz, a Silicon Valley veteran, tried to cure by returning Yahoo to its core as a tech firm — took root during the Semel years and culminated in 2006 when an executive wrote a scathing memo now referred to as the "Peanut Butter Manifesto."
An interesting comment came out of Gov. Jerry Brown's biotech mini-summit in San Diego yesterday, where he predicted that he'd be able to win over enough Republicans in the next three days to pass his "jobs-and-taxes proposal." This is from the LA Times PolitiCal blog:
"We all know this economy is not going to self-correct," said David Gollaher, president and chief executive of the California Healthcare Institute, a trade group for the biomedical industry. "San Diego and the U.S., we have the talent ... but it's going to take creativity on the part of our political leaders."
Actually, given enough time, the economy — nationally and regionally — will self-correct. The problem is that the nature of the financial crisis and its aftermath would drag out the process so much that the American Way of Life would be completely changed. We've endured what economists call a "balance sheet recession," in which businesses and consumers have to reorganize, renegotiate and rid themselves of debt. That's why we have such high unemployment. That's why why the stock market is so unstable. That why the yield on 10-year treasuries is below 2 percent. Everyone is too busy dealing with the debt orgy of the past 30 years to be able to concentrate on reviving demand.