Follow the Brits? Not bloody likely!

While we're on the subject of (not-so) good old blighty, Paul Krugman in the New York Times chimes in on the Social Security debate by doing something that Americans never do enough of: he meaningfully compares the USA with other countries. In this case it's Britain, a state that has undergone the sort of pension privatization scheme endorsed by Pres. Bush. And he notes ominously that "Britain's 20-year experience with privatization is a cautionary tale Americans should know about." He goes on:

The U.S. news media have provided readers and viewers with little information about how privatization has worked in other countries. Now my colleagues have even fewer excuses: there's an illuminating article on the British experience in The American Prospect, www.prospect.org, by Norma Cohen, a senior corporate reporter at The [not-very-leftie] Financial Times who covers pension issues.

Cohen doesn't mince words: she calls the current British system (one that emerged under Thatcher) "A Bloody Mess", and Krugman points out that "her conclusions match those expressed more discreetly in a recent report by Britain's Pensions Commission, which warns that at least 75 percent of those with private investment accounts will not have enough savings to provide 'adequate pensions.'" Here's what Cohen had to say in her piece:

Britain’s experiment with substituting private savings accounts for a portion of state benefits has been a failure. A shorthand explanation for what has gone wrong is that the costs and risks of running private investment accounts outweigh the value of the returns they are likely to earn. On average, fees and charges can reduce pension lump sums by up to 30 percent on retirement. The nation’s savings industry, which sells those private accounts, has already acknowledged this.

Krugman gleefully elaborates in his column:

Meanwhile, there is a growing consensus in Britain that privatization must be partly reversed. The Confederation of British Industry - the equivalent of the U.S. Chamber of Commerce - has called for an increase in guaranteed benefits to retirees, even if taxes have to be raised to pay for that increase. And the chief executive of Britain's National Association of Pension Funds speaks with admiration about a foreign system that "delivers efficiencies of scale that most companies would die for."

That country is ... yep, the US of A. Hey, something to crow about! Let's not spoil it. And for god's sake, let's see the U.S. media for once take a hard look at an issue through the comparative method, i.e., focus on broadly equivalent experiences of other countries. Not just once or twice, but continuously. If there's one easily justified, non-"partisan" way that the media canset the agenda and index coverage beyond the narrow confines of the American political establishment, it's through this sort of comparative method.


btw, kudos to Josh Marshall and The Daily Kos, who continue to rail against Pres. Bush's deceptions on Social Security (today's Daily Kos also uses Krugman to effectively undermine the Bush position).