Atlas Shrugged: The Mocking

Monday, April 13, 2015

The Patron Of My Patron Is Not My Patron

Pete Peterson says that we must cut Social Security and Medicare because debt is out of control.

Peterson helped fund the New America Foundation.

The New America Foundation helped fund Megan McArdle.

Megan McArdle says we must cut Social Security and Medicare.

Megan McArdle wrote a fawning article on Pete Peterson.

Megan McArdle does not provide a disclaimer saying that she has received money that partially came from Pete Peterson when she writes about Social Security.

Let's take a look at that tribute article from 2014.

Twelve and a half trillion dollars. That’s how much our federal government owes to others as the U.S. rings in 2014. Add to that our hidden debt: the additional trillions not yet on the books but promised to millions of people to pay for their retirement and health care in the future. How is our nation going to pay these mushrooming bills?

That’s the question that Pete Peterson would like to see answered, and as soon as possible. The 87-year-old billionaire created the Peter G. Peterson Foundation with an aim very different from the usual charitable aspiration: to advocate for the budget balancing he believes the nation so desperately needs. To nudge the U.S. in more fiscally cautious directions (even at the price of tax increases that many of his natural allies t hink would create their own economic problems), his foundation has poured tens of millions of dollars into everything from video games on responsible finance to annual budget conclaves on the dangers of a large national debt.

Education and ire

The Peterson Foundation’s first task is education. It expends a lot of money and effort making people aware that there is a serious problem in our federal treasury. If you hear someone talking about entitlements or debt today, chances are they have had their thinking informed by a Peterson report or event. The foundation’s annual Fiscal Summit is rapidly becoming a Who’s Who of serious thinkers on this topic—and the ones who aren’t on the podium are often in the audience, furiously taking notes.

The foundation’s educational outreach extends not just to experts but to the general public, particularly college students—who after all will be stuck with the check. It has sponsored the production of an array of multimedia, from the 2008 documentary film I.O.U.S.A., which premiered at the Sundance Festival, to an array of perky if grim digital leaflets.

 As philanthropic efforts go, attacking the nation’s budget deficit may seem curiously unrewarding. Donors to colleges and art museums get prominent buildings named for them. Donors to African poverty get their pictures in glossy magazines along with Bono. Donors promoting debt reduction get fan mail from accountants and small businessmen.

Deepening national thinking about deficits, though, is important. Indeed, it is one of the most important national issues of our age. A budget crisis, after all, has the power to override every other
policy priority.

Yet it’s also a thankless cause. In today’s fiscal environment—with the economy drifting, tax revenues lackluster, and all those entitlement promises coming due—budget sanity means taking things away from people. Spending will have to be cut, taxes may have to be raised. Confronting austerity tends to spark a lot of ire.

And much ire has been poured onto the courtly figure of Pete Peterson. Liberal economist Dean Baker has called him one of “the granny bashers, intent on privatizing Social Security.” Peterson can be a lightning rod, particularly for left-wing groups that revile the idea of reforming entitlements.

So why is Peterson doing this? What makes him want to dedicate his golden years, and a considerable chunk of his personal fortune, to being the somber voice of warning instead of the sunny voice of assurance?


In his ramble through advertising, academe, manufacturing, politics, then finance, Peterson showed an uncanny knack for being in the right place at the right time. “I’m a great believer in dumb luck,” he told me, but both in person and in his biography, the picture that emerges is of someone who is always open to opportunity, and willing to pursue it with inexorable resolve whenever he stumbled across it. Just as his father took the worst job on the railroad and turned it into a small business capable of supporting a family and multiple employees, Pete Peterson turned accidents into successes.

It probably helped that he was a bit of an outsider, someone with a different perspective on things (starting with the times his mother made him go to school in a frilly Greek blouse, which will make any boy a fighter). There are many points in Peterson’s long career that contributed to his current crusade against deficits: his father’s thrift, his long career in finance, his various episodes of public service. But the first time the world got to see Pete Peterson in action as an outsider who quietly steps in and finds a way to help a broken system heal itself was when John D. Rockefeller III called.


A cool head in a crisis

Peterson had the funds to put that belief into practice once his Blackstone investment firm went public. And by then, he’d developed a cause that didn’t already have its own telethon: restoring America to sane budgeting. A solid Midwestern Republican, Peterson was shocked by the accumulating budget deficits of our current generation—from a slight surplus in 1960, to a deficit of 2.1 percent of GDP in 1971, 2.7 percent in 1980, 5.0 percent in 1986, 10.1 percent in 2009, and 7.0 percent in 2012. This offended his deep-rooted drive for “economia!,” and since 2008 he has committed $1 billion to his deficit-fighting foundation.

For Peterson, ringing a fire bell on this topic feels like his philanthropic calling. “I would find it difficult to spend all of my time and energy on kind of reacting to standard requests,” he recently told the Bridgespan Group in a video interview. “It just wouldn’t be exciting and challenging…. I need challenges.”

Even with $1 billion and an army of advocates on the job, though, can the man with a passion make the necessary impression in Washington, where challenges often turn out to be mystifyingly complicated, and common sense isn’t all that common? Can he overcome today’s special interests and reservoirs of political inertia?

Peterson has navigated himself, and his companies, through some tight spots before. That’s why Lehman made him CEO just a few weeks after joining the firm, when losses in its government-bond department caused an internal crisis. Perhaps someone with a passion for budget balancing is just what Washington needs.

One of the most interesting things about the Peterson Foundation’s efforts is that it hasn’t pushed a specific agenda on the public, or funded ideological forces to do so at arm’s length. Its politically broad investments have encouraged scholars of all perspectives to take ownership of the problem. It has made brainstorming and raising of awareness its work.
Yet if no one takes action, all of this will eventually be for naught. Peterson would rather that the U.S. fix the situation now. Budget problems are easiest to control when tackled early, for the same reason that retirement experts urge people not to wait until they’re 50 to start funding their 401(k)s. But Washington’s short-term thinking has, if anything, gotten worse in recent years. Observers used to lament that policymaking was dominated by the two-year House of Representatives election cycle; now lawmakers lurch from crisis to crisis with political cycles measured in months or weeks.

At some point, Washington is going to have to make some adjustments. Either voters will get anxious enough about our debt to force politicians to act in time, or insolvency is going to make all the terrible choices for the nation. Plans made when things are falling apart can be clumsy ones, and all the mathematical momentum is against you at that point.

The U.S. will be better equipped to make good policy if it has already made the hard calculations and had the necessary discussions about economic realities and tradeoffs long before the time of financial reckoning. Those are the undertakings that the Peterson Foundation is trying to encourage right now, well before an economic emergency unfolds.
The Greeks have recently illustrated many of the bad things that can happen when national spending exceeds resources over an extended period. Greece offers a vivid example of a fate that no one wants. Luckily, Greece has also provided America with a man willing to use his money to help our country find a more responsible way to proceed.

Megan McArdle is a columnist for Bloomberg. Her book The Up Side of Down will be published in February.
One of better bits has McArdle's patented unprofessional habit of using what she must think are subtle word choices to slime the left and portray the right as wide-eyed innocents just tryin' to help a feller along.

[...]Peterson was determined to save foundations as an independent part of American civil society. He is credited with fending off more extreme proposals from the likes of Senator Al Gore, the future vice president’s father. It’s clear that this episode also shaped the way Peterson would approach his own giving when he later became wealthy enough to create his own foundation. Asked how the experience shaped his thinking on philanthropy, he paused for a moment, then smiled shyly. “I thought it was important for foundations to be innovative and do things in areas where no one else is going.”
Why not cover subjects as a journalist when those same subjects are funneling money to people who funnel money to you? It worked with the Koches; McArdle repeatedly defends them and simply denies she is connected to them. When someone points out that journalists are not supposed to do this without giving disclaimers she just lies and says she is giving full disclosures. If you try to pin her down she goes on the attack.

susanoftexas 1 day ago
Full disclosure: my husband once had a fellowship with the Charles G. Koch foundation.

At Reason magazine, where he still works as associate editor.

From Sourcewatch:

The Reason Foundation is a self-described "libertarian" [1] think tank. The Reason Foundation's projects include and, as well as Reason Magazine[2] It is part of the Atlas Economic Research Foundation network.
The Reason Foundation is funded, in part, by what are known as the "Koch Family Foundations,"[3] and David Koch serves as a Reason trustee. [4]

[From the list of Reason funders]
Between 1985 and 2009, the Reason Foundation received funding from the following sources, in the following amounts: [13]
Koch Family Foundations:
Charles G. Koch Foundation $57,000Claude R. Lambe Foundation $857,000David H. Koch Foundation $1,522,212

[Why does anyone care what the Koches do?]

Koch Industries is also a major polluter. During the 1990s, its faulty pipelines were responsible for more than 300 oil spills in five states, prompting a landmark penalty of $35 million from the Environmental Protection Agency (EPA). In Minnesota, it was fined an additional $8 million for discharging oil into streams. During the months leading up to the 2000 presidential elections, the company faced even more liability, in the form of a 97-count federal indictment charging it with concealing illegal releases of 91 metric tons of benzene, a known carcinogen, from its refinery in Corpus Christi, Texas. Koch Industries was ranked number 10 on the list of Toxic 100 Air Polluters by the Political Economy Research Institute in March, 2010. [1][2]
In a study released in the spring of 2010, the University of Massachusetts at Amherst’s Political Economy Research Institute named Koch Industries one of the United States’ top ten air polluters. [15]
Republican TiesIf convicted, the company faced fines of up to $352 million, plus possible jail time for company executives. After George W. Bush became president, however, the U.S. Justice Department dropped 88 of the charges. Two days before the trial, John Ashcroft settled for a plea bargain, in which Koch pled guilty to falsifying documents. All major charges were dropped, and Koch and Ashcroft settled the lawsuit for a fraction of that amount.
Koch had contributed $800,000 to the Bush election campaign and other Republican candidates.
Alex Beehler, assistant deputy under secretary of defense for Environment, Safety and Occupational Health, previously served at Koch as director of environmental and regulatory affairs and concurrently served at the Charles G. Koch Foundation as vice president for environmental projects. [16] Beehler was later nominated and re-nominated by the Bush White House, to become the U.S. Environmental Protection Agency’s Inspector General. [17]

Ms. McArdle also donated her time to the Koch's IHS [Institute For Humane Studies] 50th Anniversary Dinner; Charles Koch is its chairman.

There is no shame in being closely aligned with billionaires, as Ms. McArdle has noted. Everyone has to be paid by someone. Journalists should all be as open as possible when it comes to their actions, as Ms. McArdle has noted repeatedly in reference to Mr. Gleick.
35 people liked this.

McMegan 1 day agoin reply to susanoftexas
I am curious to know what you think that this little section has to do with my decision to donate my time to the Institute for Humane Studies, or how that constitutes my being "paid by someone".
19 people liked this.

susanoftexas 1 day agoin reply to McMegan
You want to know what your donation of your time to the Koch brothers has to do with your ties to the Koch brothers? Do you also want to know what your husband's continuing employment at Reason has to do with his ties to Reason?
13 people liked this.

McMegan 1 day agoin reply to susanoftexas
I didn't donate my time to "the Kochs"; I donated it to the Institute for Humane Studies, an organization whose goals I support. Is anyone who donates time or money to an organization to which George Soros donates also "tied to Soros"? Does that donation somehow constitute getting "paid by" George Soros?
36 people liked this
susanoftexas 1 day agoin reply to McMegan
So you deny that you are affiliated in any way with the Koch brothers.
7 people liked this.

McMegan1 day agoin reply to susanoftexas
I have met Charles Koch twice, for about a minute each time. I don't think I have never met David Koch. I receive no personal income from the Kochs, nor, to my knowledge, from any institution with which they are affiliated. I believe that David Koch is still a donor to the Reason Foundation, but I do not know that to be the case, and what I write is certainly not affected by that--except to the extent that the tedious disclosures mean that I spend somewhat less time making fun of the hilarious conspiracy-mongering than I otherwise would. The Kochs had nothing to do with my support of IHS, which predates my learning of their existence.

I'm curious, Susan: who's paying you to troll my blog? Could it be . . . SOROS??? Surely you wouldn't waste all this time to so little effect unless someone was paying you, would you?
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susanoftexas1 day agoin reply to McMegan
Like you, I donate my time.
11 people liked this.
Of course her ties where far more extensive than she let on. McArdle easily rationalizes that since she supports billionaires' goals anyway, taking their money doesn't compromise her work.

I can only imagine the amount of smug satisfaction it gave McArdle to tell me I was wasting my time by pointing out her lies. She knows that nobody cares if she lies, and if they do so what? She is backed by billions of dollars. Those who tell the truth are on their own.


ifthethunderdontgetya™³²®© said...

Pete, another of the wealthy psychopaths who make the world worse.

Susan of Texas said...

I"ll have you know he is a producer, sir!

Anatole David said...

Funny how money isn't so "fungible" when it comes to Megan.