Friday, February 11, 2005

You're Biased, I'm Not

A response to "You're Biased, I'm Not" by Dick Meyer -- in the "Against the Grain" column at, Feb 9, 2005.  Is it really a good idea for somebody at CBS News to go on record yet again denying bias?  You decide.

People who accuse other people of being biased while maintaining their own liberation from all bias are pre-sophomoric. I'm not sure they are freshmen. They are certainly fools.


If someone accuses you of being biased, the conversation is over. You're not going to convince them that you're not biased or that they are biased, too. Someone who plays the bias card does not want to understand another perspective even out of curiosity. They just want to hear things they agree with and be able to dismiss all the rest.

  -- Dick Meyer

[Read his article in order to fully understand my response.]

It seems to me that it is not the person who "plays the bias card" who is a fool. Rather, it is he who denies his own bias who is fooling himself.

When someone accuses me of bias, the conversation is not over; it has just begun. I am likely to confess it and ask the person to explain where he felt my bias crept in. If he does not convince me of my bias, I keep it to myself. No need to argue the inarguable, since, if I am indeed biased, then it goes without saying I would be blind to it.

But this does not mean that I disavow my opinion. There is no need to disavow or hide my opinion. Holding, articulating, even shouting my opinion at times, is entirely appropriate. Because that's what human beings do -- it's how we sort truth from fiction.

I love opinion. It's my favorite section of the newspaper. I perversely enjoy being riled by the op-ed pieces that annoy me, because they inspire me to sharpen, adapt and change my thinking on issues that matter to me. But when I see opinion outside the op-ed pages, I feel a kind of nausea. It is misrepresenting fact in the name of reporting it.

The weirdness creeps in (and it is creepy) when people disavow their bias. Do they think their readers are fools? Apparently so. It is no far stretch to prove bias at the NY Times or the Washington Times -- even outside their respective opinion pages.

However, I now get accused of being biased almost as much by the left as the right, but the e-mail from the left is now meaner.

Only a newsman would claim that just because one receives criticism from both the right and the left, he is hewing to the center. Imagine a drunk driver weaving down the road, banging into property on both sides. He would certainly get an equal number of complaints from either side of the road. Please don't offer this as evidence of his good sense of direction!

And yet I believe this is analogous to the way Dick Meyer rationalizes ignoring his own bias. But then I could be wrong. I'm biased, after all.

Thursday, February 10, 2005

Social Security Ads: Risk or Protection?

Three comments on the essay, "Social Security Ads: Risk or Protection?" at This essay considers a TV ad from Progress for America and a print ad from AARP. While have only minor criticisms to make of the pro-Social Security ad, I felt that some of their criticisms were wrong.

1. The essay suggests that Progress for America was wrong to use the word "retiree" when referring to the ratio of workers to retirees. They suggest that "beneficiary" is more appropriate because Social Security also pays benefits to non-retired survivors and disabled people.

In fact, the ad is correct to refer only to retirees because President Bush's reform plan is focused solely on the retirement fund of Social Security. The disability and survivor funds would be maintained as is. The SSA considers the revenue needs of each fund separately. Personal Retirement Accounts (PRAs) are only intended to divert retirement funds into equity accounts.

2. The essay mentions that FDR's grandson states that his grandfather would have opposed reforming Social Security. True.

It also fairly states that what FDR would or would not support is a matter of opinion. True.

Even if he opposed it today, it would not be clear if he would do so because he viewed PRAs as a bad idea, or if he were merely opposing it for partisan reasons, to support the political party he loved and led for many years. He is not alive to speak for himself.

So we would do well to take him at his word and read what he himself wrote about the future of Social Security. In his "Message to Congress on Social Security" on Jan. 17, 1935:, FDR wrote:

"In the important field of security for our old people, it seems necessary to adopt three principles: First, noncontributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities that in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans." [emphasis added]

Bush's proposal would create accounts invested in equity markets rather than annuities, but either would be self-supporting. It is doubtful that FDR could have foreseen massive participation in equity markets, since this has really only been made possible by modern telecommunications, computing and networking. But even he could foresee a self-supporting plan. Annuities bear risk to the borrower and provide security to the owner. The index funds touted by Bush do not, but provide higher returns to the owner. Still, both work by investing funds in equity markets and both are self-financed not taxpayer-financed.

The similarity between FDR's vision and Bush's proposal should be considered when thinking about what the father of Social Security would want 70 years later.

3. Like other essays, this essay remarks on the volatility of the stock market and mentions notable recent declines such as the 1987 mini-crash and the more distressing long-term slide from 2000 highs to the 2002 trough. I do not dispute the facts mentioned, but suggest that the essays omit another important fact, namely, that even five-year slides are insignificant when considered over the typical 49-year time period during which a worker pays FICA taxes.

I believe that, starting in the mid-1920s, there exists no 40-year period during which the US stock market has not yielded at least an average of 6% (and that is the floor). It is a mistake to let worry over potential short-term losses prevent an investor from reaping long-term returns. And retirement horizons are long-term.

Also, one needs to consider the effect of dollar-cost averaging which, simply stated, tells us that, given a steady stream of investment funds, the negative effects of bear markets is mitigated by the positive effects of bull markets. What matters, over the any given term, is whether assets rise in value in the end. It is important to point out that for terms of 20 years or longer, equity assets have always risen at rates exceeding the returns promised by Social Security.