The Pension Crisis in America (and elsewhere)

I was working through some archives recently, and rediscovered this gem by Thomas Friedman (now famous for “The World is Flat”), written during campaigning for the last US presidential elections:

Sometimes it’s useful to stand back and ask yourself: If I could vote for anyone for president other than George W. Bush or John Kerry, whom would I choose? I’d choose Bill Cosby – on the condition that he would talk as bluntly to white parents and kids about what they need to do if they want to succeed as he did to black kids and parents a few months ago.

The one thing that has gone totally missing, not only from this election, but from American politics, is national leaders who are actually ready to level with the public and even criticize their own constituencies. The columnist Michael Kinsley once observed that in American politics “a gaffe is when a politician tells the truth.” We could use a few really big gaffes right now. Because we have not one, but three baby booms bearing down at us, and without a massive injection of truth-telling they could all explode on the next president’s watch.
The leading edge of the American baby boom generation is now just two presidential terms away from claiming its Social Security and Medicare benefits. “With unfunded entitlement liabilities at $74 trillion in today’s dollars – an amount far exceeding the net worth of our entire national economy – and with payroll taxes needing to double to cover the projected costs of Social Security and Medicare, how can any serious person not call entitlement reform the transcendent domestic policy issue of our era?” asks former Commerce Secretary Peter G. Peterson, whose book on this subject, “Running on Empty,” provides a blueprint for a bipartisan solution to this problem for any president daring to lead.

The second group of boomers barreling down the highway are the young people in India, China and Eastern Europe, who in this increasingly flat world will be able to compete with your kids and mine more directly than ever for high-value-added jobs. Attention Wal-Mart shoppers: The Chinese and the Indians are not racing us to the bottom. They are racing us to the top. Young Indian and Chinese entrepreneurs are not content just to build our designs. They aspire to design the next wave of innovations and dominate those markets. Good jobs are being outsourced to them not simply because they’ll work for less, but because they are better educated in the math and science skills required for 21st-century work.

When was the last time you met a 12-year-old who told you he or she wanted to grow up to be an engineer? When Bill Gates goes to China, students hang from the rafters and scalp tickets to hear him speak. In China, Bill Gates is Britney Spears. In America, Britney Spears is Britney Spears. We need a Bill Cosby-like president to tell all parents the truth: throw out your kid’s idiotic video game, shut off the TV and get Johnny and Suzy to work, because there is a storm coming their way.

The third group of boomers our next president will have to deal with is from the Arab world. The Arab region has had the highest rate of population growth in the world in the last half century. It has among the highest unemployment rates in the world today. And one-third of the Arab population is under the age of 15 and will soon be entering both a barren job market and its child-bearing years. There are eight Saudis under age 15 for every one between ages 45 and 60.

This is why I believed so strongly in trying to partner with the people of Iraq to establish some sort of decent government there that might serve as a beachhead for more progressive governance in the Arab world. I have not given up hope for this, but it may turn out that we made too many mistakes and that Iraqis are too divided for such a project to succeed. If so, the next president is going to need plan B – some combination of oil conservation that reduces our exposure to this region, a new military strategy and a renewed focus on promoting better government there through diplomatic and economic means. The Arab world is not even close to educating its baby boomers with the skills needed to succeed in the 21st century. Left untended, this trend is a prescription for humiliation and suicide terrorism.

I realize that elections are no time to expect honesty from politicians. But we’re in this hole because the political season used to stop on Election Day. Now it’s a permanent campaign. That is simply not a luxury our next president will have. The boomers are coming – from three directions – and we will not be able to deal with them without a president with a real penchant for gaffes of honesty.

Published: October 17, 2004

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