The Turning of the Tide

By Craig Murray

May 22, 2024
Source: craigmurray.org.uk

In the normal run of things, if a very senior judge instructs you to give an assurance to their Court, it would probably not be wise to avoid giving the assurance, to devote a huge amount of text to trying to obscure the fact you have not given the assurance, and then to lecture the judge on why they were wrong to ask for the assurance in the first place.

Most lawyers would probably advise against that course of conduct. But this did not deter the fearless James Lewis KC, back to lead for the United States prosecution against Julian Assange, eyes twinkling and his neat nautical facial hair having grown rather wilder, as though he had decided to assume a piratical air to match his reckless conduct of the case.

This day of the Assange hearing felt rather different from all the other days these past 14 years. For one thing, when I arrived early in the morning, I was neither freezing nor drenched. Instead the sun was out and the sky untroubled by any thought of rain.

The many supporters gathered outside the Court appeared more colourful and cheerful than of late, and I was happily struck by the very large amount of Free Assange graffiti I passed on my mile long walk to the court, sprayed all over central London.

I was very confident we would win and this would be a good day, so confident in fact that I mounted the podium and broadcast it to a slightly startled Strand.

You will recall that in the last High Court judgment, the court had requested assurances from the US government against the use of the death penalty, and that Julian would not be barred by his nationality from claiming the freedom of speech protections of the First Amendment in a New York court.

The Americans had provided what seemed to me – and more importantly to Julian’s legal team – sufficient assurance against the death penalty.

On the right to plead the First Amendment, plainly no sufficient assurance had been given. The US government had simply assured that Julian’s defence in the US would be entitled to seek to make a First Amendment defence.

It is important to understand that the High Court has not asked for an assurance that the First Amendment argument would ultimately prevail against other factors, e.g. so-called national security. They had merely asked that the line of defence not be barred on nationality alone. The US assurances had sought to avoid the question completely by ignoring it and seeking to conflate the other arguments that might prevail against the First Amendment.

This was so blatant, I did not see how the court could rule that the US assurances were sufficient, and still retain any intellectual self-respect. My observation of judges Johnson and Sharp at the last hearing was that they very much possessed intellectual self-respect. So my optimism of winning the right to a new appeal was very high.

To match the bright new morning, the case had been moved to a new, much bigger and brighter courtroom. The audiovisual system for the press in nearby rooms broadly worked. Efficient new crowd management systems were in place. I was even given a laminated card entitling me to my place in the main courtroom, as opposed to an ad hoc scrap of paper. I had been spared from standing in the queue by Jamie, Jim and the wonderful volunteers.

What is more, Edward Fitzgerald was sporting a different horsehair wig, possibly a century or so younger than the previous model. For those who poo-poo the effectiveness of this blog, I can report that he told me that my comments on his wig in my last report caused him to dig out his spare. This blog gets results!

Once we had all settled in to this resplendent fake-medieval courtroom, with its extraordinary lantern roof architecture flooding light in from above, Fitzgerald rose and launched into the case with a notable lack of preliminaries. He appeared a bit puzzled at what he was meant to be arguing against. It was like punching fog.

Fitzgerald accepted that the assurance on the death penalty was sufficient. But the assurance that Assange could rely on the First Amendment was inadequate. It merely said he could “seek to” rely on it.

Furthermore the “assurance” did not even commit the prosecutor not to argue that Assange should be denied First Amendment protection on the grounds of nationality. The original statement before the court from US Prosecutor Kromberg that the prosecution may do that, still stood.

Even if the prosecution were to commit – which they had not – that they would not argue the point, there could be no guarantee that the US court itself would not debar Assange from First Amendment protection on account of his foreign citizenship, following a number of precedent cases including at the Supreme Court.

The High Court had made plain that this was a real concern of discrimination by nationality contrary to the Extradition Act, and its concern had not been addressed by the United States. “There is a real risk of discrimination and that risk survives the equivocal and downright inadequate assurance”.

Mark Summers KC then stood to complete the defence argument.

This transformational day had its greatest effect on Summers. Gone was the anger at events, the simmering impatience at the failure of the judges to grasp the arguments. Instead, he was so softly and sweetly spoken nobody could hear him. As he rose, the sun inched across the sky just enough that a clear shaft of sunlight pierced the lantern window and illuminated Summers. It seemed an effect too bold for Hollywood, possibly something out of Monty Python and the Holy Grail. I am pretty sure I heard angels singing.

Summers said he had the difficult task of countering the US arguments before they had made them, and asked the court for permission to speak again later, which Judge Dame Victoria Sharp – who had obviously also heard the angels singing – agreed immediately.

Summers enumerated the US arguments from their written submission. He went through these as:

1) Assange will be on US soil during trial and thus the First Amendment will apply.
But this Summers said was inconsistent with Kromberg’s sworn statement and with previous case law.

2) Assange might be found to have been on US soil when offences were committed and so the First Amendment would apply.
Except, said Summers, Assange clearly was not on US soil at the time.

3) Nationality is a narrower concept than citizenship so no relevant discrimination is taking place.
Summers said this was plainly wrong as shown by many examples including the Refugee Convention.

4) Nationality was only one of the factors which might lead to the first amendment not being applicable.
Summers pointed out that if nationality was a factor, that was discrimination. The existence of other factors was irrelevant.

5) The United States was saying that the 14th Amendment – which grants citizenship to all persons born in the United States – was somehow relevant.
Summers looked perplexed and dismissed this argument with a wave of his hand.

It was now time for James Lewis KC to re-enter the fray on behalf of the United States. His number 2, Clare Dobbin, who had replaced him so inadequately in the last hearing, was nowhere to be seen. I fear she may not just have been relegated back to the substitutes’ bench, she may have been transfer-listed.

Lewis said that the burden was on the Appellant (Julian) to prove there was a serious possibility of, or reasonable grounds to fear, prejudice on the basis of his Australian nationality.

Section 81b of the Extradition Act provides that the court could bar extradition where


if extradited he might be prejudiced at his trial or punished, detained or restricted in his personal liberty by reason of his race, religion, nationality, gender, sexual orientation or political opinions.

It is an anti-discrimination clause, which means you need to show unfair treatment against that of the comparator, in this case a US citizen.

Lewis than appeared to take a real swing at the absent Dobbin. He stated that he wished to draw attention to a Court of Appeal judgment which “for some reason” had not been highlighted at the previous hearing.

In a Court of Appeal case, the Foreign Secretary had won against a claim that it was unfair discrimination on his part to treat UK citizens differently from non-citizen UK residents, when making representations on their behalf over incarceration in Guantanamo Bay. This case showed it was legitimate to treat citizens and non-citizens differently.

The ruling states “a person who is not a British citizen is not entitled to protection”. British citizenship was simply a fact of law, and nothing to do with the person’s characteristics. “That is the correct prism through which to look at this case”.

You will perhaps permit me to point out that I predicted, before the US assurances were given, precisely and correctly what the US arguments would be, including this one: that it is legitimate to treat citizens differently from other nationals in terms of consular protection (which entirely routine legal concept is the only thing the Guantanamo Bay case quoted by Lewis effectively says).



Lewis continued that Assange would not face discrimination because of his Australian nationality; he would rather be treated differently as a non-US citizen. At issue was the “simple legal fact” of his non-US citizenship.

Lewis said the claim of discrimination only works here on fair trial issues and the assurance addresses fair trial issues. Assange is guaranteed a fair trial.

While the court has suggested that the First Amendment should apply because it provides Assange the kind of Article X ECHR protection to which Assange would be entitled, it must be noted that Article X only covers “reasonable and responsible” journalism. This is not what Assange did.

One factor that may define “reasonable and responsible” might be where the journalism took place. Assange had chosen to publish outside the relevant jurisdiction of the source of the material. That was not responsible. There were many other factors, not just nationality, which would decide whether the First Amendment applies. That includes national security of the United States. Assange was guaranteed a fair trial on all these points:

“He will be able to rely on the First Amendment but that does not mean he will succeed. As a plain matter of law, Assange is a foreigner in a foreign country carrying out acts that affect US national security”.

There were also 18 charges, covering different categories of offence. Some of the charges, such as hacking and conspiracy to steal documents, could never get First Amendment protection. That had been clearly shown in the Chelsea Manning judgment. Assange’s conduct was not protected by the First Amendment.

Mark Summers was then given his promised right to reply for the defence. He said that the notion that there was legitimate discrimination based on the characteristic of nationality was not applicable here. This was about a trial process.

None of the cases quoted by the prosecution relates to the trial process. Section 81b forbids discrimination by nationality in the trial process. That in other situations citizenship had legal effect was not relevant.

As regards the distinction being made between nationality and citizenship, it was worth noting that prosecutor Kromberg states that Assange may be excluded from First Amendment protection on the basis of nationality, and not of citizenship.

The argument that nationality is only one factor which might exclude the First Amendment fails. Lewis had stated that Assange may be excluded from the First Amendment because he is “a foreigner carrying out acts on foreign soil”. That is discrimination by nationality. If he were a US national he would not be excluded. The other factors become irrelevant.

The ability to rely on and argue from the First Amendment is not the same thing as to say this argument must ultimately succeed.

The finding against Chelsea Manning was not relevant. Manning was in a different position. He was a government employee, a whistleblower and not a journalist. The position in relation to the First Amendment was entirely different.

The argument that the First Amendment would automatically apply if Assange were on US soil is simply wrong. Several precedent cases showed this.

Summers then handed over to Edward Fitzgerald again. At this point. James Lewis rose to object. He said he had not objected to Mark Summers replying, although this was not the originally agreed procedure. But to have two people replying seemed excessive.

Judge Sharp responded with great seriousness. “Given what is at stake here”, she said, she would hear anything anybody wanted to say. If he wished, Lewis could respond again after Fitzgerald.

That “given what is at stake here” was very striking. It was the first real acknowledgement of the major issues at stake in this case, and perhaps also of the devastating consequences for Julian personally, from the judiciary in over a decade of proceedings. It did feel like something had changed.

Edward Fitzgerald then got going. The most important point, he said, was the deafening silence from Kromberg. He could have given the assurance that the prosecution would not seek to argue that Julian should be debarred from First Amendment protection by his nationality. But he had not done so.

It was perfectly normal practice for diplomatic assurances to include commitments for the prosecution to pursue or not pursue a certain course of action. In this very case they had assured the prosecution would not seek to pursue charges which might bring the death penalty. Yet Kromberg had not given any assurance he would not pursue the barring of the First Amendment, which he had on the contrary given an affidavit saying he might indeed pursue.

The assurance given was no assurance at all. Lewis had said that Assange would be able to rely on the First Amendment; but that was not what the “assurance” said. It said rather that he could seek to rely on the First Amendment, which was not the same thing at all.

Extradition could not be granted because there were too many issues of prosecutorial behaviour unresolved as well as issues of law.

The arguments were now at a close after just ninety minutes. Judge Sharp rose and said she and Judge Johnson would return in ten minutes to explain what would happen next.

In the end it took twenty minutes. When she returned, Judge Sharp had on her most solemn face. She started off by saying that everybody should listen to their decision in silence, and if anybody thought they could not do that, they should leave the court now.

I have to confess, I worried. If they now ruled against Julian, extradition could be immediate. He could literally be whisked straight to a military airfield. Was Judge Sharp expecting protest?

Very quickly the fears were allayed. Sharp stated simply that the right to appeal had been granted on grounds 4 and 5 of the applications – i.e. Freedom of Speech and Discrimination by Nationality. She also stated explicitly that the right to appeal applied to every count of the indictment, thus rejecting Lewis’s argument that some of the charges could not attract a freedom of speech defence.

The parties were given until 24 May to submit a joint memorandum on procedure and timetabling for the appeal hearing.

It is very important to understand that all of the other issues have fallen away and cannot be reintroduced. We are now down to the one narrow point on freedom of speech and discrimination by nationality. But I do not see how the United States escapes from this corner.

At the substantive appeal hearing, the issue, the arguments and the case law will all be exactly the same as at this preliminary hearing. The only difference will be the burden of proof. Here the defence only had to show there was an arguable case of discrimination. At the substantive hearing they will have to prove it is a winning argument.

But given the performances here and the fact the judges took only several minutes – when everyone was expecting at least several days – to reject the US prosecution arguments, I do not see how the USA can now win this.

We do not know when the substantive hearing will be. My bet would be October, though the legal team thought July possible. Of course Julian remains in a terrible maximum security prison. But freedom comes closer.

A cynic may see all this as a further kick into the long grass and spinning out of the process until beyond the US Presidential election, as Biden would be very ill-advised to bring Julian in chains to Washington for the campaign. But my feel for it was not that. I do believe this was a genuine win, and we are on the way to victory and freedom before Christmas.

It is unlikely, though not impossible, that the judges who granted the appeal will hear the appeal, so I fear that is the last we shall see of Dame Victoria Sharp. The frankly hideous Tory Lord Chief Justice Burnett has retired, so I expect the appeal will be heard by Lady Chief Justice Sue Carr, who has no previous involvement with the case.

It is a notable fact that so far female judges have shown themselves much less biddable by security service interests than male judges in this long saga. It appears that the judiciary have again found a way towards barring the extradition that does not involve any judgment on the public interest of revealing war crimes or any discussion of the issues in material revealed by Wikileaks most embarrassing to the United States.

If the United States loses this case, as at present they stand to do, then Biden is in a lose-lose situation. He will get no credit for promoting freedom of speech and media freedom by dropping the case. On the other side, the hawks will characterise him as a loser who could not win an important national security case, even in his closest ally. The political logic for Biden in taking the off ramp appears compelling. But can Biden’s interests prevail over the will of the CIA?

Grizzly Hunting is Trophy Hunting

BY MIKE BADER

MAY 23, 2024

Facebook

TwitterRedditEmail

Grizzly bear north of Obsidian Cliff, Yellowstone. Photo: Jim Peaco, National Park Service. 

A final decision on the petitions to remove the grizzly bear from the list of threatened species and the protections of the Endangered Species Act (delisting) may come in June or early July. Currently, authority over grizzly bear management is vested in the U.S. Fish & Wildlife Service. If the petitions are approved, management will be turned over to the states.

Both Montana and Wyoming would have trophy hunts for grizzly bears. Wyoming would begin immediately and Montana in five years. But what would stop the politicians once they’ve achieved control over the bears?

Keep in mind that all grizzly bear hunting is trophy hunting. There is no subsistence hunting for bears in the lower 48. People do not eat bear meat and Montana hunting regulations do not require black bear hunters to eat the meat. To the contrary, hunters of elk, deer and other species can be fined if they waste the meat. Grizzly bear hunting is for the trophy and the thrill of shooting a grizzly bear.

Montana might use private citizens to remove bears with a history of management or habituation. This is not hunting. Since most bears with a management history are radio-collared, hunters might be directed to the bear’s location. This is not ethical or fair chase nor would it be allowed for any other animal.

The states also intend to arbitrarily limit where grizzly bears may be, even where they are in excellent habitat on public lands such as the Missouri Breaks with over one million acres of public lands and Wilderness. Hunting tags may be issued in specific areas to limit grizzly bear distribution to Wilderness and National Parks, which are not large enough to support viable populations. It’s the antithesis of wildlife habitat connectivity.

Montana Fish, Wildlife & Parks (FWPs) earned a reputation as being the leading state wildlife management agency in the U.S. and has been highly trusted by the public. Unfortunately, political interference is tarnishing this reputation. The Montana Fish & Wildlife Commission used to have professional biologists as members including Chairs Dr. Gary Wolf and Dr. Bob Ream. No more. There is not a single biologist on the Commission, whose members are all appointed by the Governor.

Moreover, the legislature enacted many laws governing wildlife management that retired FWPs biologists and others have warned are extreme, unsporting and threaten stable populations of wildlife. This pervasive influence led FWPs to produce a statewide management plan for grizzly bears that reads like a trophy hunting plan. Many justifications are offered for trophy hunting grizzly bears, but few if any for not doing it.

The political override of state biologists is affecting Montana’s wildlife heritage from elk on down the line. In Wyoming the Cody Roberts wolf torture episode, which Wyoming Fish & Game sat on for five weeks, further erodes confidence in state management of carnivores and predators. Trust must be re-earned and that takes time.

If you oppose the trophy hunting of grizzly bears then you must also oppose removing the grizzly bear from the protections of the Endangered Species Act because that would immediately enable unsustainable trophy hunting. Relisting a species is almost unheard of and takes much time that the grizzly bear does not have.

There is no ordinary hunting of grizzly bears. It is trophy hunting plain and simple. Please consider contacting the U.S. Fish & Wildlife Service and tell them no delisting and no trophy hunting of grizzly bears.  In the Search box, enter FWS-R6-ES-2022-0150, which is the docket number for this action.

Mike Bader is an independent consultant in Missoula, Montana with nearly 40 years of experience in land management and species protection. In his early career he was a seasonal ranger in Yellowstone involved in grizzly bear management and research. He has published several papers on grizzly bears and is the co-author of a recent paper on grizzly bear denning and demographic connectivity that has been accepted for publication in a scientific journal.

How Trump’s Corporate Tax Cuts Sparked Inflation

BY LINDSAY OWENS

 MAY 23, 2024
Facebook

TwitterRedditEmail

Next year, when key provisions of President Trump’s 2017 tax breaks to the wealthy and corporations expire, we have an opportunity to get our money back.

I’m not just talking about all the foregone tax revenue we’ve lost because the rich have paid so little since 2017 — though we should get that back, too. I’m talking about the money families have lost to corporate price gouging.

Let me explain.

In 2017, Republicans slashed the corporate tax rate from 35 percent to 21 percent, giving massive corporations their biggest tax windfall since Ronald Reagan was president. A few years later, as Americans emerged from a global pandemic, these same corporations drove up prices for families.

While inflation hamstrung workers and families, it didn’t make a dent in corporate profits. In fact, as many CEOs boasted themselves, it’s been a boon. Companies simply passed rising costs along to consumers — and then some, bringing in record profits as a result.

All told, corporate profit margins skyrocketed to 70 year-highs. And by the end of 2023, when Americans were beyond fed up, after-tax corporate profits hit an all-time record high of $2.8 trillion. My organization, Groundwork Collaborative, recently found that corporate profits drove over 50 percent of inflation in the second and third quarters of last year.

But why would a change in the corporate tax rate unleash the kind of rampant corporate profiteering we saw in the aftermath of the pandemic? Simple: It’s a lot more fun to gouge customers when you get to keep more of what you pull in.

Look at Procter & Gamble, which has raised the price of everything from toothpaste to diapers. Last year, the company pulled inmore than $39 billion in profit.

If they had to pay the 35 percent statutory tax rate, they would have sent nearly $14 billion to Uncle Sam. Instead, they paid a 21 percent rate and, using loopholes, got to keep an extra $10 billion — which helped with their combined $16.4 billion worth of dividends and stock buybacks for shareholders.

Corporations did well from Trump’s corporate tax cuts, with executives getting big raises and shareholders receiving big buybacks. But the real bonus came when inflation hit. Corporations used the cover of supply chain issues and broader inflation to hike prices more than their higher input costs justified — and they didn’t have to worry about their tax bill.

Our tax code is exacerbating some of the worst corporate excesses, effectively “subsidizing corporate price gouging,” as Sen. Elizabeth Warren (D-MA) described it recently. But it’s not only that low tax rates incentivize companies to overcharge. Rock-bottom tax rates also make collusion more profitable, as we saw with Pioneer Oil.

Recently, the Federal Trade Commission barred former Pioneer Oil CEO Scott Sheffield from joining the board of ExxonMobil following their merger, because Sheffield allegedly colluded with OPEC to raise oil prices. As families struggled with higher energy costs, the oil and gas industry banded together to keep prices high, which according to one analyst accounted for 27 percent of inflation in 2021.

When the reward is higher with lower corporate taxes, executives like Sheffield are more willing to take the risk. Higher corporate taxes are both crucial for accountability and for ensuring that there’s far less incentive for executives to squeeze as much as they can from their customers.

Wall Street tycoons and CEOs didn’t take the heat of inflation — they fanned its flames and families got burned. It’s no wonder people overwhelmingly favor a tax code that’s no longer rigged for corporations, especially as they struggle with high prices.

Congress raising the corporate tax rate in 2025 is an opportunity to recoup some of the truly obscene profits corporate America raked in during this period of economic upheaval for American families. It’s time Americans got their money back.

Lindsay Owens, PhD, is the Executive Director of Groundwork Collaborative.

U$ Social Security: Productivity Growth and the Scary Stories About Rising Retiree to Worker

BY DEAN BAKER

MAY 22, 2024

In the wake of the release of the 2024 Social Security Trustees Report, we have seen a wave of columns and news articles telling us that we won’t have enough workers to support a growing population of retirees. The story is that all of us baby boomer types are now retiring and the later generations are not having enough kids, so we will see a fall in the ratio of workers to retirees.

While the major media outlets love to push this line as a horror story, fans of arithmetic know it’s just ungodly silly. I’m tempted to turn this one over to ChatGPT, but I will write it myself again, this time.

The first point is that a falling ratio of workers to retirees is not exactly a new story. If we go to our friendly Social Security Trustees Report, we see that the ratio of workers to beneficiaries was 3.4 back in 2000 when all the baby boomers were still in the workforce. It is now down to 2.7. The ratio is projected to fall further to 2.2 by 2050.

I doubt that most people feel they have been terribly burdened by the falling ratio of workers to retirees in the last quarter century. But the media somehow seem to think it will be a disaster in the next quarter century.

Of course, the full picture would take the total dependency ratio, both the young and old, relative to the working-age population. That also is projected to rise somewhat, from 0.734 this year to 0.823 in 2050.

But this increase is also not a new story. We were at 0.669 in 2005. And we are never projected to come anywhere close to the 0.946 peak hit in 1965, when the baby boomers were all children.

Productivity Growth Allows for Rising Living Standards

But the bigger picture on demographics is the less important part of the story. The reality left out of these scare stories is that we are seeing rising productivity through time, which makes it possible for workers to support a larger population of retirees. The arithmetic on this is straightforward.

Suppose we want retirees to be able to get benefits equal to 70 percent of the average wage. Note this does not imply a sharp reduction in living standards of retirees relative to when they were working. A substantial share of the working-age population is supporting children. They also incur work-related expenses, like commuting, that retirees would not face.

With the current ratio of workers to retirees we would need a tax of roughly 20 percent on the wages of the working population to support this level of benefits. (This would actually only get us 67.5 percent of the average worker’s after-tax pay, but that’s close enough for this exercise.) It is also worth mentioning that the transfer of income from workers to retirees doesn’t have to be done through a tax on wages.

It is the same story if retirees get their income from the ownership of assets, like shares of stock or housing. The point is that people who are not working need to be supported by people who are. From an economic standpoint, it doesn’t matter if retirees get their income from Social Security paid by the government, dividends on shares of stock, or rent paid by tenants on the housing they own.

Suppose we left the taxing structure in place, so we are still pulling away 20 percent of workers’ wages to support the retired population in 2050. With the ratio of workers to retirees down to 2.2 at that point, each retiree will only be getting 55 percent of an average worker’s after-tax pay.

That may sound like retirees would be really screwed, until we factor in productivity growth. The Social Security trustees project that productivity growth will average just over 1.6 percent annually over the next quarter century. If this is fully passed on in higher real wages (long story here), that means wages will be more than 51 percent higher in 2050 than they are today. In this case, 55 percent of an average worker’s after-tax pay would be 23 percent more than today’s retirees are getting. Should we be crying for them?

The world is more complicated. Most people expect their living standards in retirement to be close to their living standards during their working lifetime. Suppose that we decide that we have to tax workers at a 25 percent rate in 2050 to bring the living standards of retirees closer to that of the working population. (This would get us to 73 percent of the average after-tax wage for retirees.)

We know the politics on this could be a problem, but if we’re supposed to be concerned about overburdening our young to pay for retirees, consider that a worker in 2050 paying a 25 percent tax on their pay would have a 42 percent higher after-tax wage than a worker today paying a 20 percent tax rate. It’s still hard to see the horror story.


Source: Social Security Trustees Report and author’s calculations.

Speeding Up Productivity Growth

Productivity growth is hugely important for living standards, but the reality is that we are very bad at figuring out ways to speed it up. In fact, we find it very hard to even know what the trend is.

The post-World War II productivity boom ended abruptly in 1973. No one saw it coming and the slowdown was not even fully recognized until years after the fact. Even now there is no consensus on its causes.

The 1995 productivity speedup caught most economists by surprise, although there is at least a general agreement that information technology was most of the story. When productivity growth slowed again in 2005, it caught most economists by surprise and again there is no agreed upon explanation for the slowing.

This means that we can’t just snap our fingers and order an acceleration of productivity growth. But we do know that trends do shift, and it is at least possible that growth could speed up (it also could slow).

We have seen very rapid productivity growth over the last year, with an increase of 2.9 percent. It is at least plausible that artificial intelligence and other new technologies could sustain a faster rate of productivity growth going forward.

Suppose that we see the growth rate increase by 0.5 percentage points above the 1.6 percent rate projected by the Trustees to 2.1 percent. This is still well below the rates of close to 3.0 percent that we saw in the post-war boom and the 1995-2005 speed up.

In that case, the average wage will be 72 percent higher in 2050 than it is today. And, if we leave the tax rate at 20 percent, the average retiree will have a benefit that is more than 40 percent higher than retirees get today, even assuming no increase in taxes. Where’s the horror story?


Source: Social Security Trustees Report and author’s calculations.

To be clear, there is no way we can guarantee this sort of sustained increase in productivity growth. Dealing with the effects of global warming will be a big factor in lowering growth, but it is at least a possible scenario. In any case, it is far more likely than getting a massive change in the willingness of people to have children over the next decade.

There is another dimension to this picture that is often overlooked. When we think of productivity growth our thoughts tend to focus narrowly on economic output, which is appropriate since it is a measure of output. However, the same sorts of technology that might let us produce more output in an hour of work, may also allow us to live healthier lives.

Our current image of a typical person in their 80s may be someone who is frail, and likely to need assistance in many activities of daily life. However, if we have improvements in nutrition and other aspects of health care, people in their 80s in the 2050s may be in far better health than is the case today. That would mean both they are likely to enjoy better lives and require less medical care.

Again, there are no guarantees here. There are many forces pushing the other way. Bad nutrition and drug and alcohol abuse, coupled with an incredibly wasteful healthcare system, could mean that we will see few gains in health status. But it is not absurd to think that gains are possible. In any case, that is not an issue that is in principle beyond our control.

In short, demographics will be a factor in determining standards of living in the decades ahead, but a relatively minor one. Furthermore, it is not one that we can really do very much about. The endless harping on demographics in the media is a distraction from policy changes that actually could improve people’s lives.

This first appeared on Dean Baker’s Beat the Press blog.


Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC.