Frank Luntz: Writing the Propaganda Playbook

Frank Luntz is the preeminent conservative Republican consultant in Washington, CEO of his own public relations company and a public pollster. Recently, I had the chance to read a Luntz memo titled, "A New American Lexicon", that he sent to GOP legislators and organizers in Washington. The contents are a tribute to cynicism and deception; a propaganda manual for corporate legislation. When John Dewey remarked that "government is the shadow big business casts on society," this is what he had in mind. Luntz mostly works in the shadows.

Luntz's memo is an instructional how to manual for misleading the American public on the effects and underlying principles of corporate legislation; a propaganda playbook. The strategy relies on a misinformed and unquestioning public that will largely accept an agenda that runs against their interests. Luntz's recommendations pivot on misleading turns of phrase and exploiting emotional responses. The public is not able to counter the deciet of others directly, but we can do something about how we respond to it. This is an effort to unmask the deception.

Luntz outlines lexicons, tactics and strategies for GOP politicians to use in order to sell special interest legislation to the American people. The tactics seperate into four general categories, which I will discuss;
i. Appeals to jingoism
ii. Personalize issues, stay away from facts and adopt misleading slogans
iii. Taxation rather than spending.
iv. Use fear to pass legislation

Following a discussion on tactics and strategy we will move on to some of the main issues Luntz highlights and how he puts these tactics to use. Look for this in the coming months and years;
i. The economy
ii. Energy exploration
iii. Tort reform
iv. Social Security personalization.

Jingoism

Luntz sells legislature with chauvinistic slogans. In a subsection titled "The Power of Symbols," he makes the following observations and recommendations;

"When you speak of the 2005 legislative agenda, do not be afraid to wax poetic about... American icons of freedom and opportunity."

He counts among those symbols the American flag -

"The flag is in many ways an American Rorschach test - the inkblot upon which Americans project their ideals"

The Statue of Liberty - "symbolizes both freedom and opportunity"

The American Bald Eagle -"speaks to American independence, ... exceptionalism and power."

The reason politicians need to wrap their policies in the flag, Statue of Liberty, or in the talons of the American Bald Eagle because "the American people cannot always be expected to directly grasp the connection between your policies and your principles" (pg 8) - perhaps because there is not one.

Elsewhere, Luntz uses symbols and rhetoric to draw support for Social Security reform. He stresses the importance of giving people the impression of the "opportunity to own" their retirement. (page 7) He exploits a mistrust of Washington and repeatedly recommends politicians stress freedom of opportunity when discussing Social Security.

A cursory review of the facts gives lie to his cynicism. Let us leave aside the miscellaneous distortions present in his social security personalization plan - which we will return to shortly - and instead discuss the personalization plan's "opportunity of ownership." The truth of the matter is that most people will own very little of their retirement account. Every penny they put into their fund and up to a 3% annual rate of return would be used to purchase an annuity which belongs to the system and is uninheritable. They will not be allowed access to the plan until retirement. They will not be allowed to use it as collateral for securing loans. In any actionable sense, the system appears the same as before. If the account averages better than a 3% annual rate of return then the extra money is inheritable provided the beneficiary does not live long enough to exhaust it. Ownership is very limited in the real world sense. The illusion is what is important.

Selling globalization requires an appeal to American national pride and competitiveness. (Luntz remarks that Americans are second only to Germans in their competitiveness.) Politicians should equate liberalization with "the spread of democracy." Luntz warns readers,

"while the international argument sounds good and Americans of all stripes do approve this is one of the weakest arguments in your communication arsenal. Americans do like to hear about how economic and political policies here can have a positive impact on people across the globe, but that will accomplish nothing if you are confronted with trade deficit numbers, job losses, or lack of compliance."

He regularly recommends verbal constructs to unpleasant facts under a boxed item "Words that Work";

"By leading, the United States can shape the future. By leading, the United States is guiding the merger [of the] global system." (page 38)

"Words that Work" ensure homogenity in our political discourse, provided politicians remain faithful to Luntz's advice. This is why the non-sequitors coming out of any mush-mouthed, noon to three, Tuesday through Wednesday worker in Washington D.C. tend to sound the same as any of their peers. It's called "party discipline", or in more honest parlance, bullshit.

It is also important to couch any debate with an appeal to "Democracy and Justice." For example, "Social Security reform or outsourcing, tax simplification or energy." The point is that these two ideals are important to everyday Americans. If you can convince them that drilling in ANWR, outsourcing jobs, limiting litigation damages or handing social security over to Wall Street is a matter of "Democracy and Justice" then you have won the battle. (page 9)

Slogans vs. Substance

One important feature of the system is that people cannot be allowed to understand what corporations and their agents on capital hill are doing to them. This requires well thought out slogans and propaganda. Peppered throughout the memo Luntz makes recommendations based on phraseology that polls well with the public. For example, based on polling data, Luntz recommends that people incorporate "opportunity" and "ownership" when describing legislature. "Talk about accountability in the government" because it polls well. Luntz underlines the point rather well,

"that's why the words and language you use are so important if you want to convince an increasingly skeptical American population."

He leaves alone the issue of why people are increasingly skeptical of government policy. "Special Interests" are defined as environmentalists and the labor force, which are "obstacles for the business community." "Hardworking Americans" are the rich elite who own and control the wealth of the nation. Their tax breaks should be protected and extended to help the economy.

The facts often contradict the claims that politicians make to justify their policy. It is necessary to steer the debate around substance and use slogans or jingoism. Luntz gives a list of recommended phrases to use when debating the issues at the end of his memo.

Tax Instead of Subsidy

One apparent goal of the Bush administration is to dismantle the social programs of our country. These programs include publicly subsidized education, transportation, environmental regulations, housing, and social welfare (including Social Security.) These cuts will shift the wealth of society back to its proper place with "working" Americans, as understood in its doctrinal sense. In Bush's first term, he cut taxes - primarily for the wealthy - but continued spending to drive up the deficit. In future fiscal years, the deficit can be used to justify cutting funding for butter programs. Luntz remarks on how easy it is to keep this scheme going,

"Americans still believe the primary cause of the deficit is wasteful Washington spending, not the tax cuts. So tell them: 'Americans aren't taxed too little. Washington spends too much.'" (page 51)

The last budget proposal proved this model correct. There were cuts across every department of government except Homeland Security and the Pentagon. The Pentagon system has always been one method of subsidizing the rich. Huge multinationals like Boeing and Lockheed are transferred public money via billion dollar contracts. (Recently there have been a rash of scandals involving these companies and contracts.)

The way to get people to subsidize the rich is twofold. You get people to agree to enormous subsidies for weapons and technology companies by keeping them scared. You have to convince them that their security is always under grave threat. This is not hard because there are always real threats to exaggerate. This was true through the Cold War and has not changed. Anyone who questions the necessity of such gross spending can be smeared as soft on defense. Democrats have been sufficiently tarred that they are overtly paranoid about appearing soft on defense at this point. In this sense 9/11 has been a coup for the military industrial complex. Massive increases for star wars missile defense systems, which have never worked, and high tech airplanes are justified because of the threat of terrorism. A patent absurdity when one considers their capabilities. The Financial Times reports that Congress would not stand for any of the minor cuts in the President's Pentagon budget. Luntz on how to keep people in a perpetual state of fear,

"Start with 9/11. This is the context that explains and justifies why we have $500 billion dollar deficits... Much of the public anger can be immediately pacified if they are reminded" of 9/11.

Luntz warns the reader,

"your supporters are inherently turned off to the idea of fiscal irresponsibility... The trick then is to contextualize the deficit inside of 9/11 and the war in Iraq." (pg 21)

It's a great racket. You coerce people to cut subsidies for public programs by invoking images of government ineptitude and waste. Then you turn around and compel them to pony up for corporate welfare using 9/11.

A similar tactic is to always attack taxes as a disconnected evil without discussing what tax revenues pay for. You can't tell sell them less education and pot-holed roads, so you ask if they want less taxes. Luntz recognizes that,

"individual programs have friends and constituencies. Bureaucracies and bureaucrats don't. Therefore, focus the general rhetorical attack on the 'Washington bureaucracy.'... The greatest anger is directed at bureaucrats and waste rather than at specific programs." (pg 54)

Another simple - yet effective - tactic. People do not want more lead in their water and bigger class sizes but if you can divorce the connection between revenues and outlays then you can get away with just that.

"The fact is, most Americans appreciate their local government that picks up their trash, cleans their streets, and provides police and transportation services..." to cut these programs "remind voters again and again about Washington spending, Washington waste, Washington taxation, Washington bureaucracy, Washington rules and Washington regulations." (pg 157)

Security

Security is a useful coercive technique to compel the public into putting almost any program up on the butcher's block; Social Security reform, drilling in ANWR, deficits, tort reform, etc. Luntz advises that they "link the war on terror to the economy." (page 21) Any criticism of policy or the results of policy can be diffused by referring to 9-11. Similarly Luntz recommends policy makers to use China as a "stunningly effective foil" when talking about liberalizing labor markets. Since "31% of Americans see China as the country that ignores agreements and breaks rules the most often" it is possible to drum up support for trade agreements which universally hurt American workers as jobs are exported overseas. (pg 42)

Now that we have seen the recommended tactics and how they are employed, we turn to some specific policies Luntz outlines as being of the utmost importance for the GOP to "reform." The platforms of Luntz's agenda will undermine American labor markets, shift a greater percentage of wealth to corporations and elites and undermine the citizens defense against corporate crime. I am specifically interested in his recommendations on the (i) economy, (ii) tort reform, (iii) social security and (iv) energy alternatives, although this does not exhaust the issues he covered.

Energy Exploration

Luntz recommends that politicians use security to frame the debate about drilling in the Alaskan National Wildlife Reserve (ANWR).

"Any discussion of energy must begin with the core principle that when it comes to oil, gas and electricity, America must not depend on any foreign nation. That is the single strongest argument you have... ANWR represents security"

It is interesting that he recommends selling drilling in ANWR to Americans on the principle of making America less beholden to foreign energy suppliers because the current consensus is that the ANWR reserves will do little to reduce American dependency on foreign oil. Eric Alterman comments in The Book On Bush,

ANWR does not offer short-term energy relief... If development started today, oil wouldn't start flowing from the region for at least ten years, and production wouldn't reach full capacity until 2020 or later.

Nonetheless both President Bush and Secretary Abraham have repeatedly attempted to justify the project, offering assurances that ANWR's oil reserves could help pry us from the grip of OPEC. Abraham wrote that the ANWR contained 'the equivalent of ten years of oil from the Persian Gulf.' Bush later claimed the reserve could produce 16 billion barrels of oil. In fact, the US Geological Survey, in its most current and extensive assessment, says, 'Technically recoverable oil within the ANWR 1002 is estimated to be between 4.3 and 11.8 billion barrels, with a mean value of 7.7 billion barrels.' According to the same report, at a market price of $24 per barrel, the 'economically recoverable' value would be only 5.2 billion barrels. Based on Energy Information Administration data, these estimates reveal that drilling in ANWR would supplant OPEC oil not for ten years, as Secretary Abraham claimed, but only eighteen to thirty-six months.

In the grand scheme, all these numbers are but drops in the global gas tank. Richard Fineberg, former oil and gas advisor to the governor of Alaska notes, 'People ignore the basic fact that roughly ninety-seven percent of the world's oil is outside the US, and no amount of drilling will alter this picture significantly.' (pg 21-22)

Luntz recommends exploiting the public's ignorance to push the drilling project through, noting "73% [of Americans] don't even know what state it is in." To help educate the public in geography, Luntz frames the following using slogan and security tactics:

When you talk about foreign dependency, 'the OPEC oil cartel' evokes the most disdain from Americans... ALWAYS stress the importance of national security and link it to our dependence on foreign oil.

Politicians should paint a picture of ANWR as a frozen wasteland with pictures and words, downplay the scope of drilling -

"If ANWR was the New York Times, the area in question is the size of a single letter on the page,"

and mislead voters about the effects of drilling -

"In similar areas where oil exploration has occurred, caribou herds have remained healthy and have actually increased four-fold in number." (pg 141-3)

The last comment about caribou populations is apparently a distortion of a study conducted in another area of Alaska where drilling is permitted. Eric Alterman comments,

While drilling in the ANWR wouldn't be the apocalypse some environmental groups claim, the available evidence indicates that it would have a significant harmful effect on local animal species and on the physical condition of one of America's most magnificent locales. In 2002 a group of Republican lawmakers who support ANWR drilling commissioned a National Research Council panel (composed of experts from oil companies, scientific institutions, native Alaskan groups, and an environmental organization) to study the ecological impact on the nearby North Slope of Alaska, where drilling has been permitted for the past thirty years.

The results were not what the senators had hoped. The panel reported a drop in the reproductive rates of some bird species and the local caribou herd. Their findings also detailed a disturbed habitat, littered with abandoned infrastructure, permanent scars that have eroded "the spiritual and aesthetic values of the barren yet majestic region." Of particular relevance to the ANWR debate, they warned that current warming trends in the Arctic could make future projects even more destructive. (pg21)

But the real battle over ANWR is ideological rather than economical. The goal is to destroy 'special interest' environmentalists who are making America unfriendly to business. The oil industry does not care much about ANWR. The New York Times reports on February 20, 2005,

If Mr. Bush's drilling plan passes in Congress after what is expected to be a fierce fight, it may prove to be a triumph of politics over geology.

Once allied, the administration and the oil industry are now far apart on the issue. The major oil companies are largely uninterested in drilling in the refuge, skeptical about the potential there. Even the plan's most optimistic backers agree that any oil from the refuge would meet only a tiny fraction of America's needs...

The refuge is a symbol of that larger debate, said Senator Lisa Murkowski, an Alaska Republican who is a major supporter of drilling. Opponents agree. "This is the No. 1 environmental battle of the decade," said Representative Edward J. Markey, Democrat of Massachusetts.
...
A Bush adviser says the major oil companies have a dimmer view of the refuge's prospects than the administration does. "If the government gave them the leases for free they wouldn't take them," said the adviser, who would speak only anonymously because of his position. "No oil company really cares about ANWR," the adviser said, using an acronym for the refuge, pronounced "an-war."

Wayne Kelley, who worked in Alaska as a petroleum engineer for Halliburton, the oil services corporation, and is now managing director of RSK, an oil consulting company, said the refuge's potential could "only be determined by drilling."
"The enthusiasm of government officials about ANWR exceeds that of industry because oil companies are driven by market forces, investing resources in direct proportion to the economic potential, and the evidence so far about ANWR is not promising," Mr. Kelley said.

Tort Reform

Another platform in Luntz's memo is tort reform. One of his first points is "if you don't get the tone and context right, nothing else matters." (pg 114) One example of "proper tone and content" that he invokes several times is the McDonald's coffee lawsuit.

Someone who buys hot coffee at a drive-thru and then spills it on herself is not entitled to a $2-million settlement.. A New Mexico woman buys a cup of coffee at McDonald's, spills it in her lap, sues the fast food giant, and the jury awards her more than $2 million.

The McDonald's case is a particularly good example of getting "tone and context right" because it is so well known. Ralph Nader in Fight The Good Fight gives context to the case that is missing from the typical recitation.

• McDonald's coffee was far hotter than normal coffee, causing a greatly accelerated burn rate;
• McDonald's had received 700 complaints of burns, but stubbornly refused to lower the temperature or place a clearer warning on coffee cups;
• The seventy-nine year old victim, Stella Liebeck, suffered third-degree burns on her thighs, buttocks, and genitals, requiring a week of hospitalization and subsequent skin grafts;
• Shortly after the incident she wrote McDonald's a letter explaining that she had no intention of suing and requesting only that McDonald's cover her medical and recuperation costs and look into its coffee-making process to avoid future injuries;
• McDonald's declined to change its policies and offered Liebeck an insulting $800;
• Only $160,00 out of the $2.9 million verdict went to compensate Liebeck...
• The trial judge reduced the punitive damages by 82 percent to $480,000... to avoid the expense and uncertainty of an appeal, the parties reached a settlement for less still. (pg 42-43)

Obviously "tone and context" are important to convince Americans that tort reform is necessary for protecting American corporations from people like Stella Liebeck.

Luntz exhorts politicians to drill the idea that damage caps are just and fair into Americans heads. Remind them that

"innocent victims deserve their day in court... You must make it clear again and again that the cap is just, fair, and protects those who have been hurt."

One important theme to drive home in the debate are rising medical costs due to frivolous lawsuits. The premise Luntz recommends is that increasingly frivolous medical lawsuits are skyrocketing medical costs. When framing the debate personalize medical care to people.

WORDS THAT WORK
Expectant mothers need to know that the medical and childbirth care they need is nearby...

What if the worst were to happen to you or someone in your family? In those circumstances, we all want the very best medical expertise available. But what if it's not? What if the trauma center has closed? For people in several states across the country, that 'what if' is now a real life reality. State that have passed lawsuit abuse reform don't have this problem, but states that haven't are heading into crisis...

WORDS THAT WORK... AGAINST YOU
When innocent people who are injured seek compensation from those who caused their injuries, it's anything but frivolous. When a preventable careless medical error forces a child into a wheelchair... it's anything but frivolous. (pg 121)

Tort reform will severely limit the amount of redress citizens are allowed from corporate criminals. Keep them scared that the medical industry is collapsing and appeal to "justice and fairness." (pg 121) The goal is to make people scared of declining medical coverage and soaring medical costs. Lawsuits are driving medical costs up and driving doctors out of the profession. Luntz recommends an anecdotal, personal or emotional presentation (like the McDonald's case above) because the facts do not support his premise that the system is broken. On February 22, 2005 the New York Times reports,

Speaking before hundreds of doctors and medical workers in a St. Louis suburb last month, President Bush called attention to a neurosurgeon on stage with him in the small auditorium. The doctor, the president said, was paying $265,000 a year in premiums for insurance against malpractice claims.

Such high prices, "don't start in an examining room or an operating room," the president declared. "They start in a courtroom."

Indeed, at many recent appearances, Mr. Bush has complained about the "skyrocketing" costs of "junk lawsuits" against doctors and hospitals.

But for all the worry over higher medical expenses, legal costs do not seem to be at the root of the recent increase in malpractice insurance premiums. Government and industry data show only a modest rise in malpractice claims over the last decade. And last year, the trend in payments for malpractice claims against doctors and other medical professionals turned sharply downward, falling 8.9 percent, to a nationwide total of $4.6 billion, according to data compiled by the Health and Human Services Department.
...
Lawsuits against doctors are just one of several factors that have driven up the cost of malpractice insurance, specialists say. Lately, the more important factors appear to be the declining investment earnings of insurance companies and the changing nature of competition in the industry.

The recent spike in premiums - which is now showing signs of steadying - says more about the insurance business than it does about the judicial system.

"You get these jolts in insurance prices periodically, and they attract a lot of attention," said Frank A. Sloan, a Duke University economist who has been following medical malpractice trends for nearly 20 years. "They're a result of a confluence of many things."

Data compiled by both the federal government and by insurance organizations show costs for the insurance companies climbing steadily over the last decade at an average annual rate of about 3 percent, after adjusting for inflation. Over most of that period, premiums for doctors rose modestly and sometimes even dropped as the insurance companies battled for market share in a scramble to collect more money to invest in strong bond and stock markets. But when the markets turned sour and the reserves of insurers shriveled, companies began to double and triple the costs for doctors.

The Corporate Economy

Tort reform and ANWR are pieces of the ideological battle which fit under the umbrella of the new economy. Some basic principles are consistent no matter what the issue. All reforms should be corporate friendly and marginalize the general public which are "special interests." "Opportunity and Ownership" are important slogans for discussing the economy. As we touched on above it is important to discuss tax cuts but never what the government spends money on. People like good education, a clean environment and well maintained roads. They don't like taxes. I would like to elaborate on a few other issues Luntz discusses;

1. globalization
   
2. the health of the economy

Luntz advises that the American labor market copies the third world model to fight outsourcing. If voters agree to give more subsidies to corporations in the form of tax breaks then jobs will stay in America. Remember, only the largest companies can afford to move factories south of the border or overseas and only do so to cut production costs. The way to prevent jobs from leaking overseas is to solve the

"ROOT CAUSES of an inhospitable business climate... Outsourcing is nothing more than the impact of taxation, regulation, litigation, innovation, education, and trade policy all rolled into one."

Perhaps as importantly, do not let "special interest" groups in on the secret that outsourcing is a good proposition for Luntz's "working Americans." After all, "Special interest" groups probably like their jobs almost as much as their trash collection and education.

"Never, never, never begin a response to outsourcing by saying it is beneficial to the US economy... The single biggest mistake proponents of a free market system make is to respond to an attack on outsourcing with a defense of free trade. It may be the right policy but it is certainly the WRONG politics." (pg 26)

Luntz goes on to describe how to solve the problem of outsourcing American jobs,

"It's NOT outsourcing, It's the hostile business climate in America." (pg 35)

And he is correct; if American labor was as depressed as Mexican or Chinese labor then companies would have no need to outsource. It is up to us to fix the "hostile business climate" so that American labor is as cheap and exploitable as third world labor. Nonetheless, remind workers that "it's NOT about just jobs.... it's about careers and the American Dream." "Sadly" people are unable to get over "the personal appeal of lost jobs and lower wages" and recognize the improvements free trade agreements like NAFTA have had on the economy. (pg 44)

The solution to the "inhospitable business climate" is to depress wages, cut corporate taxes under the guise of "tax simplification", slash domestic spending and limit lawsuit damages for corporate negligence. The American worker cannot see past the lost jobs and wage stagnation to see how well the economy is doing. And it is doing well for various special interests in the traditional sense as top wages keep skyrocketing and corporate profits keep zooming while jobs and wages fall, continuing a 30 year trend. There is a way to navigate these complicated issues however, if the politician sticks to the following strategies they should be able to handle any difficulties when answering questions on the health of the economy and globalization from the "special interests."

Don't assert that the economy is doing well because

"Americans don't want to be told that the economy is doing better, because most haven't seen any evidence of such. So long as they are out of work, or scraping through multiple jobs to make ends meet, they don't see the economy improving at all." (pg 18)

Avoid statistics because they "cannot be the brunt of your argument." Instead "rely on rhetorical devices and optimism." At points in the discussion such as this, Luntz drops any pretense that he is anything other than a cynical operative.

"Don't assert that the tax cuts caused the economic recovery" because "we have never found a Republican who has effectively made the case for strong economic growth as a result of the tax cuts. It has been tried and tried and tried and it just doesn't sound credible... instead of linking the current economic situation with tax cuts, you would be better off linking tax increases to future economic hardship... take credit for 'reducing the tax burden on hardworking Americans.'" (pg 23)

All of this needs to be pitched with the proper amount of emotion, "pounding fists is as important as well crafted phrases." (pg 48)

Social Security

In the debate on Social Security it is difficult to determine whether Luntz is a cynic or self deceptive. He dredges up several discredited figures. For example he asserts that doing nothing about Social Security will cost "11 trillion dollars." (page 102) That number is considered unreliable as it is computed over an infinite timeline. The more conventional 75 year projection yields the far lower number of $3.7 trillion. It is worth repeating that Bush has acknowledged his privatization plan would cost more than that figure in the first two decades (with future costs to come) and Social Security would STILL have to borrow $3.7 trillion more over 75 years to maintain benefits. Luntz says, "personal accounts will give THEM a sense of ownership, control and freedom." (page 84) In truth American workers would notice no difference. The same money would come from their paycheck every week. They would not be allowed to withdraw money or borrow against their personal account. When they retire all the money they put into the account and up to 3% annual growth is used to purchase an annuity which will go back into the system when they die. A sense of ownership is just that; a sense.

He recommends portraying Washington as mishandling their money; instead they should allow Wall Street to look after it. The problems facing the system have nothing to do with who handles the money. Only 1% of Social Security revenues are used for overhead costs. This is base fear mongering. Let us assume by mishandling Luntz refers to the trust fund. Critics are fond of saying that the government has borrowed from the trust fund and it is now a pile of worthless IOUs. This is crass and dishonest. Government deficit spending has nothing whatever to do with Social Security solvency. The pile of IOUs are government bonds which people around the world own. If the government does not pay those back, then we face severe economic problems as the government would declare bankruptcy for this to happen. Moreover, where the government borrows money from is also irrelevant. Had the government borrowed from other sources instead of the trust fund, it would have borrowed an equivalent amount. Deficit spending and the means to erase the deficit are separate from the Social Security debate. They should not be conflated. All plans including the Presidents assume the IOUs will be redeemed. If we ended Social Security altogether today we would still have to pay those IOUs back.

Luntz mentions the other irrelevant scare tactic ever present in the debate. "It is a fact that in the 1950s Social Security had about 16 workers paid in for every person drawing out. Today, the ratio is just 3 to 1, and when our kids retire, it will be down to two workers for each beneficiary." (page 90) Workers in 1950 paid less into the system. We pay 6.2% now which is more than they did, but still not an astronomical amount. Furthermore workers wages on average rise faster than inflation. However, a retirees benefits are based on the wages they made while working. The average wage has outpaced inflation so the benefits revenues ratio shrinks. The average worker today makes more than the average worker of yesterday who is drawing benefits. (Technically working class wages have stagnated for the last 30 years, however upper class wages have drastically increased so the average wage revenue has in fact increased.) The point is that we have a system of 3 to 1 today that takes in more than it pays out. The 16 to 1 ratio of the 1950s is irrelevant.

Yet another figure Luntz trots out is that the "return on your Social Security dollars is a paltry two percent (actually 1.6%)." The reason is that the system is a pay as you go system which a small surplus which is put into Treasury bonds. The money that makes it into the Trust fund earns a 3% rate of return. But since most of the money is used to pay current benefits the percentage decreases. Nothing changes with a private account; as noted the money set aside in a personal account and up to a 3% annual growth rate belong to the system still. The other money is used to pay current beneficiaries.

Luntz elaborates on these and many other fallacious points throughout the memo. Social Security has received a lot of scrutiny here as well as elsewhere on the web (most notably at www.talkingpointsmemo.com) and I will not spend more time on it. This memo is a propaganda playbook for corporate legislators. There is nothing inherently wrong with being friendly to business, it is necessary for a strong economy. But it is wrong to hand special interest groups favors at the expense of the American people, to convince them that the way to solve the outsourcing of American jobs is to destroy American labor by embracing unfriendly trade agreements and corporate subsidies, to dismantle Social Security for irrelevant and incongruous facts, and to subsitute slogans for substance when framing all political issues.

[UPDATE: I found another blog via google that addresses the Luntz memo here.]