Perhaps the most telling example of Ed Crane’s cheerful contrarianism comes when you ask him what achievement of Cato’s makes him proudest. After listing several other notable accomplishments, the one he settles on is an idea that got shot down in flames.
It’s the idea, first pushed in a 1980 Cato Institute book on the subject by Peter Ferrara, that Social Security should include private investment options and ownership rights. In 2005, as Crane notes, President Bush “picked it up, to his credit. But Karl Rove tried to scare people into supporting it, by talking about unfunded liabilities and all of those green eyeshade issues. If you instead talk about ownership and inheritability, you win.”
The idea got so little traction in Congress that it never even came close to a vote, not even in committee.
So why is Crane so proud of it?
To answer, Crane tells a little-known story.
In 1998, largely through Cato’s efforts, President Clinton became interested in the tremendous success Chile had achieved with its privatized national retirement system designed by Jose Pinera, now a Cato scholar. Crane said that through private channels he heard that Clinton actually brought up Pinera’s work over dinner at the White House, and that a Clinton-ordered study on the system had been favorable.
“During the Clinton years, we were going to do it,” Crane said. “Clinton understood that it could actually be a Democratic issue,” Crane said. “He understood it would benefit blue-collar workers, blacks and women. But then Monica [Lewinsky] came along, and Clinton had to reach out to the far left to get support” — and so the president quickly dropped the idea of private accounts.
Still, Crane says even with the recent market implosion the idea isn’t dead, but merely in hibernation.
“I’m proudest of that,” he said. “We got a debate going.”
