The Suite Spot
Grabbing a bite: Eat your peas
The Palm restaurant in Boston's Back Bay serves up steak in no-nonsense fashion. The same could be said for Robert Pozen's answer to fixing the nation's Social Security system. Over lunch recently, the former vice chairman of Fidelity Investments outlined how he would shore it up in two words: peas and carrots. Neither vegetable made it onto Pozen's plate--he started with a bowl of beef and rice soup followed by a peppercorn-encrusted ahi tuna steak, served rare. But they speak to his pragmatic approach, which President Bush called "interesting" at a news conference last week.
Unlike many of his fellow Democrats, Pozen sees a crisis brewing. And while Bush initially focused on the allure of private investment accounts, Pozen's chief message is that Americans have to eat their peas. In other words, repair the system now, before it's too late. "If personal accounts are a way to get there, great," says Pozen, a member of President Bush's 2001 Social Security Commission and now chairman of Boston's MFS Investment Management. "But there's no reason to have personal accounts unless you have fundamental reform." Pozen proposes progressive indexing: basing benefits for low-income workers on wage growth--as it is now--and pegging high income earners' payouts to slower-growing inflation. Middle-class benefits would be indexed using a combination of both methods. And that's where the carrot comes in. Pozen suggests allowing workers to contribute up to 2 percentage points of their payroll taxes into self-managed accounts, which should help middle- and upper-income workers make up most if not all of the slower growth in benefits.
Critics of private accounts dub them handouts to fund companies. "This is no windfall," says Pozen. Under his plan, the average private account after 10 years would be around $12,000. "I don't see a lot of people in the financial services industry going wild for people with $12,000."
Book Nook: Right on the money
If Daniel Pink is correct about the 21st-century workforce, then all those college majors that cause parents to grimace (art history? philosophy?) will gain newfound acceptance. In A Whole New Mind: Moving From the Information Age to the Conceptual Age, the journalist and onetime speechwriter for former Vice President Al Gore says that major economies will increasingly favor jobs that are more right-brain oriented than left. Rather than the logical, linear thinking of lawyers, programmers, and accountants, it will be the ability to design something beautiful, tell a story, give meaning to, and empathize with others that will be among the sought-after skills. Pink sees signs of a shift, noting that corporate recruiters now visit top art schools, while consumer products giant Unilever employs poets and painters to inspire its staff. What's driving it? The three A's: abundance (people have more nonmaterial desires), Asia (low-cost labor), and automation (computers and robots). Wage slaves, says Pink, should think about adding artistic or spiritual value to their jobs--the book offers tips--or look for a new one with such attributes.
This story appears in the March 28, 2005 print edition of U.S. News & World Report.
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