Nanny-state economists

Social Security is a Ponzi scheme backed by the federal government's power to tax. Most people (with notable exceptions on the hysterical left) have grasped this as well as the notion that even the power to tax has limits.

Reform may (or may not) include some small and restricted scope for individuals to manage private accounts. It is interesting how much hand-wringing this sets off in some quarters. The mere suggestion of a moderate retreat from paternalism is causing major heartburn for many people.

This morning's LA Times (front page) features, "Experts Are at a Loss on Investing ... Nobel winners and other top academics fumble the sorts of decisions Bush's Social Security overhaul would ask average Americans to make ..." The longish article goes on to quote Harry Markowitz, Robert Shiller, Joseph Stiglitz, Clive Granger, William Sharpe and others to the effect that (get this) because they have trouble managing their own portfolios, how can the average Joe possibly do it?

This is all jaw-dropping. Very few academic economists have accumulated wealth and a tiny subset of these may have done it by applying what they write about. And no one should be surprised. Proving theorems does not qualify as market savvy.

Faith in the nanny-state trumps any interest in the intergity of the individual. Which theorems support that faith?