Marginal Utility

by Tom Bozzo

Also at Dartblog, Joe Malchow endorsed the results of a poll sponsored by "Generations Together," an astroturf project (*) of CoMPASS, a pro-privatization 501(c)(4) funded by the National Association of Manufacturers, the Business Roundtable, the National Restaurant Association, and the Financial Services Forum. I sent him the following note, which he graciously posted to his blog (note: in my experience, Joe has been a model for how to deal with polite but critical feedback in the absence of a comments function):

Obviously, I'm playing on the other team, but nevertheless I'll just offer my two cents that it's *not* a good poll -- which is not too surprising given its 'astroturf' sponsorship. The problems are in the questionnaire design. The questions are limited to positive aspects of the anticipated Bush plan, which in isolation ought to draw a favorable response. More notably, the questions totally ignore the issues that generate opposition in the major polls, particularly anticipated reductions in guaranteed benefit levels, benefit offsets for private account participants, and transition costs.

Here is Joe's response (in red green [aesthetic edit]), and my rebuttal:

I disagree. Remember that the anti-reform polls are sponsored by the Dems and the AARP. Even they ask questions similar to the ones asked in this poll. And though it was commissioned by a pro-reform group (as I disclaimed in the original post) its results are consistent with recent Pew polls.

We agree, at least, that partisan polls should be disclosed as such — and viewed with caution. It should be noted that Ayres, McHenry & Associates is a partisan polling outfit.

As for the Pew poll, I assume Joe is referring to this poll from the Pew Research Center for People & the Press, conducted in February and released March 2.

Joe's interpretation of the Pew poll differs markedly from Pew's. Pew headlines its report "Bush Failing in Social Security Push." While a plurality of respondents favor private accounts per the poll, the graphic accompanying the poll summary (above right) shows a 24-point swing in opinion against private accounts since September. This is consistent with other nonpartisan polls reported in the mass media (ABC News-Washington Post; USA Today/CNN/Gallup) — declining measured support for Social Security privatization is not unique to Democratic Party and AARP-sponsored polls.

That the poll didn't ask negative-questions is an important point that Tom makes.

Agreed, obviously ;-). This is actually a criticism that can be leveled against the Pew questionnaire, too. In 2004, the Pew report notes, the main privatization sentiment question included language noting the diversion of funds from traditional Social Security (“... payroll taxes in private retirement accounts, which might include stocks or mutual funds, rather than having all of it go toward Social Security”). Measured support for privatization fell anyway.

But, as I read his words on that subject, I noticed that they inevitably got technical. "Guaranteed benefit levels, benefit offsets for private account participants, and transition costs" are things that 90% of Americans have no informed opinion on. I think those questions unfairly skew anti-reform. The questions that this Ayres poll asked were clear, concise, and understandable by all.

Of course, I used technical terms because I was writing to a politically active student at an elite college who I assume understands the underlying issues, even if we disagree on them; I wasn't offering questionnaire wording for a public poll. Still, I'm not sure how the anti-reform skew is "unfair" for features of the Bush plan that, properly described, would be understood by respondents to reduce program benefits (other things equal). That would seem to be a rational marginal response.

I also sharply disagree with his characterization of the Ayres questionnaire wording (PDF). Wording that omits material aspects of the Bush plan may be more misleading for otherwise being "clear" and "concise." For instance, one polled "feature" is:

Workers under 55 would have the choice of staying in the current system or putting a portion of their Social Security payments into a personal retirement account.

There is no mention of the offset to guaranteed benefits for private account participants, a widely reported feature of the plan on which the press was briefed by a senior Bush adminsistration official prior to the State of the Union address. (They also use the administration's "personal" account wording, which is understood to poll better than "private" for whatever reason.)

One feature that doesn't poll especially well is:

Workers... could only invest their money in a conservative mix of bond and stock funds.

This would be pregnant with technical meaning to someone with personal finance knowledge. Does this mean respondents really favor doubling down with higher-risk investments, or that the restrictions on investment choice (which would be needed to prevent account expenses from excessively biting into returns, among other things) don't sound like a good deal? You can't say.

Joe is right that many or most Americans are insufficiently knowledgable about the technical details of the Bush plan. (The President's own deliberate ambiguity as to the plan details doesn't help.)

However, many Americans are insufficiently knowledgable about the Social Security status quo as well. Consider how easy it is for "MSM" to find young people on the street who believe that they won't see anything from Social Security — a misapprehension that drives a lot of people on my side of the aisle nuts — which given the program's dedicated funding source is only true if Social Security is deliberately killed.

Moreover, privatization advocates commonly base representations of the potential benefits of Social Security private accounts on the assumption that historical stock returns will be available on a forward-looking basis, which is not a proposition that most Americans are able to seriously assess on the technical merits.

What I also found interesting is that it found that AARP members are also very supportive of personal accounts. Given that these are people bombarded with anti-Bush material from the AARP, the numbers mean a lot.

Again, getting good uptake on a fantasy plan constructed to be nonthreatening to the respondents is not so challenging. Interestingly, the last two Ayres questions show somewhat greater enthusiasm for letting the under-55s have private accounts than for respondents having the opportunity themselves.

Perhaps that relates to an interesting Pew finding: 55% of surveyed non-retirees think they'll get the bulk of their retirement income from their savings, whereas a 45% plurality of retired respondents indicate Social Security as their primary income source.

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* I.e., a group that appears to be a grass-roots organization, but which is actually organized by special interests.