Reuters reporter Andrea Hopkins in her report on Greenspan’s March 2 testimony (9th paragraph):

Still, Greenspan said the fact that such a plan (for Social Security private accounts) could lead to government involvement in financial markets gave him “certain pause.”

Greenspan’s full testimony is here. The word “pause” does not appear, let alone “certain pause.”

Further, Greenspan did not discuss anywhere in his speech what Ms. Hopkins referred to as “government involvement in financial markets.” A complete reading of the testimony shows NO occurrences of “involvement,” NO occurrences of “financial,” no occurrences of “market” or “markets.” There are two occurrences of “stock,” but only as “capital stock” (which is either the nation’s total wealth or savings reserves), and in both cases he was clearly NOT referring to the financial markets.

Finally, private accounts by definition DON’T represent government involvement. Individuals make choices as to what to with their money within the range of options allowed. As I understand it, the proposals, when they appear, will allow individuals to choose among 6-8 different index mutual funds. It would have made no sense for Greenspan to make an association between goverment involvement in the markets and individual Social Security accounts.

So……Did Andrea Hopkins just make it up?

UPDATE: In a call to Reuters this evening, the polite woman I spoke with thought that perhaps Mr. Greenspan might have strayed from his prepared remarks, or that Ms. Hopkins was referring to Greenspan’s responses to questions from the committee. I don’t think The Fed Chairman takes questions (WRONG–See Update 2), but this will all have to wait until Thursday.

UPDATE 2: The Reuters person I spoke to stated that Greespan’s “certain pause” was in a response to a Congressman’s question about whether picking a trustee for the Social Security investments was tantamount to government involvement in the markets. Since there is no proposal formally on the table yet, Greenspan said that issues like this would give him a “certain pause.”

Two points:
- IF, IF the proposals involve index funds as the only investment alternatives, my point that the government would NOT be involved in the markets stands. But Greenspan, who is IMHO being a bit disingenuous here, is correct in having a degree of anxiety if this ends up NOT being the case, because unscrupulous financial planners might put their clients into ill-advised investments.
- Ms. Hopkins gave no indication that Mr. Greenspan’s “certain pause” statement was not in his prepared remarks, or that it was in response to a question, and IMHO she should have.

There was an ID Theft Summit in California yesterday. USA Today reports:

Nearly one in 10 victims last year were from California, which had five of the nation’s top 15 regions for identity fraud reports, according to Federal Trade Commission data released last month. Although greater Phoenix reported the most fraud per capita, Californians in Riverside, San Bernardino, Los Angeles, San Francisco, San Diego and Sacramento counties were also highly vulnerable, according to the FTC.

Identity thieves live and strike disproportionately in the Sunbelt; California, Texas and Florida account for a disproportionate number of perpetrators and victims.

So why is so much ID theft occurring in these states? It must be uh, uh, uhhhhhh, it must beeeeee…. “meth dealers, (who) often use credit scored from identity theft to get money for labs’ raw materials and to pay pushers.” Yeah, that’s the ticket.

Please. Desperate to come up with any reason other than the obvious, the article contradicts itself when it says that Fresno, CA, which is in Fresno County, is the worst area for meth labs. But Fresno is not one of the counties in the “highly vulnerable” list above!

CA, AZ, TX, and FL have the highest concentrations of illegal immigrants in the country. ID theft by illegals is out of control:

During 2002, the year with the most recent figures available, 9 million people paid taxes with mismatched names and Social Security Numbers. Some were women who had failed to notify the agency that their name changed after marriage. Some were the result of typographical errors.

But most — between 50 and 80 percent depending on whom you talk to — represent illegal immigrants using a stolen or manufactured Social Security number at the workplace….

…..In 2001, Social Security reports indicated 35 percent of the wages in the (unassigned Social Security wages) fund were earned by workers in California. In 2002, about 46 percent of the wages that ended up in the fund come from immigrant-heavy industries like agriculture, restaurants and other services, according to Social Security’s Office of Inspector General. Both facts suggest to analysts that much of the fund is the result of payments made by undocumented immigrant workers.

That a conference convened to address identity theft appears not to have even broached the illegal-alien topic makes me doubt the seriousness of its law-enforcement and political participants. ID theft will never be controlled until they do something about the illegal elephant in the room.

UPDATE: Welcome to PrestoPundit readers (would that be PrestoPunditeers?), and thanks to Presto for noticing. Presto also notes that the ChoicePoint ID theft in CA was carried out by Nigerian-born scam artists in the U.S.

Greenspan: (bolds added):

I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver. If existing promises need to be changed, those changes should be made sooner rather than later. We owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. They need to ensure that their personal resources, along with what they expect to receive from the government, will be sufficient to meet their retirement goals.

…..Unfortunately, the current Social Security system has not proven a reliable vehicle for such [private] saving. Indeed, although the trust funds have been running annual surpluses since the mid-1980s, one can credibly argue that they have served primarily to facilitate larger deficits in the rest of the budget and therefore have added little or nothing to national saving.

(paragraph break added to transcript excerpt for clarity)

In my view, a retirement system with a significant personal accounts component would provide a more credible means of ensuring that the program actually adds to overall saving and, in turn, boosts the nation’s capital stock. The reason is that money allocated to the personal accounts would no longer be available to fund other government activities and–barring an offsetting reduction in private saving outside the new accounts–would, in effect, be reserved for future consumption needs.

Translations:
- The system is hurting badly.
- That’s because the politicians spent the money.
- Private accounts will keep the money out of the politicians’s greedy hands.

Which leaves only one question: Did Greenspan get his speech from yesterday’s Social Security Point 2 of the Day, from Steff Chalk’s Saturday column, or both?

UPDATE: As of 12:30 ET, as you might expect, not one word about Greenspan’s note that creating and enhancing private accounts will keep it away from politicians in (so far) USAT, Marketwatch, or Yahoo (click on links in the right column to check for yourself).