Privatization’s ‘Pied Piper’
With Private Accounts Down on the Count, Ferrara Keeps Swinging
In the fourth inning of a 2-2 ball game, Langley High School freshman Peter Ferrara steps to the plate. His father, Peter Ferrara Sr., is a wreck.
Far too nervous to sit in the bleachers with the other parents, Ferrara perches himself on a bench halfway up the first base line and tries to remain calm.
“I can’t stand it,” he says. “What I like to do is go off by myself during the game and talk to myself. I’ll find a nice quiet spot like this.”
Ferrara has plenty to worry about these days. After writing the original treatise on private accounts for Social Security, Ferrara has watched his brainchild move to the top of President Bush’s domestic agenda, only to be deflated by sputtering political support and anemic polling numbers. Even as Bush travels the country promoting the plan, it appears increasingly unlikely that Ferrara’s life’s work will make it into this year’s Social Security reform.
But none of that matters now. Peter’s up.
Peter Jr. is the only thing more important to Ferrara than Social Security reform. And there’s nothing the devoted single parent isn’t willing to do to help Peter Jr. achieve his goal of playing high-level college sports, even if it means hiring a half-dozen professional coaches, turning his living room into a batting cage and rearranging his life so he’s free to shuttle his son around to training sessions and games.
Private accounts might not make it through Congress, but Peter Jr.’s still swinging.
Birth of an Idea
Although previous thinkers had explored the idea of converting Social Security into a network of privatized personal accounts, Ferrara’s 650-page Harvard Law School thesis, which he finished in the spring of 1979, was the first analysis of the legal, political and economic features of the theory. “It had never been brought together and focused in a coherent analysis,” said Charlie Jarvis, chairman and CEO of USA Next. “What’s going on today is a direct outgrowth of Peter’s work in the ’70s and ’80s.”
“I call him the pied piper of Social Security privatization,” said Wall Street Journal editorial writer Steve Moore.
Today, Ferrara is the senior policy fellow at the Institute for Policy Innovation and the director of domestic policy at the Free Enterprise Fund.
He is a notoriously energetic worker. “I think a lot of people would be happy if he took a few sedatives,” Moore joked.
Ferrara’s breakneck work rate has turned his McLean, Va., home-office into a hopeless mess. The rooms are cluttered with newspapers, baseball bats, loose change, batting helmets, composition notebooks, stereo equipment, cardboard boxes and books. The walls are pockmarked with baseball-sized impressions.
“It’s like a fraternity house,” Ferrara says with a laugh. “I tell Peter, when you’re with a girl, you can’t live like this — but for now it’s OK.”
The 50-year-old Ferrara is 5 feet 6 inches tall with a bulging belly, thick glasses and wildly tangled hair. He has a goofy, endearing presence, and he talks about his son the way a 10-year-old would talk about his big brother. “His chest is so muscled!” he says.
Although only 15, Peter Jr. is already several inches taller than his father. As a running back on the freshman football team, Peter Jr. single-handedly doubled the point totals of all opponents combined, leading his team to an 8-0 season. His .636 batting average on the JV baseball team earned him a late-season promotion to the varsity.
“Peter has the kind of work ethic you wish you could clone on others,” said John Motley, Peter Jr.’s speed coach.
To nurture Peter Jr.’s athletic development, Ferrara has reconfigured his living room into a fully stocked hitting facility, complete with a batting tee, a wall-sized net, a gaggle of bats and a Batmax 550, a newfangled device that uses laser beams to measure bat speed.
As Peter unleashes his ferocious swings, baseballs rocket through the room like mortar rounds.
“It’s a good thing I didn’t get remarried,” Ferrara says, “or we’d never be able to do this.”
Ferrara obtained custody of Peter Jr. in 1992, after his seven-year marriage ended in divorce. “His two priorities in life are his son and free-market economics, he’s either doing one or the other every waking moment of the day,” Moore said. “He’s a single mom.”
Although he puts in some 80 hours a week writing articles and op-eds and answering press calls, Ferrara takes his son to every game, practice and training session on the schedule. “I’ve never seen him miss anything of Peter’s,” said Bill Carter, Peter Jr.’s freshman football coach.
Ferrara was born in Phoenix, Ariz., in 1955. Although neither of his parents attended college, Ferrara found himself drawn to politics and intellectual pursuits from an early age. At 9, Ferrara recalls watching Barry Goldwater at the 1964 Republican National Convention with the enthusiasm that other kids his age had for Saturday morning cartoons. In his early teens, he began devouring lengthy tracks on economics and libertarian philosophy. By the time he was in high school, Ferrara’s writing was so inflammatory that his school paper was “constantly getting banned” by the administration.
Ferrara said he breezed through his high school classes. “Oh I destroyed ’em all,” Ferrara says. “I spent most of my time correcting the teachers.”
At the same time, Ferrara was holding down two after-school jobs at McDonalds and Sears. Soon, he saved up enough money to buy a car.
“Once I got my car and my own stream of income, I really became an independent actor, [my parents] really didn’t know what I was up to,” he said.
Ferrara stayed out all night with his friends, playing cards and zipping through the streets playing a game called “rabbit.”
“Most people thought I was going to get in trouble somehow,” Ferrara said. “This teenager is on his own, he’s going to screw up, he’s going to go to jail, he’s not going to go to Harvard.”
But Ferrara steered clear of trouble. His final grade-point average was not high enough to make him class valedictorian (“they still gave grades for penmanship and physical education back then,” he said), but he was accepted at the nation’s top colleges nevertheless.
Ferrara chose to attend Harvard out of a desire to take his conservative ideology to “the citadel of socialism in America.”
Ferrara finished Harvard in three years and decided to stay in Cambridge, Mass., for law school. It was there that Ferrara wrote a thesis paper that advocated a radical approach to Social Security reform. Recognizing that the system was fiscally doomed, the free-market thinker advocated the use of private accounts, which, he argued, would provide greater returns and make the system more solvent by reducing the long-term obligations on the government.
His thesis would eventually be included in the Cato Institute’s first hardbound book, becoming the sacred text for conservative Social Security reformers throughout the ’80s and ’90s. In 1999, Ferrara’s plan emerged as the centerpiece of Bush’s plan to overhaul Social Security.
Recent polls indicating the public’s skepticism of personal accounts, and a growing belief that the plan cannot make it through Congress, have caused many conservative politicians to shift their support to less radical modifications to the current government-run system, such as price indexing, tax increases and benefit cuts.
Just last week, Sen. Bob Bennett (R-Utah) met with President Bush to discuss a bill that Bennett plans to introduce in the Senate, which would address Social Security’s solvency issues without including personal accounts. Bennett said that Bush was receptive to his ideas. “I like your bill. Period,” Bennett quoted Bush as saying.
Ferrara finds such shifts in Republican support inexplicable. “They’ve won election after election campaigning on personal accounts,” he said. “Nobody campaigned on price indexing, delaying the retirement age or any of that.”
What’s more frustrating to Ferrara is the manner in which support for private accounts has eroded. “The left’s not beating it,” he said. “It’s the White House and the reformers who are beating themselves.”
Ferrara praises the president for promoting personal accounts, but slams his advisers for the way they are packaging the message. Rather than framing the idea as a possible solution to a dysfunctional system, the plan should be presented as an exciting new way to look at Social Security, he said.
“What you should do is make a presentation saying, ‘We’ve got a great idea here,’” he said. “It’s called personal accounts and here’s all the great things personal accounts do.”
Rick Tyler, a spokesman for former Speaker Newt Gingrich (R-Ga.), who was an early proponent of private accounts, agrees. “If the White House had listened to Peter Ferrara, they wouldn’t be having the difficulty they’re having today on Social Security,” he said.
Ferrara hasn’t given up on private accounts yet, but he recognizes that it will be an uphill battle.
When the umpire calls a strike on the outside corner of the plate, Peter Jr.’s count goes to 3 and 2.
Ferrara can barely watch. “Come on, hit this one,” he says to himself.
The pitcher kicks and delivers a fastball, which Peter Jr. smashes up the middle for a single.
As the crowd cheers, Ferrara beams with pride. Two batters later, Peter Jr. is knocked in by a double, scoring what proves to be the game-winning run.