- The Washington Times - Saturday, March 15, 2008

ANALYSIS/OPINION:

Don’t SAVE it

You can’t sprinkle technology on deep-running economic and social problems to make them go away (“Save the SAVE Act,” Editorial, Friday). Making the “E-Verify” program mandatory nationwide would not be the tonic for the illegal immigration problem so many believe.

While failing to prevent illegal immigration, national E-Verify would send millions of American citizen workers to the Department of Homeland Security and the Social Security Administration to plead for the right to work. By increasing the returns on identity fraud, mandated E-Verify would cause crime rates to rise.

An accurate employment eligibility verification system ultimately requires a national identification system, with all the big-government ills that such a program would entail. It would cause law-abiding American citizens to lose more of their privacy as government records about them grew. Mission creep all but guarantees that the federal government would use national E-Verify to extend federal regulatory control over Americans’ lives even further.

JIM HARPER

Director of information policy studies

The Cato Institute

Washington

Fallon and Iran

Admiral William J. Fallon’s resignation from his position as head of the U.S. Central Command, undoubtedly due to pressure from the Bush administration, is a blow for those seeking a diplomatic resolution to the current standoff with Iran (“Lawmakers praise Fallon,” Fishwrap, Thursday).

Mr. Fallon was one of a group of senior military officers, including many of the Joint Chiefs of Staff, who were increasingly alarmed by indications that President Bush and Vice President Dick Cheney were contemplating a possible attack on Iran.

He reportedly made his opposition to a strike known to the White House early on in his tenure. As head of Central Command, he controlled all ground, air, and naval military access to the region and could have made it very difficult for the Bush administration to carry out such a strike. His removal greatly increases the chances of pre-emptive military intervention against Iran.

STEFAN SIMANOWITZ

Chair, Westminster

Committee on Iran

London

Hug an Exxon exec today

It is hard to believe how wrong your editorial “ExxonMobil’s spending habits” is (Friday). It represents the antithesis of looking at the big picture. Have you ever looked at the relationship between long-term growth in GDP and corporate profits?

Shouldn”t they be parallel? Go back to 1820 and you will find real stock prices have grown at about 2.5 percent and GDP at about 3.5 percent. The difference is a real bummer for your 401(k). The rate difference is slippage, and results from the creation of new shares as companies capitalize new technology. The bad news is that the market capitalization slowly pulls away from the market price.

If you look at this net share dilution from the perspective of the long-term per-share dividend growth rate versus GDP, you will find that the real net dilution of outstanding shares is actually about 2 percent.

If you are expecting technology to bail out your long-term equity investment, I would not count on it. It represents a long-term equity return drag as companies capitalize those technologies.

The only reprise from creative destruction in the economy and its effect on stock portfolios is called the stock buyback.When a company such as ExxonMobil cannot find any good investments with its profits and chooses to buy back its shares, it is about the only rare instance of a counter to the continual share dilution. You ought to get down on your hands and knees and thank ExxonMobil for doing the right thing.

SAMUEL BURKEEN

Reston

O’Malley and the pay raises

As Maryland’s Secretary of Budget and Management, responsible for oversight of the state’s personnel system and budget, I feel obligated to write to correct the misleading information and deviations from fact included in the series of articles by Tom LoBianco (“O’Malley top aides get pay increases,” Page 1, March 8 and “O’Malley places top aides in new pay grade,” Page 1, Tuesday).

The entire premise of Mr. LoBianco’s March 8, article is incorrect. Mr. LoBianco suggests repeatedly that a number of current Maryland officials received significant pay raises since being hired last year. The basis for his assertion is a comparison between the salaries of officials in the final year of the Ehrlich administration to officials in comparable positions in the first year of the current administration. Therefore, any increases — and decreases — in salaries listed for individual positions reflect those granted new appointees upon hiring and not raises they were awarded once serving in the position. As in any enterprise, employee salaries upon appointment reflect qualifications, experience, and a host of other factors.

A few things Mr. LoBianco did not point out:

• Of the 182 positions in the Executive Pay Plan during the period in question, 31 experienced a decline in salary between the previous incumbent and the new administration’s appointee. Salary savings associated with these positions totaled over $200,000.

•Taken in total, spending on EPP salaries increased 2.4 percent between January 2007 and January 2008 — and this level of growth includes the 2 percent Cost of Living Adjustment (COLA) received by all state employees.

•When adjusted to remove the COLA increase, aggregate EPP salaries increased by one-half of one percent. This is not an unreasonable level of growth and nowhere near the level implied by Mr. LoBianco.

Mr. LoBianco’s misleading presentation of information continued in his follow up article published on Tuesday. The new Executive Service Scale referenced in the article was actually established to increase transparency in government by including in the Executive Pay Plan three positions that were previously in individualized scales that were inadvertently excluded from budget submissions in past years. These included salaries for the governor’s chief of staff; the deputy secretary of the department of health and mental hygiene, a physician responsible for all public health programs; and the state’s chief medical examiner. These positions were already in pay scales with higher-than-standard pay ranges, up to $232,000 in the case of the chief medical examiner. The fourth position, the chairman of the Public Service Commission, was in a flat-rate classification, but was more appropriately placed into an EPP scale. These individuals did not receive pay raises as a result of being placed in the new pay scale.

Finally, Mr. LoBianco incorrectly states that I testified in favor of a bill to remove an Executive Pay Plan reporting requirement from the law. While I did not testify on the bill, a member of my staff did so and with good reason — the bill in question repeals a redundant reporting requirement. Since 2001, the executive branch has been required by a provision in the annual budget bill to submit quarterly reports on salaries in the Executive Pay Plan. The bill we supported removes an annual reporting requirement which is no longer necessary in light of the required four reports per year.

Gov. Martin O’Malley is committed to transparency in government and to implementing sound fiscal management. The series of articles by Mr. LoBianco does not accurately portray the standards and polices of this administration. I trust that The Washington Times will endeavor to set the record straight.

T. ELOISE FOSTER

Secretary

Maryland Department of Budget and Management

Annapolis

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