- The Washington Times - Tuesday, March 14, 2006

Age-old problems with old-age policies

I do not doubt that there is a high probability of going down the road that William Shipman suggests (“Slippery Social Security slope,” Commentary, yesterday). And you can only get there by employing the farcical claim that there is a difference of return to be gleaned from the bonds in the Social Security trust fund and the capital markets. This return is the difference between writing yourself a loan at an imaginary interest rate and your investment return. It is a fiction, of course, but unfortunately, the risk associated with your investment is not, and there is the rub. Risk increases with time, and any pension fund manager knows the uncertainty of his risky assets make that so; the longer his horizon, the more uncertain the final portfolio value.

The problem with Social Security is basic honesty, and until that gets fixed, you can expect all manner of Rube Goldberg fixes. President Bush was wrong to rationalize private ownership by intimating that all takers will get some average return, which will obviate their Social Security benefits. However, the other side always has claimed “old age insurance,” and the word “social,” has rarely been inserted. Mr. Shipman cites a speech by President Franklin D. Roosevelt employing the qualifier “social,” but this is selective. He needs to look at all the speeches in which the qualifier was dropped. During the first 20 years of Social Security, the fund’s administrators expended great effort to convince the public that their taxes were insurance premiums, buying an annuity to survive in old age. I do not think this changed until the ‘80s, when they started inserting language in your annual benefit estimate to the effect that you might not get what is projected.

I am afraid that Social Security is not going to be reformed until the public recognizes it for what it is. Its financial structure is no different from that of any other welfare program. You take a dollar of taxes from A and give it to B. If the demographics change, the economy heads south and those taxes do not materialize, you do not have it to give to B. The work force needs to accept that if it wants an old-age social welfare program, it must pay taxes to fund it, and if the work force wants to fund its retirement, it needs to save and invest on its own. There is no free lunch — the investments may not amount to what you expect in the future. Social Security is just one more instance of people chasing a guarantee that never existed.



The drama of ‘Crash’

William Tucker accuses the Oscar-winning film “Crash” (Culture, et cetera, yesterday) of pushing the “Hollywood” idea that “everyone is a racist.” He must have seen a different film than the one I saw.

“Crash,” though not a box-office smash, deserved the Academy Award for best picture for dramatically demonstrating that humans are very complicated; that life is in shades of gray rather than “Hollywood” black and white in Technicolor; that people have mixed motives and experiences; that we should not rush to judgment; and, quite simply, that “Crash,” like “Lone Star,” “Mother Night,” “Death and the Maiden” and other great films, provides both first-rate drama and a useful set of moral lessons. Like Shakespeare’s plays.

Matt Dillon’s cop is far more interesting and complex than unidimentional “stars” like Arnold Schwarzenegger.


Silver Spring

Milosevic’s legacy

Though the death of Slobodan Milosevic should be a cause to celebrate, his demise should be greeted with bleak satisfaction (“Heart attack cited in Milosevic’s death,” Page 1, Monday). Whatever the grim toasts made to his passing, there remains a lingering sense that he cheated justice and escaped a full accounting of the evils he fostered.

It is legitimate to observe that though Mr. Milosevic did not invent the Serbian question, his uncompromising politics opened a vicious cycle of self-fulfilling ethnic prophecies. His uncompromising style, battle cries, combat metaphors, heroic postures and the particularly repelling combination of orthodox communism and extreme nationalism with which he came to be associated resurrected the 600-year-old dream of a Greater Serbia and provoked the bloodiest period in modern European history.

With a Hitler-like obsession, Mr. Milosevic fanned the flames of Serbian nationalism, provoking war by organizing hate campaigns and ethnic cleansing in Croatia, Bosnia and Kosovo. He has been called a “communist apparatchik,” a “ruthless nationalist populist,” a “Balkan butcher,” a “fascist” and “the most odious statesman in Europe since World War II.”

From Vukovar to Dubrovnik, from the concentration camps of Prijedor and Omarska to the killing fields of Srebrenica, Mr. Milosevic’s poisonous and repugnant reign fueled a bloodstained policy that will be remembered by generations. Murder. Rape. Ethnic cleansing. Genocide. Death marches. Concentration camps. These are all words that Mr. Milosevic and his regime returned to the forefront of history. His criminal enterprise exercised the extermination of tens of thousands of non-Serbian civilians, including women, children and elderly people; the forcible transfer of millions more; and the confinement of countless others under inhumane conditions.

The only regrettable aspect of Slobodan Milosevic’s death is that he was not brought before the world and the families of his victims. Although witnesses’ testimony from his trial is on public record, history will be denied the legal judgment of his personal guilt, and the survivors of his atrocities will be left with only a dismal record of what they endured.



Immigrants and wages

Alfred Tella, citing questionable research, argues, in essence, that the only reason a U.S. employer ever would hire someone on an H-1B visa would be because he or she would work cheaper than Americans, implying that only people born in the United States possess desirable research or technical skills (“Immigration economics … and flows,” Commentary, Monday). The story that a veritable conspiracy exists in America to hire foreign-born professionals so they can work cheaply is unsupported by the evidence.

The report by John Miano that Mr. Tella cites contains a number of flaws. Most important, it uses data that do not reveal what employers actually pay people on H-1B visas. It relies on prevailing wage information alone when, in fact, the actual amount companies pay is much higher. Actual starting salaries for H-1B professionals averaged 22 percent above prevailing wage standards in a sample of H-1B cases selected randomly by a respected law firm for the National Foundation for American Policy.

Our findings are supported by other research. A 2003 study by Madeline Zavodny, a research economist at the Federal Reserve Bank of Atlanta, found that the entry of H-1B professionals neither lowers the contemporaneous earnings of natives nor has “an adverse impact on contemporaneous unemployment rates.” Research by Paul E. Harrington, associate director of the Center for Labor Market Studies at Northeastern University, shows foreign-born and native professionals earn virtually identical salaries in math and science fields. National Science Foundation data show foreign-born scientists and engineers earn more than natives in some fields.

U.S. companies hire and recruit globally. In some cases, this means hiring foreign-born persons on H-1B temporary visas, many times off U.S. college campuses as part of the normal recruitment process. To deny companies access to these skilled scientists, researchers and specialists is to argue that America should either adopt a closed economic model, a la North Korea, or tell U.S. companies to hire all skilled foreign-born professionals outside the United States and expand operations only in foreign countries.


Executive director

National Foundation for

American Policy


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