The Other "CIA"

The Culinary Institute of America was falsely and inappropriately used in Heather Mac Donald's "Torturing the Evidence" (Jan. 24). Mac Donald's article, which is about the participation of doctors in terrorist interrogations abroad, starts with a mock paragraph that uses the CIA as its subject and quotes from a so-called CIA spokesperson who, in fact, does not exist.

Although this paragraph intended to make a point about a possible scenario that could happen in the future, the use of a real institution in an imaginary scenario is both misleading and defaming to the CIA's good name. As a college of higher education, the CIA has a policy of remaining impartial regarding political disputes. We are disappointed that this article intentionally misrepresented the college, and are further disappointed by The Weekly Standard's refusal to publish a retraction.

Heather A. Rafferty
Culinary Institute of America
Hyde Park, NY

Editor's Note: The italicized paragraph that led the article "Torturing the Evidence," represented as an AP story datelined February 13, 2005, was indeed parodic and not factual.

Sharansky's Case

In William Kristol's discussion of Natan Sharansky's The Case for Democracy ("Honoring Democracy," Jan. 24), he does not mention the part of the book that most struck me. Talking about the challenges facing people in a "fear society" versus those facing people in a "free society," Sharansky says the former must find "the inner strength to confront evil," whereas the latter must find "the moral clarity to see evil."

Robert Agajeenian
Los Angeles, CA

Social Capital

Irwin M. Stelzer writes that management fees for privatized Social Security accounts will probably be about "1 percent" ("Social Security Snares & Delusions," Jan. 17). New York Times columnist Paul Krugman agrees with him on this point. They are apparently not aware that dozens of mutual funds have fees that are less than 1 percent, including several index funds that have fees in the range of one-quarter to one-fifth of one percent. Stelzer also states that stocks have historically earned 7 percent. Is that an inflation-adjusted figure? With dividends reinvested--as they would be in a privatized account--the S&P 500 index has grown at about 10 percent per year over many decades.

Stelzer asserts that "with share prices selling at higher multiples than in the past, it is not an unreasonable guess that earnings will be closer to 5 percent." Presumably he is referring to current price/earnings multiples. That betrays a lack of understanding of the market and the way a retirement fund works. Funds would be invested in privatized accounts at regular intervals (month after month, quarter after quarter, or year after year) for 20 to 45 years. As the market rises and falls, some investments will be made at high multiples and some at low multiples. By the time the first privatized Social Security account is opened, multiples almost surely will be different from what they are today. Today's level will have no bearing on the ultimate value of anyone's account.

A.A. Katterhenry
Clearwater, FL

Irwin M. Stelzer errs in his assertion that "[i]mprovements in productivity at rates of recent years . . . will allow the workforce to support a higher ratio of retirees than is now the case."

Because increases in annual benefits are tied to wages rather than prices--and because labor productivity drives wages down--increases in productivity cannot solve the fundamental fiscal problem created by the Social Security Ponzi scheme. Nor will that obvious simple reform--substitution of a price index in place of the wage index--be adopted, because over time it would yield benefits substantially lower than under current formulas.

More generally, Stelzer is far too evenhanded. The plain reality is that Democrats, for the most part, care not one whit about the purported risk of private accounts, (illusory) transition costs, or any of the other goblins hiding in their Social Security closet. They are instead interested in perpetuating a system that makes ordinary people more, rather than less, dependent upon the federal government. In its traditional form, Social Security serves that end beautifully.

Private retirement accounts, on the other hand, promote the opposite outcome, and that is why leftists will never agree to adopt them as a Social Security reform.

Benjamin Zycher
Agoura Hills, CA

Irwin M. Stelzer responds: A.A. Katterhenry is quite right: There are funds that charge a management fee of less than 1 percent. And there may well be economies of scale that make it possible to charge fees at that lower level to privatized Social Security accounts. But I doubt it, for two reasons. First, everyone I talk to in the brokerage business says that these tens of millions of tiny accounts will be very difficult to manage efficiently--note there is no political support for this program on Wall Street, which ordinarily does not look a gift fee in the mouth.

Second, the hope that politicians will allow the completely passive management that produces low fees seems to me unlikely to be realized. When the first congressman realizes that an index fund contains tobacco stocks--or shares in some companies he considers environmentally irresponsible--pressure will mount for changes in permissible investments, driving up management costs.

Katterhenry also says "multiples almost surely will be different from what they are today" when the day of retirement comes. True. Would that we could be certain they are not so much lower that the government feels obliged to step in as insurer of last resort.

Benjamin Zycher accuses me of being "far too evenhanded." Thanks, Ben, for that, and for pointing out that productivity gains alone cannot cure such ills as may exist in the present system. But don't rush to judgment on the question of independence from government. A system in which government selects the instruments in which one is allowed to invest is not all that different in its effects on a citizen's independence than the current system.

When all is said and done, keeping the current system, which has helped to soften the hard edges of meritocratic capitalism sufficiently to make it politically acceptable, combined with tax reform and new incentives to save, seems the better route for President Bush to follow.

Now and Then

I for one have never stopped thinking about yesterday, as Christopher Caldwell so cleverly states in his Jan. 17 Casual ("Don't Stop Thinking About Yesterday"). Back in the 1950s, I came up with this historical timeframe: The period between 1607, the year of the first English settlement in America, and 1776 amounts to the same length of time as the period between 1776 and 1945.

What an extraordinary difference there was in America's development between the first pair of years as compared with the second.

Thomas Hayes
Lee, MA

Christopher Caldwell's essay on calculating half-lives reminded me of an event from a couple years ago. My wife and I were at dinner with two other couples. We were then all in our mid-thirties--and thus too young to know how old we were.

Into the restaurant walked four or five couples obviously on their way to the prom. Several in our group began to reminisce about our own proms--until I uttered a comment that darkened the mood.

All I said was, "You know, those high-schoolers are closer in age to our own children than they are to us." It had been a happy evening until then.

Bob Krumm
Nashville, TN

Kamikaze Redux

Here's a footnote to Duncan Currie's "The Other Special Relationship" (Dec. 20), which suggested, in part, that Japan's World War II defeat and rehabilitation is a precedent for present coalition efforts in the Middle East: Back then, as today, the enemy used suicide bombers--the kamikaze.

Robert E. Bershad
Philadelphia, PA

Errata

Because of an editing error in "Torturing the Evidence" (Jan. 24), we misidentified Jonathan H. Marks as a "biological anthropologist at the University of North Carolina." The article in the New England Journal of Medicine that was the subject of our coverage was coauthored by Jonathan H. Marks of the Georgetown University Law Center and the Johns Hopkins Bloomberg School of Public Health. We apologize to both Mr. Markses.

A Jan. 24 Scrapbook item referred to the December 1992 meeting in which Newt Gingrich explained that his "primary mission" included serving as the "Definer of Civilization." At the time, Gingrich was House minority whip, not minority leader. Longtime Illinois congressman Bob Michel was the House minority leader, a position that he held until his retirement two years later.

William Kristol's Jan. 31 editorial referred to Ronald Reagan's "talk of transcending or overcoming communism" as having occurred "two decades" after the Truman Doctrine. The text should have read two generations.