‘The Anti-Wall Street Journal?’

Thanks to The New York Sun for straightening out the Wall Street Journal on the difference between Social Security and 401(k) rates of return [“The Anti-Wall Street Journal?” Editorial, December 2, 2004].Technically, however, “rate of return” is an investment term. It does not apply to Social Security because Social Security is not an investment vehicle; it is a pay-as-you-go wealth-transfer program. You use the term “implicit” ROR regarding Social Security, which acknowledges that it is an imputed, i.e., hypothetical, average payout. Technically, it is not a “return” because it’s not your money that you receive during retirement; it’s someone else’s.

Furthermore, asserting that the relevant comparison is between a Social Security ROR of 1% and 6.3% for 401(k)s is grossly misleading because both are averages, i.e., these rates are in the aggregate and do not apply to most individuals – some will get higher “returns,” some lower.

Observe that if someone leads a productive life, pays Social Security taxes for four decades, then dies around retirement time, he not only gets a zero ROR, he loses his “principal,” i.e., he does not leave an estate. This lifetime confiscation of wealth is part of the implicit ROR calculation. This gross inequity cannot happen under a system of personal retirement accounts. Rates of return will vary from year to year, but through dollar cost averaging over a working lifetime combined with the power of compounding, workers will build and own real wealth.

But the folly of discussing an implicit ROR for Social Security is further compounded by the fact that any hypothetical “return” is based on current law, which proscribes benefits that cannot be sustained. Today’s young workers will see their benefits cut by one-third or payroll taxes increased by 50% in order to sustain the program – unless we switch to a fully funded system of personal retirement accounts.

EDWIN R. THOMPSON
Manhattan

‘The Spirit of 1946’

Bravo to The New York Sun’s music maven Will Friedwald for his stories on the great Woody Herman and Fred Astaire [“The Spirit of 1946,” Arts & Letters, November 30, 2004].

Herman was one of the innovators of modern jazz (as was Stan Kenton) in the 1940s and his music always had that crisp, driving sound that eventually earned his orchestra the title, “Thundering Herd.

Herman could also vocalize with the best of them. This collection of the best of Woody Herman is a must for all fans of quality music.

Fred Astaire is one of those immortal entertainers whose acting, singing, and dancing amounted to an unbeatable talent in the world of entertainment.

Just like Frank Sinatra, Bing Crosby, Louis Armstrong, and Ella Fitzgerald, the secret of all their success was style and class. And that’s the problem with today’s performers.

Mr. Friedwald himself has written many books about the great artists of yesteryear and boy, would I love to return to those years.

Thank you, New York Sun. You’ve brightened up my day.

HERBERT STARK
Massapequa, N.Y.

Freedom Tower Security

The so-called Freedom Tower is more accurately designated Surrender Tower. It represents the success of the terrorists in knocking us down to size and, with the complicity of the Lower Manhattan Development Corporation and the dictatorial commands from Governor Pataki, leaving us in such a condition [“Freedom Tower Security Issues Worry Police,” Jill Gardiner, Page 1, November 19, 2004].

The Pentagon was rebuilt and, had they been hit, the White House or the Capitol would have been rebuilt. Why are we denied new World Trade Center towers?

Why is the Daniel Libeskind plan, rejected in every public poll and even by the LMDC’s own Pataki-appointed committee, being imposed on us?

Why were much better plans rejected, indeed, not even considered?

JOE WRIGHT
Manhattan

New Free-Speech Movement

Ronald Lauder’s op-ed, “A New Free-Speech Movement, Starting with Alumni,” is right: Students are not all stupid despite the best efforts by many professors to render them so [Opinion, December 8, 2004].

Many undergraduates see through the silliness and mendacity of their teachers.

If it was possible for a leftwing revolution to manifest itself in the 1960s, it should be no less possible for a conservative revolution to manifest itself today.

J.J. GROSS
Riverdale, N.Y.

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