Market Correction

23 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Opposed to globalization, Jeff Milchen asserts that "The only truly sustainable path for business in the 21st century is localization" (Letters, November 23). Mr. Milchen should learn some history. He can begin with Fernand Braudel's 1981 book The Structures of Everyday Life, which details the living standards of ordinary Europeans during the late middle ages. This era was emphatically one of localization: people consumed only locally grown foods and locally made clothing. All building materials were local. There were no highways, railways, or CO2-emitting engines to pollute the local atmosphere with greenhouse gases or with foreign goods and foreign ideas.

But paradise had its price. Starvation was common, as was death by plague. Giving birth was more dangerous for women than a game of Russian Roulette. People lived in tiny one-room dirt-floor huts without indoor plumbing. During the winter, some of the farm animals (all local!) shared these accommodations.

What little "business" there was during the long era of localization - subsistence farming - might have been sustainable, but human dignity and human life certainly were not.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

22 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

In Katrina's aftermath, the New Orleans Audubon Aquarium restocked its fish collection at a cost of $99,766. But FEMA, on the hook to pay for this restocking, long insisted that the Aquarium should have achieved the same end by spending $618,849. FEMA took 17 months to conclude that saving taxpayers nearly a half-million dollars is acceptable ("Aquarium Wins FEMA Pay for Fishing Trips," November 22).

Given this incident - which is common - on what realistic basis do "Progressives" conclude that Americans will benefit if Uncle Sam supplies universal health insurance? On what realistic basis do neocons conclude that non-Americans will benefit if Uncle Sam remakes their societies? I realize that Serious People dismiss the reality of blatant, almost comical, instances of bureaucratic bungling as an intellectually unsound reason for skepticism of expanded government power. But why? Why do so many "reality-based" folks dismiss reality as a guide to how government really operates?

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

21 November 2007

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

To the Editor:

Anyone seeking at least one good reason for the dollar's falling value should ponder your report on how Iowans benefit from globalization and yet nevertheless increasingly clamor for protectionism ("A Globalization Winner Joins in Trade Backlash," November 21). With politicians brazenly pandering to this economic ignorance, America very likely will soon become less open to international commerce. And being less open to trade not only makes Americans poorer, it makes America a less attractive place to invest. As investors seek relatively greener pastures, demand for the dollar falls.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

20 November 2007

Editor, The New York Post

To the Editor:

Iran’s president Ahmadinejad insists that the dollar is "a worthless piece of paper." I'm happy to relieve him of the burden of holding valueless scrip. I invite Mr. Ahmadinejad, and everyone else who shares his assessment of the dollar, to mail to me every one of their worthless pieces of paper. I'll even pay the postage.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

19 November 2007

Editor, The Washington Times

To the Editor:

Among the jobs of any Secretary of Agriculture is to portray the administration as smart, fiscally responsible, and in awe of farmers' goodness and wisdom. Secretary Chuck Connor tries to do his duty in "Farmers deserve better" (November 19).

But those of us who don't work for the Beltway circus should ignore the corny debate over the relative merits of the Bush administration's offensively expensive farm bill against those of Congress's obscenely expensive alternative bill. We should instead tell our "leaders" that the best farm bill is no farm bill. There is no sound reason for government to subsidize farmers or to protect them from foreign competitors. Any farmer or rancher too incompetent to produce food that consumers pay for voluntarily should find other employment.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

18 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Douglas Martin's obituary of Harold Berman is eloquent and wise ("Harold J. Berman, 89, Who Altered Beliefs About Origins of Western Law, Dies," November 18). But in describing the thrust of Professor Berman's most celebrated work - his 1983 book Law and Revolution - Mr. Martin misses that work's central point.

That point is not so much that today's western legal tradition began earlier than the 16th century. Rather, the point is that law in the west emerged from the competition between popes and princes for sovereign power - and from the competition of both church and state with manors, cities, and merchants for jurisdiction over a wide variety of disputes. Mr. Berman's momentous scholarship revealed that our modern conception of law as being exclusively the dictate of a sovereign power is mistaken.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

17 November 2007

Editor, Baltimore Sun

To the Editor:

Although de rigueur among "progressives," Jim Salvucci is mistaken to describes bourgeois values as "empty" and consumerism as "mindless" (Letters, November 17). Bourgeois values encourage the substantive and mindful traits of hard work, sobriety, thrift, honesty, and self-reliance - all of which earn their practitioners the ability over time to enjoy greater material comforts and amusements.

What is truly empty is the value that counsels A to live off of the wealth given to him by B and which B confiscated from C. And what is truly mindless is the notion that society progresses as greater numbers of us live as "A"s or as "B"s, and all the while thinking of "C"s as being nothing more than contemptible cows to be milked for the "general good."

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

16 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Paul Krugman asserts that Social Security faces no financial crisis ("Played for a Sucker," November 16). His only evidence? Peter Orszag's and Philip Ellis's statement that the largest fiscal problem confronting Uncle Sam is the projected growth in health-care costs.

Mr. Krugman's logic is as compelling as would be that of a physician who concludes that tuberculosis isn't a serious illness because pancreatic cancer is even more lethal.

In 2005 testimony before Congress, the eminent economist Thomas Saving - appointed by President Clinton to serve as a Public Trustee of the Social Security and Medicare Trust Funds - acknowledged that Medicare and Medicaid are in worse financial shape than is Social Security. But Mr. Saving also warned that Social Security's financial condition is precarious. Speaking for the Trustees, Mr. Saving said that action to fix Social Security's coming insolvency "should not be deferred any longer than necessary for due deliberation and decision."*

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* http://mysocialsecurity.org/main/news.php?ItemsID=115

15 November 2007

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

To the Editor:

Rafael Medoff makes a good case that Churchill's politics prevented him from saving as many Jewish lives as he would have saved had he not refused to open British-ruled Palestine to Jews seeking escape from Hitler's killers (Letters, November 15). But let's not forget F.D.R.'s unforgivable refusal to admit into the U.S. the 937 Jews trying to escape from Germany in 1939 aboard the ship St. Louis.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University>

14 November 2007

Editor, Baltimore Sun

To the Editor:

"Rosemary's Baby" and "The Boys from Brazil" are indeed the two most popular novels written by the late Ira Levin ("'Rosemary's Baby' Author Ira Levin Dies," November 14). But his best work, in my opinion, is his little-known 1970 novel "This Perfect Day." In this work, Mr. Levin describes the horrors unleashed by a collectivist mentality that deifies the state as the creator of all that is orderly and good in society - a mentality that, as a result, empowers government to crush liberty and individuality. "This Perfect Day" should rank with other collectivist-dystopian works such as Orwell's "1984" and with Huxley's "Brave New World."

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

13 November 2007

Editor, USA Today

To the Editor:

DeWayne Wickham's analysis of the dollar's declining value is flawed ("Weakening dollar reflects USA's fading world status," November 13). First, prosperity isn't created by a nation having "economic dominance" (whatever that means); it is created by open markets unburdened by excessive regulations and taxes. Second, the size of the trade deficit is no part of the explanation for the dollar's fall. What must be explained is why investors until recently were keen on the dollar (and thus caused the trade deficit to rise) and why they are less keen on it now. I have my hunches for this change in investors' sentiments - namely, Congress's increasing hostility to free trade and its mounting enthusiasm for raising taxes, and the Fed's acceleration of the growth of the supply of dollars.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

12 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Here's the scariest line I've read in ages: "The era of laissez-faire happiness might be coming to an end. Some prominent economists and psychologists are looking into ways to measure happiness to draw it into the public policy realm" ("All They Are Saying Is Give Happiness a Chance," November 12).

Several decades ago, some economists - enamored of their increasing ability to describe statistically existing patterns of production - fancied that a new age was dawning in which government would improve the lot of ordinary people by substituting its own production and distribution "plans" for the results of the market. These fancies proved to be dangerous fantasies. We would all be much better off - happier, even! - if this new generation of planners are laughed out of the public arena before their power grows to be as large as their gargantuan arrogance.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

12 November 2007

Editor, Washington Post
1150 15th St., NW
Washington, DC 20071

Dear Editor:

Sebastian Mallaby sensibly finds merit in Benn Steil's call for currency to be supplied by the private sector ("The Dollar In Danger," November 12). But Mr. Mallaby misses the mark somewhat when he writes that "The more the dollar slides, the less Steil's suggestion sounds like a fantasy from a movie studio." History beat Hollywood to this story line.

Several economies have successfully used private currencies in the past. The most famous of these was Scotland from the early 18th century until 1845, when the Scottish Banking Act ended free entry into the currency-issuing business. Research by George Selgin, Lawrence White, and others shows not only that markets can supply money, but also that privately issued money is quite sound.*

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* An excellent survey is George A. Selgin and Lawrence H. White, "How Would the Invisible Hand Handle Money?," Journal of Economic Literature, Vol. 32, December 1994.

11 November 2007

Editor, The Washington Times

To the Editor:

Rep. Jim McDermott's need to stir up demands for his and his colleagues' "services" does not justify his misinterpretation of Walter Williams's recent column (Letters, November 11). Mr. McDermott is shocked - shocked! - that Prof. Williams writes that poverty in America has "virtually disappeared." In fact, however, Prof. Williams wrote that "Poverty in the United States, in an absolute sense, has virtually disappeared." Mr. McDermott conveniently forgot to include, when quoting Prof. Williams, the part about "in an absolute sense."

Poverty in America, in an absolute sense, has indeed virtually disappeared. No American dies of starvation (although some do die from OVER-eating). And nearly every American is housed, clothed, entertained, and cared for medically in ways that nearly all of our pre-industrial ancestors would have thought possible only in Shangri-la.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

10 November 2007

Editor, The New York Post

To the Editor:

Jonah Goldberg wisely advises suspicion whenever corporations parade their green sensibilities ("NBC's green fraud," November 10). Public displays of concern for the environment too often mask corporations' goal of using regulations to fatten their bottom lines by restricting consumer choice.

For example, consider Weyerhaeuser Co.'s vigorous support for regulations protecting spotted owls. As documented by economist Bruce Yandle, by significantly curbing logging in public forests, these regulations raise the prices that Weyerhaeuser gets for the timber it logs from its own forests.* Green indeed.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* Bruce Yandle, "Bootleggers and Baptists in Retrospect," Regulation, Vol. 22, Fall 1999.

9 November 2007

Editor, Washington Post
1150 15th St., NW
Washington, DC 20071

Dear Editor:

Sen. Charles Schumer supports Judge Michael Mukasey's bid to become Attorney General because Mr. Mukasey will, in Sen. Schumer's words, "remove the stench of politics from the Justice Department" ("Mukasey Says He'll Be Independent," November 9). Alas, because Mr. Mukasey is a political appointee, this result is highly unlikely.

Either way, though, I applaud Sen. Schumer's recognition of the nature of politics. And so I ask him: if it is desirable to fumigate the Justice Department from the stench of politics, would it not be even more desirable to fumigate our entire society from this appalling, foul, and enervating stench?

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

8 November 2007

Editor, The Washington Times

To the Editor:

Alluding, as you correctly report, "to the possibility of economic retaliation by European states stung by the falling dollar," French president Nicolas Sarkozy yesterday warned of "economic war" ("China signals dollar swap," November 8).

Higher tariffs are indeed hateful and harmful. But do keep in mind an important difference between real shoot'-em-up wars and "economic wars": in "economic wars," each belligerent government aims its weapons only at its own citizens, demanding that they avoid taking advantage of good economic deals offered by foreigners. Put differently, in "economic wars," when the government of A attacks citizens of A, the government of B "retaliates" by attacking citizens of B. Then to further punish B, the government of A increases the scale of its attack on citizens of A. And so it perversely goes.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

7 November 2007

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

You unnecessarily weaken your case for the US-Peru free-trade agreement by conceding that Americans' wages are stagnating ("Pass the Peruvian F.T.A.," November 7). They are not.

In his recent study of data on wages and incomes, Minneapolis Fed Senior Economist Terry Fitzgerald finds "that labor income per hour for middle America has not stagnated. Rather, the economic compensation for work for middle Americans has risen significantly over the past 30 years."*

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* Terry J. Fitzgerald, “Has Middle America Stagnated? A Closer Look at Hourly Wages,” The Region, Federal Reserve Bank of Minneapolis, September 2007.
Available on line at:
http://www.minneapolisfed.org/pubs/region/07-09/wages.cfm

6 November 2007

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

To the Editor:

Kelly Kennedy approvingly quotes Oliver Wendell Holmes, Jr.'s assertion that "Taxes are what we pay for a civilized society" (Letters, November 6). But Holmes was mistaken. Civilization progresses as it reduces resort to centralized direction and force and instead develops institutions, such as private property and markets, that increase the possibilities for productive, creative, and peaceful cooperation among individuals.

As Cato Institute president Ed Crane rightly remarks, "Taxes are actually the price we pay for our failure to create a civil society."

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

5 November 2007

Editor, WSJ.com
200 Liberty Street
New York, NY 10281

To the Editor:

Were your organization run by friars reincarnated from the dark ages - or by today's editors of The Nation - I could understand your "Question of the Day" - which, today, is "How much do home prices in your neighborhood need to fall before they are fair?" But surely you’ve progressed beyond believing that fair prices are something other than those terms voluntarily agreed to by buyers and sellers.

And surely you also understand that there is nothing at all unfair about the current owner of a home choosing not to sell that home at any price that he, for whatever reason, regards as too low.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University