Market Correction

28 April 2006

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

Dear Editor:

Michael Kinsley is uncharacteristically careless when he writes that a windfall-profits tax "would have no effect on the incentive to extract more oil from American ground" ("Tax the Windfall," April 28). A 1990 study from the Congressional Research Service* found that the windfall-profits tax in place between 1980 and 1988 not only brought in a mere 20 percent of its forecast revenue, it also reduced domestic production by up to 4.8 percent.

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


* Salvatore Lazzari, "The Windfall Profits Tax on Crude Oil: Overview of the Issues," CRS Report 90-422 (1990).

27 April 2006

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

Dear Editor:

Your report of Tom Hertz's study on income mobility is disappointingly uncritical ("Rags-to-Riches Dream an Illusion: Study," April 26). Perhaps it's true that the "likelihood that a child born into a poor family will make it into the top five percent [of income earners] is just one percent." But since when does a person's failure to rank among the top five percent of income earners mean that he or she has been denied economic opportunity?

Focusing on relative income, Hertz mistakenly implies that Americans who earn incomes just high enough to rank in, say, the top 50 percent are deprived. Average incomes in an extraordinarily wealthy country such as the United States are far higher than are top-five percent incomes in a destitute country such as Niger. No American need be among the top five percent of U.S. income earners in order to be the happy beneficiary of vast economic opportunity and prosperity.

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

27 April 2006

The Editor, Christian Science Monitor

To the Editor:

Richard Heinberg of the Post Carbon Institute wants governments to sign an international treaty through which they agree to reduce their countries' oil consumption (Letters, April 27). Such a treaty is unnecessary. If oil supplies continue to shrink relative to demand, petroleum's price will continue to rise. This higher price will cut oil consumption far more effectively and efficiently than will any international treaty.

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

26 April 2006

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

To the Editor:

Odyssey House President Peter Provet says that "marijuana is a gateway drug that leads to the use of more dangerous drugs like cocaine and heroin" (Letters, April 26). His evidence? Most Odyssey House patients report using marijuana before they turned to harder drugs.

I'll bet my pension that most of these same patients, if asked, would report that they also started drinking alcohol and having sex before turning to harder drugs. Would Mr. Provet then argue that beer and orgasms are "gateway" experiences to the likes of cocaine and heroin?

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

25 April 2006

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

Dear Editor:

More and more politicians clamor to tax oil-companies' recent high profits ("Bush Orders Probe Into Gas Pricing," April 25). In the past few days, Sen. Arlen Specter and other officials have called these profits "out of control," "unfair," and "windfall."

This demagoguery is as cheap as it is nauseating. If Our Leaders in Congress truly believe in the justice of confiscating from asset owners any large above-normal returns, why not also impose a "windfall-profits tax" on residential real estate whose value has recently skyrocketed?

Of course, that (thankfully) won't happen. But if an American homeowner isn't treated as a crook when the value of his principal asset rises significantly, why is an oil company treated as a crook when the value of its principal asset rises significantly?

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

24 April 2006

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

To the Editor:

Paul Krugman warns that America's recent string of trade deficits inevitably will trigger a painful economic reckoning ("CSI: Trade Deficit," April 24).

I wonder. America ran a trade deficit pretty much every year from the first English settlement at Jamestown until World War I.* Economically, that was a darned successful 300-year period.

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

* William A. Niskanen, "The Determinants of US. Capital Imports," Annals of the American Academy of Political and Social Science, July 1991, pp. 36-49.

22 April 2006

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

To the Editor:

Understandably disturbed by the Bush administration's unscientific dismissal of the medical potential of marijuana, you lament that this administration has a "habit of politicizing its scientific agencies" ("The Politics of Pot," April 22).

Sorry. The FDA is no scientific agency. It's a political agency - created by, funded by, staffed by, and overseen by politicians and their appointees. You're hallucinating when you imagine that such a creature can be free of the choking smoke, distorting mirrors, and narcotic poisons of politics.

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

21 April 2006

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

To the Editor:

Your report "U.S. Crackdown Set Over Hiring of Immigrants" (April 21) could instead be headlined "U.S. Steps Up Effort to Stop Industrious People from Working."

Until Uncle Sam reverses his long-standing policy of actively restricting immigrants' employment opportunities, assertions that immigration must be curtailed because immigrants come here to sponge off of American taxpayers will ring hollow.

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