Market Correction

15 August 2006

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

Dear Editor:

Herman Soifer is upset at the extra costs Americans pay to intern illegal Chinese immigrants who China refuses to take back (Letters, August 15). Putting aside the question of the true costs of these immigrants, Mr. Soifer's proposed solution - that we "enact selective duties on Chinese imports, whose magnitude would be in proportion to the burden China inflicts on us" - is thoroughly wrongheaded.

Duties on imports from China would only burden Americans further. Such duties raise the prices Americans must pay not only for goods imported directly from China but also for goods produced here and in other countries that compete with Chinese goods. The pain from an unpleasant punch in the nose is not relieved by a follow-up punch in the gut.

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

14 August 2006

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

Dear Editor:

Upset by the injuries suffered by Redskins' players in yesterday's preseason game, Michael Wilbon insists that these games are pointless ("Game Doesn't Count, But the Injuries Do," August 14). And he accuses the NFL of greedy irresponsibility for its refusal to forego the extra revenues that these games generate.

Mr. Wilbon misses the point of professional football. It's entertainment for fans, nothing more. If fans willingly pay to attend preseason games, and willingly tune-in in large numbers on television to watch them, these games aren't pointless. As the NFL's substantial revenues from these games prove, preseason games please fans enough, and please enough fans, so that the NFL is perfectly justified in staging them.

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

13 August 2006

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

To the Editor:

There’s irony in Alexander von Humboldt's role in sparking the modern environmental movement (Candice Millard, "Thinking Globally," August 13) - a movement with too many adherents today who love the environment so passionately that they hate, or at least treat with indifference, property rights and individual liberty.

Humboldt's brother, Wilhelm - described by F.A. Hayek as Germany's "greatest philosopher of freedom" - understood that charging the state with correcting the world's many imperfections puts precious freedom in peril. So profound was Wilhelm's respect for freedom that he wrote, in his classic 1810 book The Limits of State Action, that "Coercion may prevent many transgressions; but it robs even actions which are legal of a part of their beauty. Freedom may lead to many transgressions, but it lends even to vices a less ignoble form."

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

13 August 2006

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

Dear Editor:

Karl von Schriltz is distressed that America has three million fewer manufacturing jobs today than in 2000 (Letters, August 13). He should relax. Eighty percent of America's economy now is in the service sector - the sector with the best jobs.

In an economic unit smaller than the US economy - the family - applause rather than distress typically greets the "loss" of manufacturing jobs. For example, my parents are delighted that I work in the service sector, as a college professor, rather than in the manufacturing sector (shipbuilding) that employed my father and grandfather. I'm delighted, too. If almost everyone aspires, for themselves and for their children, to work in service-sector jobs such as physician, lawyer, architect, journalist, and educator, why should we lament an economy that increasingly allows us to fulfill this aspiration?

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

12 August 2006

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

Dear Editor:

There are heaps of bad arguments for raising the minimum-wage. Perhaps the worst, offered by Joel Schipper (Letters, Aug. 12), is that a minimum-wage increase is justified if a full-time worker earning the current minimum wage cannot afford to live "in a city such as Chicago."

Mr. Schipper's argument implies that incomes can be raised by dictate, to whatever level is necessary to live in some locale. If this notion is correct, why settle for enabling workers to live only in the likes of Chicago? Why not raise the minimum wage so that everyone can afford to live in, say, Nantucket, Hyannis Port, or Beverly Hills within walking distance of Rodeo Drive?

"That's ridiculous!" is Mr. Schipper's likely reply. And I agree - which is why I marvel at his belief that incomes can be set by dictate according to the cost of living.

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

11 August 2006

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

Dear Editor:

Frederick Smith and P.X. Kelley say that "Markets do not account for the hidden and indirect costs of oil dependence" ("Are We Ready for the Next Oil Shock?" August 11). Even if true, this fact doesn't justify their conclusion that government, therefore, should more boldly intervene in energy markets.

Political institutions themselves notoriously fail to account for all of the costs of government action - such as when Congress appeases powerful agricultural lobbies by inflicting hidden and indirect costs on taxpayers and consumers. Messrs. Smith and Kelley too sanguinely ignore politics' monstrous defects.

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

10 August 2006

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

To the Editor:

I have two reactions to Norman Ornstein's proposal to lessen political extremism by making voting mandatory ("Vote - or Else," August 10). First, such lessening seems impossible: how many true radicals occupy elective office in the U.S.? When platitudes aren’t pouring from politicians' mouths, all that issues from them are contradictory statements aimed at pleasing as many people as possible.

Second, I refuse to vote as a matter of principle - the same principle that would lead me to refuse to express an opinion to an armed robber who offered me a choice of being threatened with his pistol or his shotgun.

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

9 August 2006

Mr. Charles Osgood
The Osgood File
CBS Radio News

Dear Mr. Osgood:

Your report today on the trade deficit missed some important points. First, when the U.S. trade deficit increases, Americans do not necessarily go further into debt. If, for example, BMW sells cars to Americans and then uses the dollars it earns to build a factory in South Carolina, the U.S. trade deficit rises even though no debt is created by these transactions.

Second, as the example of the BMW factory in South Carolina highlights, the size of the capital stock isn't fixed. Much foreign investment in the U.S. creates productive capital goods that would not otherwise exist. So, you're mistaken to say that a rising U.S. trade deficit means that foreigners are "buying America." As has been true for much of our history since 1607, foreign investment in critical to MAKING America.

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

9 August 2006

Editor, The New York Post

Dear Editor:

You rightly decry NYC school-officials' efforts to govern children's web access at home ("Not a Job For the Schools," Aug. 9). But why are you surprised by this development?

Much of the philosophy behind "public" education - including truancy regulations - holds that politicians and bureaucrats generally know better than parents what's best for children. The reign of this worldview leads naturally to educrats butting in to families' Internet-viewing choices.

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

8 August 2006

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

Dear Editor:

Rep. Jim Kolbe rightly calls on rich-country governments to further reduce their trade barriers and dismantle their obnoxious agricultural subsidies ("How Will The Poor Trade Up?" Aug. 8). But he overestimates the benefits that these moves promise to poor countries.

Poor countries' own protectionism is a far larger obstacle to their trade than is rich countries' protectionism. Tariff rates in developing countries average 13 percent, compared to 3 percent in developed countries. Even looking only at agricultural goods, developing countries' average tariff rates are higher (18 percent) than those of developed countries (14 percent).*

Countries that clog their harbors with boulders will gain little when other countries' harbors are cleared.

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

* Jagdish Bhagwati and Arvind Panagariya, “Wanted: Jubilee 2010 Against Protectionism”:
http://www.columbia.edu/~ap2231/Policy%20Papers/Jubilee%202010-rev-Dec31-01.pdf