Unwise
24 August 2006
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Russ Wise wants insurance rates in Louisiana to be set by Uncle Sam (Letters, August 24).
Mr. Wise's complaint is not that current rates don't reflect the cost of supplying insurance. Instead, when he writes that "a federal agency could set rates on a more fair and equitable basis, spreading risk among tens of millions of people instead of just a few thousand," he's complaining that residents in places such as Wyoming and Vermont are not forced to subsidize insurance coverage for residents of the hurricane- and flood-prone Gulf Coast.
Contrary to his assertion, however, there's nothing fair or equitable about such forced subsidization. In fact, it would be grossly unfair and inequitable - as well as economically foolish - to force people living in places less prone to flood and wind damage to subsidize people who choose to live on the Gulf Coast.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
A Childish Fantasy
23 August 2006
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
To reduce interest-groups’ political influence, Michael Scheinberg proposes “A complete ban on lobbying by lawmakers and government officials for five years after they leave government service and a prohibition against political contributions by industry groups” (Letters, August 23).
Such a ban can’t work. Lobbying is as much a consequence as a cause of a behemoth state that takes from the politically unorganized and gives to the politically organized. To imagine that politicians who possess such power – as well as the shamelessness requisite to exercising it – will become stewards of the public interest merely by imposing formal restrictions on lobbying is a childish fantasy.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
True and False Liberalism
22 August 2006
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
E. J. Dionne explores reasons for liberalism’s poor public image (“A Wrong Turn Led to the ‘L-Word,’” August 22). One reason he overlooks is that American liberalism today, as a political philosophy, is illiberal. Focusing on outcomes (such as income “distribution”), it often ignores complex processes. Obsessed with rescuing underdogs, it finds underdogs even where none exist – and then sanctimoniously rescues people who need no rescuing.
Maurice Cranston wrote that “By definition, a liberal is a man who believes in liberty.”* Today’s “liberals” carelessly discard liberty whenever it interferes with their favorite social-engineering schemes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Maurice Cranston, Liberalism, The Encyclopedia of Philosophy (1967).
Master Plan = Master Folly
21 August 2006
Editor, New Orleans Times-Picayune
To the Editor:
William Borah unwisely calls for New Orleans to be rebuilt according to "a master plan with the force of law, a plan that the politicians as well as the citizens would be legally required to follow" (Letters, August 21).
Mr. Borah and all New Orleanians should heed the wisdom of the late Jane Jacobs, one of history's greatest students of cities. Ms. Jacobs described a city's "intricate order" as "a manifestation of the freedom of countless numbers of people to make and carry out countless plans"* - and she warned that master plans of the sort that Mr. Borah admires will only suffocate this vital source of any city's life.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Jane Jacobs, The Life and Death of Great American Cities (1961), p. 391.
I Recommend that He Read Tyler Cowen on Commercial Culture
20 August 2006
The Editor, New York Times Magazine
229 West 43rd St.
New York, NY 10036
To the Editor:
Jonathan Ceniceroz writes of Rochas clothing-designer Olivier Theyskens that his "somewhat worried and tortured gaze is emblematic of all those who envision and create fine art amid the behemoth of the corporate complex" (Letters, August 20). Boo hoo.
Rochas' corporate owners - first Wella, and then Procter & Gamble - enabled Mr. Theyskens for the past five years to enjoy substantial financial backing for his designs. Unfortunately, Mr. Theyskens' design group has consistently lost money. Does Mr. Ceniceroz believe that P&G should keep Rochas afloat simply to let Mr. Theyskens "follow, completely, his muse"? More generally, would P&G be a better corporate citizen if it kept subsidizing a money-losing clothing line that is affordable only by the hyper-rich?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
As Naive as Naive Gets
19 August 2006
Editor, Harper’s Magazine
666 Broadway
New York, NY 10012
Dear Editor:
While a handful of firms profit from war, Lewis Lapham's suggestion that war generally is good for capitalism is wildly mistaken ("Lionhearts," September 2006).
Whether war is justified or not, it enhances government's ability to confiscate private property - it devours human and non-human resources, raising the cost of labor and materials - it increases the likelihood of wage and price controls - it tempts governments to debase currencies - it lures governments to raise taxes - it spawns embargoes which cut firms off from customers and suppliers - it multiplies the chances that factories, offices, inventories, infrastructure, and supply facilities will be destroyed. At the very least, it makes the future frighteningly uncertain. For these and other reasons, war is anathema to industry and commerce.
Understanding that the capitalist ethos differs greatly from the martial ethos, Napoleon contemptuously dismissed capitalist England as "a nation of shopkeepers." His understanding of capitalism was more profound than Mr. Lapham's - even if Napoleon's estimation of the full consequences of this difference in ethos proved to be far off the mark.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Krugman Is No Economic Historian
18 August 2006
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Paul Krugman says that the years spanning the Great Depression and World War II mark "the birth of middle-class America" ("Wages, Wealth, and Prosperity," August 18). This claim is fantastically mistaken. Even a quick perusal of the history literature* shows ordinary Americans in the late 19th- and early 20th-centuries enjoying ever-greater access to such bourgeois amenities as indoor plumbing, electricity, telephony, varied diets, formal schooling, and more leisure.
And the major American businesses founded during this era - firms such as Sears & Roebuck, Montgomery Ward, F.W. Woolworth, Standard Oil, Borden's, Hershey's, Swift & Co., Coca-Cola, Ford Motor Co. - succeeded not by catering to the denizens of Park Avenue but, rather, to increasingly prosperous middle America.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* For example, Daniel Boorstin's The Americans: The Democratic Experience.
Globalization, Inequality, and War
17 August 2006
Editor, The Boston Globe
Dear Editor:
Mark LeVine ignores relevant facts in his argument that the Israeli-Hezbollah war proves that "globalization isn't working" ("Why globalization isn't working," August 17).
First, no serious thinker in the past century has claimed that freer trade is sufficient to ensure peace. More importantly, economies of middle-eastern countries, including Israel, aren't particularly free. This dearth of economic freedom strips citizens of these countries of much economic opportunity. Finally, Mr. LeVine is wrong to suggest that globalization increases income inequality. An important paper* by Columbia University economist Xavier Sala-i-Martin shows that global inequality has fallen since the 1970s - that is, as globalization has intensified.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* http://papers.nber.org/papers/w8904
"Please Command Me On How To Improve My Bottom Line."
16 August 2006
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
Dear Editor:
Robert Steinberg supports raising the minimum wage because, in his experience as a small-business owner, his costs rose unnecessarily when he "lost an employee and had to train a new employee. Any person hired at $5.15 an hour is not apt to stay very long. The employee that earns more than the minimum wage will stay longer and be more productive" (Letters, August 16).
No doubt. But as Mr. Steinberg's own comments reveal, when paying workers more than $5.15 per hour improves employers' bottom lines, employers have incentives to pay these higher wages. Surely profit-seeking firms need not await a diktat from government before taking steps to raise profits.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
