Market Correction

5 November 2006

Editor, The Atlanta Journal-Constitution

Dear Editor:

How ironic that Cynthia Tucker mentions "Enlightenment ideals" in the same column in which she asserts that globalization is "a more insidious force" than al-Qaeda ("U.S. economy's downhill slide picks up speed," November 5). Forget her unenlightened disregard of facts - such as her suggestion that home-ownership is increasingly out of reach for Americans. (In fact, the percent of Americans owning their own home now is at an all-time high.) She embraces two antedeluvian attitudes that are rejected by enlightened thinkers: tribalism and superstition.

Globalization is opposed chiefly by tribalists and by those who cling to the absurd superstition that commerce with people living in different parts of the world is dangerous.

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

4 November 2006

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

Dear Editor:

Uwe Reinhardt suggests that, because soldiers in the voluntary military come mostly from working-class backgrounds, wealthier Americans escape the costs of war ("Kerry Trips Over an Economic Truth," November 4). Not so. Soldiers today must be paid market wages for their services. These wages are paid by taxpayers, who are overwhelmingly in middle- and upper-income groups. A taxpayer with no children in the military no more escapes the costs of war than does a taxpayer with no children on the police force escape the costs of local policing.

Now if it's argued that taxpayers don’t feel these costs sufficiently sharply to cause them to question the merits of a war - an argument for which I have much sympathy - then the problem is not the voluntary army. The problem is dangerously dysfunctional government.

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

3 November 2006

Editor, The Boston Globe

Dear Editor:

For months we've been warned that the current economic recovery differs ominously from past recoveries because worker pay now is rising more slowly than worker productivity. But in today's paper we read that "Growth in productivity - the key ingredient for rising living standards - skidded to a standstill in the late summer while workers' wages and benefits shot up at the fastest clip in more than two decades" ("Pay outpaces productivity: inflation feared," Nov. 3). In other words, workers' pay is catching up with their productivity, just as economics predicts.

Economies are long-run processes; they should be evaluated as such. What happens in any arbitrary time period - a month, a quarter, or even a year - typically is too filled with short-run distortions and lags to present a reliable picture of an economy's long-run trajectory.

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

2 November 2006

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

To the Editor:

Bob Herbert, rightly horrified by the abuses that women suffer in countries such as Pakistan and Ethiopia, demands that we "do something about it" ("Punished for Being Female," November 2).

But the best thing we can do for women is not to have "activists" cry out "for our consciousness to be raised." Instead, it is to encourage the continuing expansion of global markets. As Helen Rahman, a close observer of Bangladesh, says of women working in third-world factories, "The income the women earn gives them social status and bargaining power."* In the long-run, it's far better for women to enjoy genuine opportunity and wealth than to be the cause du jour for western "activists."

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

* Quoted in Martin Wolf, Why Globalization Works (New Haven: Yale University Press, 2004), p. 185.

31 October 2006

Editor, The Boston Globe

Dear Editor:

You rightly demand that Uncle Sam stop subsidizing cotton growers ("Cotton-picking subsidies," October 31). But you mistakenly suppose that ending these subsidies will noticeably improve the lives of ordinary people in cotton-growing African countries.

The four African countries whose representatives recently met with U.S. officials to plead for an end to our subsidies - Benin, Burkina Faso, Chad, and Mali - are among the most poorly governed and least-free nations on earth. Each of these governments inflict on their own citizens trade and other economic burdens whose ill effects swamp those of Uncle Sam's agricultural policies.

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

30 October 2006

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

Dear Editor:

Asserting that foreign steel producers are subsidized by their governments, Andrew Sharkey argues that Uncle Sam must artificially raise the price that Americans pay for imported steel (Letters, October 30). This argument fails.

The only plausible case for preventing consumers from accepting a gift of low-cost steel from foreigners is if such subsidies threaten to oblige us to pay higher, monopoly prices in the future. But the likelihood of this outcome is minuscule. As Mr. Sharkey says, subsidies encourage excess capacity. So for as long as the subsidies continue, we enjoy steel on the cheap. And if and when the subsidies stop, the excess coke ovens, blast furnaces, and other steel-making equipment don't dissolve into thin air. They'll be around to ensure that steel is supplied competitively.

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

29 October 2006

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

Dear Editor:

Dick Armey speculates about why the GOP broke its promise to rein in government ("Where We Went Wrong," October 29).

My colleagues, the Nobel economist James Buchanan and his collaborator Gordon Tullock, aren't surprised by the GOP's sorry performance. They explain that, because the benefits of most government programs (say, tariffs on sugar) are concentrated on a relatively small handful of persons (sugar farmers) while the costs are spread over hundreds of millions of persons (sugar consumers), elected officials are soaked in incentives to gratify concentrated interests and to ignore the general interest. And this flaw is only one of many that afflict politics.

Expecting politicians to elevate the public interest over their own individual interests and those of the special interests that inevitably haunt government lobbies is as realistic as expecting lions to sing lullabies to zebras.

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