Market Correction

11 November 2006

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

Dear Editor:

Harold Meyerson repeats the canard that "globalization entails [a] downward leveling" of economic well-being ("Tipping Point for Trade," November 11).

This belief is crushed by mountains of evidence. It's crushed also by its own illogic: if ordinary people are served by being "protected" from globalization, then they can be made even better off by being protected from countryization - and better off still by being protected from townization and neighborhoodization. Protectionist quackery implies that we achieve maximum prosperity when no one consumes anything produced by anyone else.

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

10 November 2006

Editor, Business Week

Dear Editor:

In "Can Anyone Steer This Economy?" (Nov. 20), you conclude that it is "worrisome" that "Despite federal outlays of over $125 billion for medical research over the past five years, the U.S. has a large and growing trade deficit in advanced biotech and medical goods."

You're too quick to worry over this vague statistic. Because most U.S. imports are production goods rather than consumption goods, many of the biotech and medical goods Americans import might well be used to further the research funded by Uncle Sam. That is, it's quite plausible that the source of the trade deficit in biotech and medical goods is nothing other than the federal subsidies themselves.

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

10 November 2006

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

Dear Editor:

Barbara Roper shares the World Economic Forum's opinion that America's trade deficit signals "decline in U.S. economic competitiveness" (Letters, Nov. 10). Even overlooking the inapt allusion to zero-sum sports games conjured by the phrase "economic competitiveness," Ms. Roper and the WEF simply misunderstand the trade deficit.

The U.S. trade deficit rises when foreigners invest more in America. More investment means more factories, more firms, more and better equipment, more R&D, more worker training, more opportunity for creative but cash-strapped entrepreneurs. This investment strengthens our economy. It also reveals that investors worldwide are optimistic about America's economic future.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
G