Market Correction

6 December 2006

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

To the Editor:

The subtitle under today's front-page headline "New York Bans Most Trans Fats in Restaurants" reads "A Model for Other Cities."

A model for what, exactly? For petty tyranny? For opportunities by the petty tyrants to practice Orwellian newspeak - such as Mayor Bloomberg's declaration that the city "is not going to take away anybody’s ability to go out and have the kind of food they want"? Or perhaps for similarly inspired bans on other voluntary activities with health-risks? Why not also ban unprotected sex? Clerking in convenience stores? Walking in the rain?

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

5 December 2006

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

Dear Editor:

E.J. Dionne is correct that Senator Barack Obama and evangelical pastor Rick Warren are surprisingly alike ("Message from a Megachurch," Dec. 5). But I find this similarity disturbing, not uplifting.

Both men believe in magic. Both believe that problems can be solved by ritual - Rev. Warren puts faith in prayers uttered to god while Sen. Obama puts faith in words inscribed on paper by secular priests who preach beneath marble domes. And both men believe that responsibility for solving problems belongs ultimately to a higher conscious power, one who cares deeply for ordinary people and asks in return for its help only that people worship it.

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

4 December 2006

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

Dear Editor:

Re Sebastian Mallaby's "A Split in the GOP Tent" (Dec. 4):

I'm one of those libertarian who once felt less disgusted by Republicans than by Democrats. My reason was the same one that drew P.J. O'Rourke closer to the elephants than to the asses: Republicans had fewer ideas than Democrats. Those of us who fear political power prefer that such power, if it exists, be not in the hands of ambitious visionaries but in laps of lazy dim-wits.

But now that the GOP is flush with ideas on how to uplift society, both here and abroad, both political parties disgust me equally.

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

3 December 2006

Editor, The Boston Globe

Dear Editor:

Peter Orszag reports that "According to Yale's Jacob Hacker, the average family had a 7 percent chance in the early 1970s of seeing its income drop by half or more. By 2002, that probability rose to nearly 17 percent" ("Cool-headed, warm-hearted economics," Dec. 3).

This change might (as both Orszag and Hacker believe) be evidence that the typical American family's economic lot is worsening. But it might instead be evidence that its lot is improving. If the typical family's absolute standard of living - its ability to consume - has increased over time, then the consequences of any given fall in its income are less dire than in the past. And if suffering a fall in income brings less-dire results, more families than in the past might rationally make choices, such as quitting unpleasant jobs, that slash their money incomes for extend periods of time.

This latter possibility is not far-fetched. Economist Diana Furchgott-Roth, for example, recently found that the poorest Americans are today spending significantly more than in years past.

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

3 December 2006

The Editor, The Economist
25 St James's Street
London SW1A 1HG
United Kingdom

SIR:

You write that foreigners who buy dollar assets "finance the country's vast current-account deficit" ("The Falling Dollar," Dec. 2). By suggesting that America's current-account deficit necessarily bodes ill for Americans, your language misleads - on two counts.

First, this deficit is at least as much the RESULT of foreigners seeking to invest in the U.S. as it is of Americans importing lots of goods and services. The more attractive America becomes to investors, the more foreigners invest here. These investments expand the U.S. economy and increase the U.S. current-account deficit.

Second, only about half of America's imports are consumer goods. The rest are intermediate components, raw materials, and capital goods. In fact, capital goods today are about a quarter of all U.S. imports, up from only four percent of imports in 1960.*

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

* Douglas A. Irwin, Free Trade Under Fire, 2nd ed. (Princeton University Press, 2005), page 12.

2 December 2006

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

To the Editor:

Richard Epro is outraged that Atlantic City casinos oppose a proposed smoking ban "simply to preserve their profits" (Letters, Dec. 2).

People smoke and patronize casinos voluntarily. I'm outraged that some arrogant persons feel entitled to force the rest of us to behave according to their preferences - and thankful that the profit motive gives casinos the courage to defend individual liberty against the run-amok presumptuousness of the Richard Epros of the world.

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

1 December 2006

Editor, USA Today

Dear Editor:

Worried about the growth in foreign ownership of Uncle Sam's debt, you write that "It makes the U.S. economy hostage to the whims of foreign investors, including governments. Eventually, they could decide they have better places to invest than in U.S. debt securities. This might be a gradual decision. Or it might not be. If the latter, it would cause a surge in interest rates (because the Treasury would have to offer more enticing terms to attract buyers) and trigger a recession" ("Our view on national fiscal security: look who owns U.S. debt now," December 1).

The problem is the government-debt's size, not its holders' nationalities. To see why, suppose that all of Uncle Sam's debt were owned by Americans. You could then write: "It makes the U.S. economy hostage to the whims of domestic investors. Eventually, they could decide they have better places to invest than in U.S. debt securities. This might be a gradual decision. Or it might not be. If the latter, it would cause a surge in interest rates (because the Treasury would have to offer more enticing terms to attract buyers) and trigger a recession."

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

30 November 2006

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

Dear Editor:

Robert Samuelson is correct: "fair trade" is foolish ("'Fair Trade' Foolishness," Nov. 30).

Suppose speech were treated like trade, with pundits and politicians swearing allegiance to free speech as long as it's "fair speech." Would we not smell a pack of rats? Would we trust government with the power to prevent any speech that it finds to be peaceful and voluntary but "unfair"? Would we suppose that the quality of public discourse - and the civility of society - would be improved by government policing against "unfair speech"?

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