Market Correction

1 January 2007

Editor, CBS Evening News

To the Editor:

So California now prohibits car insurers from using customers' zip-codes as guides to the riskiness of insuring automobiles. Your report on this legislation (Jan. 1) contained zero critical insight. By gullibly accepting the allegation that insurers use zip-codes to "discriminate" against poor people, you unwittingly endorse the notion that insurance companies knowingly sacrifice profits in order to indulge a desire to "discriminate."

Isn't it far more plausible that zip-codes are the lowest-cost source of reliable (if not perfect) information on the riskiness of different customers? If insurers had a lower-cost way of getting more nuanced and reliable information on customers' riskiness, their lust for profit would surely propel them to use it.

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

31 December 2006

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

To the Editor:

David Abraham wisely rejects protectionism as a means of helping those, such as U.S. textile workers, whom he describes as "losers in free trade" (Letters, Dec, 31).

But the very concept of "losers in free trade" is questionable. Almost no one "loses" from free trade without first winning from it. Take those U.S. textile workers. Many of the machines they work with were produced by foreign firms. Also, we Americans can buy closets full of clothing in no small part because international trade makes us so wealthy. Without trade, many of today's jobs in American textile mills would never have been created -- and those that would still have been created would pay wages far lower than are now paid in these mills.

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

30 December 2006

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

Dear Editor:

I have no reason to question Peggy Noonan's description of Gerald Ford as "lacking in vanity" ("Ford Without Tears," Dec. 30). As politicians go, Mr. Ford was probably a genuinely decent chap. But if political success doesn't turn good people into disgraceful bullies in the mold of Lyndon Johnson and Richard Nixon, it at least makes them daffy. Mr. Ford's "Whip Inflation Now" campaign - with its buttons and his request that Americans send him ten ideas on how to combat inflation - surely ranks among the most laughable skits in the burlesque called government.

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

23 December 2006

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

To the Editor:

The hand-wringing over the fact that Toyota's annual production of cars will soon surpass that of G.M. is accompanied by claims that the yen is undervalued ("Toyota is Poised to Supplant G.M. as World's Largest Carmaker," Dec. 23). While I don't question the sincerity of the disinterested researchers - such as Detroit auto executives and Rep. John Dingell (D-MI) - who advance this hypothesis, I point out that any intervention by the Bank of Japan to artificially lower the value of the yen against the dollar also artificially raises the purchasing power of dollars in Americans' pockets. In short, such intervention makes Americans richer - a consequence that Congress has long fought against with impressive ardor and skill.

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