Market Correction

15 January 2007

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

Dear Editor:

So lots of Americans are furious that a U.S. pizza chain permits customers to pay in pesos ("Pizza Chain Takes Pesos, and Complaints," Jan. 15). I'll bet a ton of tamales that most of these same Americans also fret about the U.S. trade deficit.

News flash: because pesos that circulate in America are not used to buy imports, this peso circulation puts downward pressure on the U.S. trade deficit.

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

14 January 2007

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

Dear Editor:

By confiscating oil-companies' private property - and, hence, making Honduras a less-attractive country in which to invest - Honduras's rulers ensure that citizens there will remain poor ("Honduras Temporarily Grabs, Exxon, Chevron Terminals," Jan. 14). But, hey, there's a silver-lining for ordinary Hondurans, at least from the perspective people such as Lou Dobbs and Sen. Sherrod Brown: less foreign investment in Honduras will lower that country's trade deficit!

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

13 January 2007

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

To the Editor:

Home Depot shareholder Gary Abraham hopes that "Congress can do something about the greed-based pay packages that have become common among publicly traded companies" (Letters, Jan. 13).

Why pray to a horde of power-greedy office-getters in Washington? Like nearly everyone in America, Mr. Abraham himself can "do something" far more direct and effective than anything Congress can do - namely, not invest in companies governed poorly and instead invest in companies governed well. On the NYSE alone he can choose from among 3,576 corporations. He can also invest in mutual funds whose managers specialize in researching companies and finding those that are likely to create value for shareholders.

Of course, if he thinks himself and others to be too incompetent to invest wisely, then why does he suppose that as voters these same people will wisely choose and monitor the politicians to whom he wants to entrust the power to dictate corporate practices?

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

11 January 2007

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

To the Editor:

David Wessel nicely surveys economists' current thinking on why so many "developing" countries aren't developing ("Why Economists Are Still Grasping for Cure to Global Poverty," Jan. 11). But he misses one crucial element: the finding - endorsed by many scholars who've examined the data - that development has been hamstrung by so-called "foreign aid" and the anti-market, western-elites-know-best mindset that accompanies it.

As the late Peter Bauer observed after decades of close study of poor countries, "Development aid is . . . not necessary to rescue poor societies from a vicious circle of poverty. Indeed, it is far more likely to keep them in that state."

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