Rational Irrationality
12 May 2007
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
My colleague Bryan Caplan clearly explains that economic ignorance is political manure: it fertilizes the growth of ugly policies that choke our freedoms and drain our prosperity ("Special-Interest Secret," May 12).
I here emphasize a point deserving more attention than Bryan could give it in his op-ed. People have harmful preferences about public policies largely because each voter gets to express his or her political opinion free of charge. Because no single vote will swing an election, the personal cost to each voter of voting stupidly is zero. In short, unlike in private markets, in the political arena it is rational for each of us to be irrational.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
The Economist's Question Is: As Compared to What?
11 May 2007
The Editor, Business Week
Dear Editor:
Surely your reporters can muster more than token skepticism of the popular delusion that businesses hurt poor people by making credit more readily available to them ("The Poverty Business," May 21). While example can be piled atop example of borrowers who today are "trapped" by debt, your reporters instead should ask "what's the alternative?" Were poor persons in the past who had less access to credit better off than poor persons today who enjoy greater access? Is being trapped by poverty with little hope for credit better than having ready options for securing loans?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
How Times Quickly Change
11 May 2007
The Editor, Harper's
Dear Editor:
Alleging that the dollar is "overvalued," Dean Baker describes this situation as a "calamity" ("The Economy," June). Some calamity.
The higher the dollar's value on foreign-exchange markets, the more it buys - meaning higher real wages for American workers. But if Mr. Baker truly feels burdened by possessing currency with high purchasing power, I'll be delighted to rescue him from his calamitous wealth: he can give me all of his dollars and, in exchange, I will give him the same nominal amount of monopoly money.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Free Trade, Unilaterally
9 May 2007
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Robert Samuelson argues that free trade benefits Americans only when foreign governments practice free trade ("China's Trade Time Bomb," May 9). Not so. The case for free trade rests on the recognition that prosperity is enhanced by permitting consumers to spend their money as they choose. When foreign firms are subsidized, those subsidies (while they hurt foreign taxpayers and foreign economies) benefit American consumers and the American economy just as surely as when the attractive prices and qualities of foreign products result from foreign-producers' comparative advantage.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Note the Presumption
8 May 2007
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
According to E.J. Dionne, Nicolas Sarkozy's call to deregulate French labor markets offered mere "clarity" while Segolene Royal's opposite message was muddled but "well-meaning" ("Progressives' French Lesson," May 8).
Why imply that persons who advocate freer labor markets don't mean well? Whether correct or not, there's a coherent case that freer labor markets generally help workers. If M. Sarkozy accepts this case, then he, too, was well-meaning on the subject of French labor markets.
Mr. Dionne is mistaken to suggest that support for freer labor markets reflects frosty apathy toward workers.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Free to Choose, Truly.
7 May 2007
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
The key sentence in Walter Zadan's anti-free-trade letter is "I choose to purchase produce sold at a local farmers market - or that, at least, is grown in this country" (Letters, May 7).
Those of us who endorse free trade never insist that Mr. Zadan and those who share his tastes buy foreign-made products. The deal we offer to Mr. Zadan and his ilk is simply this: you keep your nose out of our consumption choices and we'll keep our nose out of yours.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Blinders Off
6 May 2007
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Alan Blinder worries that as technology opens up pools of low-wage labor in poor countries, the gains to American workers from free trade will be slow in coming ("Free Trade's Great, but Offshoring Rattles Me," May 6). He forgets that the world's stock of capital expands quickly to take advantage of profit opportunities.
If American workers today produce enough output to justify their high pay, any transfer of capital from America to China or India opens up profit opportunities for new investments in America. Skilled, motivated workers in a commercial environment of secure property rights will not long remain unexploited by capitalists.
Want evidence? Foreign direct investment in the U.S. from Latin America was $87.3 billion in 2004 - 114 percent higher than 1999's figure of $40.8 billion.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Who Cares WHO is Doing the Saving?
5 May 2007
Editor, The Washington Times
Dear Editor:
Economic growth requires market-driven investment, and investment requires savings. So you are right to argue that a fall in Americans' savings rate threatens to reduce the U.S. economy's growth rate ("The GDP," May 5).
But why do you often lament the U.S. trade deficit? The larger is this deficit, the greater are the amounts that foreigners invest in America. And the more that foreigners invest in America, the higher is the U.S. economy's growth rate. R&D in the U.S. funded with dollars from South Korea is just as productive as the same R&D would be were it funded with dollars from South Carolina.
If Americans truly are saving virtually nothing, we should be especially pleased that foreigners so willingly save and invest on our shores.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
