Market Correction

23 May 2007

Editor, New York Post

To the Editor:

I'm no fan of Jimmy Carter, but conservatives now lathered-up by the former President's criticisms of the current President need a reality check (Letters, May 23).

These conservatives forget that Carter's presidency launched the deregulation of airlines, trucking, and railroads, and that Mr. Carter appointed inflation hawk Paul Volcker as Fed Chairman.

They forget also that Bush II created an obnoxious prescription-drug entitlement program; that he expanded federal control over education; that he shamelessly raises tariffs for blatant political gain; and that he increased discretionary spending faster than did LBJ. And while many conservatives applaud the war in Iraq, not all do. George Will, for example, correctly recognizes that civil society abroad can no more be built by U.S. armed forces than civil society at home can be built by U.S. bureaucrats.

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

22 May 2007

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

To the Editor:

Matthew Slaughter compellingly explains why Americans are not hurt by the value of the Chinese yuan ("Yuan Worries," May 22). But will Senators Schumer, Graham, and other protectionists in Washington be persuaded by Mr. Slaughter's logic and evidence to stop imagining that the yuan's value justifies their harmful efforts to hamper trade between Americans and the Chinese? Alas, no.

As Will Durant lamented near the end of his massive survey of human history, "The triumph of imagination over reality is one of the humors of history."* And the diseased imaginations that power politics are especially indestructible.

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

* Will & Ariel Durant, Rousseau and Revolution (1967), p. 64.

21 May 2007

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

To the Editor:

Construing Milton Friedman's arguments with a Don-Imus-like subtlety, Paul Krugman blames the late Nobelist's opposition to government regulation for unsafe food ("Fear of Eating," May 21).

Let's see: Mr. Friedman argued that political institutions too often perform poorly. And Mr. Krugman today documents such poor performance by the FDA. Seems to me that Mr. Friedman was correct that the case for relying upon government bureaucracies to protect consumers is weak.

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

20 May 2007

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

Dear Editor:

James Mann writes that Beijing's trade policies have managed "to boost Chinese exports and depress U.S. employment and production" (“A Shining Model of Wealth Without Liberty," May 20). The facts contradict his assertion.

Chinese exports have indeed increased. But U.S. employment isn't depressed. Today's unemployment rate of 4.5 percent is lower than the average unemployment rate for the 1970s, for the 1980s, and for the 1990s. Also, U.S. output now is at an all-time high. In real terms, U.S. GDP has steadily risen in recent years; today it is a whooping 63 percent higher than it was in 1990. Even U.S. manufacturing output (with the exception of a dip in 2001-03) keeps rising: the real value of U.S. manufactured output today is 50 percent higher than it was 1990. There's no sign that these trends won't continue.

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

19 May 2007

The Editor, New Orleans Times-Picayune

To the Editor:

So Sen. Hillary Clinton - lusting for greater power and expert in spending other people's money - is in New Orleans promising even more federal largess for the Crescent City ("Sen. Clinton unveils recovery agenda for New Orleans," May 19). Beware.

New Orleans will rise and thrive chiefly on its own people's creativity and enterprise. But money from Washington will only corrupt and enfeeble New Orleanians, and restrain their spirits and abilities with countless bureaucratic dictates. Once a ward of Washington, New Orleans will likely forever remain in that degraded condition.

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

18 May 2007

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

To the Editor:

Jeff Faux asserts that recent trade deals have resulted in "more off-shoring of jobs" (Letters, May 18). He exaggerates terribly. In a new study, Jacob Funk Kirkegaard examined the causes of all layoffs in the U.S. of 50 workers or more in 2004 and 2005. He found that off-shoring is responsible for less than five percent of these job losses.*

A myth is not made true by incessant repetition.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030
703-993-1157 (office)
703-993-1133 (fax)
703-426-9299 (home)
571-426-5751 (cell)
dboudrea@gmu.edu

* http://www.iie.com/publications/interstitial.cfm?ResearchID=730

17 May 2007

News Editor, WTOP Radio
Washington, DC

Dear Editor:

Morning anchor Mike Moss proposes that the U.S. government enter the business of gasoline refining. He argues that the private sector has no incentive to build more refining capacity as long as oil-company profits are high.

Mr. Moss's economics is backwards. It implies that private firms would consistently refuse to expand outputs of MP3 players, gourmet coffee, cell phones, and other high-demand products. Firms instead would invest only where profits are low or negative - treating consumers to endless supplies of the likes of chocolate-coated olives and cardboard condoms.

In fact, of course, the profit motive drives firms to invest precisely where returns are highest -- assuming that they're not thwarted by government regulations.

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

16 May 2007

Editor, USA Today

Dear Editor:

Otis Howard complains that "senators who got millions of dollars in contributions from the pharmaceutical companies over the years should be ashamed of themselves" (Letters, May 16). Alas, blaming politicians for taking campaign contributions from parties affected by legislation is akin to blaming polar bears for eating seals: it's in the nature of both beasts to behave in these ways.

Truly shameful people are those who condone open-ended regulation by government. Officials possessing the power to destroy billions of dollars of wealth with the strokes of their pens will inevitably be feted, seduced, bribed, and otherwise lobbied by those whose wealth is at stake. Persons who expect otherwise should be ashamed of themselves.

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

15 May 2007

The Editor, The Washington Times

To the Editor:

Michael Riccards asserts that historian Jean Edward Smith "is probably quite correct" to reject the view that FDR's New Deal policies prolonged the Great Depression ("The gifted FDR," May 15). The only evidence Riccards offers to support his conclusion is that "FDR held out hope for a better world." This argument is infantile.

Economic historian Robert Higgs - who actually analyzed economic data from the period - reached a conclusion opposite from that of Smith and Riccards. Higgs found that "even if Roosevelt did help to lift the spirits of the American people in the depths of the depression - an uplift for which no compelling documentation exists - this achievement only led the public to labor under an illusion. After all, the root cause of the prevailing malaise was the continuation of the depression. Had the masses understood that the New Deal was only prolonging the depression, they would have had good reason to reject it and its vaunted leader."*

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

* http://www.fee.org/publications/the-freeman/article.asp?aid=3538

14 May 2007

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

To the Editor:

I share James Lange's disgust at environmentalists who relentlessly complain that corporate contributions to environmental causes are inadequate (Letters, May 14). In his poem "An Apology for Luxury" Voltaire addressed such shrill ingrates:

"For thee the world at work has been/That thou at ease might vent thy spleen."

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

13 May 2007

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

To the Editor:

Convinced that the economy is a shambles for all but the rich, Bob Herbert writes that "one of the biggest problems is the simple fact that so many jobs pay so little that even fulltime, year-round employment is not enough to raise a family out of poverty. One-fifth of the working men in America and 29 percent of working women are in such jobs" ("The Millions Left Out," May 12).

Mr. Herbert mistakenly implies that workers who hold such jobs today hold them for their entire careers. But as workers acquire skills they typically get raises or move to jobs with better pay. Other - mostly entry-level - workers then fill for a while the low-skill jobs these workers abandon. I'll bet that Mr. Herbert's gig as a New York Times columnist pays him much more handsomely than did his first full-time job. Why does he suppose that he's unusual?

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