Market Correction

22 September 2007

Editor, The Washington Times

To the Editor:

Carl Henn makes two astonishing claims (Letters, Sept. 22). The first is that "our fuel of choice oil runs out at exactly the rate we use it."

According to MIT's M.A. Adelman, "At the end of 1970, non-opec countries had about 200 billion remaining in proved reserves. In the next 33 years, those countries produced 460 billion barrels and now have 209 billion 'remaining.' The producers kept using up their inventory, at a rate of about seven percent per year, and then replacing it." Over the same time period, proved reserves in opec countries have nearly doubled from 412 billion barrels to 819 barrels.* Clearly, we don't run out of oil "at the exact rate we use it."

Second, Mr. Henn avers that cars aren't important because "our country somehow got along without them for more than 200 years." Well, yes - and Americans in the past also "got along" without refrigeration, indoor plumbing, and antibiotics. Is Mr. Henn content to "get along" also without these things?

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

* M.A. Adelman, "The Real Oil Problem," Regulation, Vol 27, Spring 2004, p. 18.

18 September 2007

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

To the Editor:

Fearful of commerce with China, Peter Navarro accuses free traders of neglecting "to note the high hidden costs of Chinese mercantilism in jobs lost, a significantly weakened American economy, and rising product safety concerns" (Letters, Sept. 18),

Concerns over the safety of products from China can be addressed in the same way that we address concerns over the safety of products from Canada and elsewhere - that is, without resort to protectionism.

As for alleged lost jobs and a weak American economy: what IS Prof. Navarro talking about? Today's unemployment rate is a low 4.6 percent; a rate that low was achieved in October 1973 and not achieved again until November 1997. And today's low rate is beneath the average rate for each of the last three decades.

Also, U.S. manufacturing output, revenues, profits, and exports each hit its all-time peak in 2006. Finally, real total compensation for non-supervisory workers is today at an all-time high.

Some weakening.

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

17 September 2007

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

To the Editor:

Paul Krugman again writes as if it is unquestionably true that President Bush's fiscal irresponsibility lay in his tax cuts ("Sad Alan’s Lament," Sept. 17). The facts cast doubt on this interpretation.

In 2006, inflation-adjusted federal revenues were six percent HIGHER than they were in 2001 (the year before Mr. Bush's tax cuts began kicking in). But over this same period, inflation-adjusted federal outlays rose by more than 25 percent. The problem is not a decline in the amount of revenue being funneled to Washington. The problem - for which Mr. Bush bears much blame - is that politicians spend like drunken teenagers granted free use of their parents' credit cards.

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

16 September 2007

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

To the Editor:

Mark Lilla offers a compelling thesis in his new book, The Stillborn God: separation of state and theology is indeed as difficult to achieve as it is vital to human liberty ("The Political and the Divine," Sept. 16). But Lilla's crediting of thinkers such as Thomas Hobbes for the separation that today marks the western world overlooks important facts of history.

As Harold Berman argued in his magisterial 1983 book Law and Revolution, western Europe - unlike eastern Europe and Russia - had competing sources of sovereignty as far back as the middle ages. Manorial courts competed with church courts, royal courts, and merchant courts to determine law. Peasants could escape to independent towns and win freedom from their overlords. Popes and princes forever battled each other for supreme authority. An unintended result of this competition for power was fractured sovereignty. And up through these fractures liberty grew. Westerners learned from long experience that law can emerge decentrally, and that social order does not require Caesar and Pope to be partners.

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