Market Correction

7 November 2007

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

To the Editor:

You unnecessarily weaken your case for the US-Peru free-trade agreement by conceding that Americans' wages are stagnating ("Pass the Peruvian F.T.A.," November 7). They are not.

In his recent study of data on wages and incomes, Minneapolis Fed Senior Economist Terry Fitzgerald finds "that labor income per hour for middle America has not stagnated. Rather, the economic compensation for work for middle Americans has risen significantly over the past 30 years."*

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

* Terry J. Fitzgerald, “Has Middle America Stagnated? A Closer Look at Hourly Wages,” The Region, Federal Reserve Bank of Minneapolis, September 2007.
Available on line at:
http://www.minneapolisfed.org/pubs/region/07-09/wages.cfm

6 November 2007

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

To the Editor:

Kelly Kennedy approvingly quotes Oliver Wendell Holmes, Jr.'s assertion that "Taxes are what we pay for a civilized society" (Letters, November 6). But Holmes was mistaken. Civilization progresses as it reduces resort to centralized direction and force and instead develops institutions, such as private property and markets, that increase the possibilities for productive, creative, and peaceful cooperation among individuals.

As Cato Institute president Ed Crane rightly remarks, "Taxes are actually the price we pay for our failure to create a civil society."

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

5 November 2007

Editor, WSJ.com
200 Liberty Street
New York, NY 10281

To the Editor:

Were your organization run by friars reincarnated from the dark ages - or by today's editors of The Nation - I could understand your "Question of the Day" - which, today, is "How much do home prices in your neighborhood need to fall before they are fair?" But surely you’ve progressed beyond believing that fair prices are something other than those terms voluntarily agreed to by buyers and sellers.

And surely you also understand that there is nothing at all unfair about the current owner of a home choosing not to sell that home at any price that he, for whatever reason, regards as too low.

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

5 November 2007

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

To the Editor:

Paul Krugman correctly notes that former New York Governor Al Smith staunchly criticized F.D.R. and the New Deal ("Wobbled by Wealth?" November 5). Krugman is also correct that H.L. Mencken once said about Smith that "His association with the rich has apparently wobbled him and changed him. He has become a golf player." But your readers should never suppose that Mencken was defending Roosevelt. Soon after F.D.R. took office, Mencken grew to despise the man and his policies. Mencken said about F.D.R. that "If he became convinced tomorrow that coming out for cannibalism would get him the votes he sorely needs, he would begin fattening a missionary in the White House backyard come Wednesday."

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

4 November 2007

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

To the Editor:

Michael Pollan details how politicians wheel, deal, and dissemble when they craft agricultural legislation ("Weed It and Reap," November 4). And on the same page, Maureen Dowd concludes her column on Hillary Clinton's duplicity by noting about this power-craving cauldron of arrogant ambition that "There is nowhere she won’t go, so long as it gets her where she wants to be" ("Gift of Gall").

Reading of the behavior of these very smart megalomaniacs reminds me of Schiller's description of Goethe: "the personification of a well-calculated system of unbounded selfishness." Schiller added that "Men should not tolerate such a being near them."

Indeed. So why do we tolerate such people exercising power over us?

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

3 November 2007

Editor, The Washington Times

To the Editor:

Ken Adelman rightly notes that foreign investment is good for the American economy ("Foreign investment counsel," November 3). Such investment improves worker productivity, thus increasing outputs and wages.

But Mr. Adelman overlooks the greatest benefit of foreign investment, namely, it promotes peace. Economists Solomon Polachek and Carlos Seiglie find that freer trade and greater foreign investment between any two countries make those countries less likely to go to war with each other.*

This happy effect reflects some ancient business maxims: don't kill your customers; don't shoot your suppliers; don't destroy your own capital.

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

* http://papers.ssrn.com/sol3/papers.cfm?abstract_id=915360

2 November 2007

Editor, The Baltimore Sun

To the Editor:

You again call upon government to force us Americans to reduce our emissions of CO2 ("Green and right," November 2). And like nearly everyone else demanding further regulation of markets in the name of environmental protection, you overlook the fact that the very markets you want to restrain save millions of lives annually by making people's living environments cleaner.

For evidence, read Margo Thorning's essay that appears today just inches from your own editorial. In "Ending energy poverty," Ms. Thorning reports that "About 1.3 million people - mostly women and children - die prematurely every year because of exposure to indoor air pollution from burning biomass for fuel." These deaths happen routinely in developing countries because people there have so little access to electrification, internal-combustion engines, and mass-produced consumer goods that they must burn biomass in their homes. So in developed countries – whose denizens enjoy ready access to electric heating, home delivery of fuel oil, and other life-saving wonders - the capitalism that people loudly fear might raise global temperatures a few degrees over the next several decades silently yet effectively saves thousands of lives each and every day.

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

1 November 2007

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

To the Editor:

Your readers identify genuine flaws in Arthur Brooks's argument that inequality of incomes in America is counteracted by near-equality of "happiness" (Letters, November 1). The unhappy fact is that "happiness research" is a smorgasbord of foolishness.

Nevertheless, measures of inequality of incomes do indeed vastly overstate the inequality of material living standards. Nearly all Americans enjoy easy access to the likes of microwave ovens, cell phones, the Internet, and MP3 players, as well as, of course, to food, clothing, and shelter. So the differences separating the super-rich from ordinary folks are increasingly abstract and invisible. I'm told that, say, David Koch has billions more dollars in his bank account than I have in mine, but I never see his bank statements. The fact is, Mr. Koch is no better fed, clothed, or coiffed than I am. And when he walks down the street, Mr. Koch's immense wealth does little to distinguish him from the many middle-class Americans who walk past him - all unaware that his portfolio is unusually hefty.

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

31 October 2007

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

To the Editor:

Michele Tronconi and Bill Lakin of the European Apparel and Textile Organization support free trade as long as it also is "fair" (Letters, October 31). Believe me, it isn't because today is Halloween that I'm spooked by use of the word "fair" to modify "free trade." Advocates of "fair trade" invariably are protectionists trying to hide their true, ugly colors.

"Fair traders” deserve to be greeted with no less skepticism than we would have for "fair speechers" who proclaim their support of free speech as long as it is also "fair speech" - or for "fair religionists" who support freedom of religion as long as it is exercised "fairly" - or for "fair pressers" who support a free press as long as it is also a "fair press."

People the world over deserve free trade, unmodified.

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

30 October 2007

Editor, The Baltimore Sun

To the Editor:

Challenging the finding that wait-times in Canada for medical care are longer than in the U.S., Drs. Michael Hochman and David Himmelstein assert that "research supports the opposite conclusion" ("Say yes to national health care," October 30). These authors' definition of "opposite conclusion" is the opposite of my own.

Hochman and Himmelstein admit that wait times in Canada are indeed longer than in the U.S., but then dismiss this fact by pointing out that "the waits in Canada are a result of Canada's low level of health spending." This argument is akin to insisting, say, that the Congolese are as materially wealthy as Americans once you account for the fact that far less productive investment per capita is made in Congo than in America.

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

29 October 2007

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

To the Editor:

You allege that Intel is guilty of "abuse of market power to protect [its] monopoly" ("F.T.C. Goes AWOL," October 29). Sounds terrible - until we read that Intel's offense is to offer "big discounts and rebates to computer makers who minimize the use of processors made by rival Advanced Micro Devices." In other words, to keep customers, Intel keeps its prices low.

Monopolists RAISE prices; firms facing competition do not. Intel keeps its prices low, meaning that it behaves competitively. Yes, Intel's pricing practices make life more difficult for AMD and other rivals, but that's what competition is supposed to do.

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

27 October 2007

Editor, The Washington Times

To the Editor:

John Lillpop is offended that anyone suggests that President Bush's visit to charred southern California is a mere publicity stunt (Letters, October 27).

Publicity stunt or not, I have deeper questions about the common practice of high-ranking politicians visiting disaster scenes. What does it say about Americans that we draw comfort from visits of a Governor or a President? Are we so dependent upon the state that we can't get our lives back to normal unless government is involved? Is our vision of heads of states so distorted that we perceive them to be demigods whose touch or even presence strengthens our powers and enriches our lives? It's unsettling to witness the cult of personality that surrounds nearly all politicians above the level of sewer-board members.

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