Market Correction

10 December 2007

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

Dear Editor:

Although insisting that Uncle Sam's current cotton-subsidy program is disgraceful, Jimmy Carter can't bring himself to call for its abolition ("Harvest of Misery," December 10). He asserts that, because West African farmers can produce cotton at less than a third of the cost of producing cotton in the U.S., "American farmers do need protection in the international marketplace."

Why? What moral or economic principle justifies Uncle Sam picking the pockets of most Americans (consumers and taxpayers) in order to line the pockets of some Americans (cotton farmers)?

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

9 December 2007

The Editor, The Economist
25 St James's Street
London SW1A 1HG
United Kingdom

SIR:

I'm disappointed to read in your Leader "The end of cheap food" (December 8) a line unworthy of your great tradition and name. You proclaim that "Dearer food has the capacity to do enormous good and enormous harm." Harm, yes. But good?

You're correct, of course, that higher food prices raise returns to agricultural work (which indeed is good for farmers). But would you insist also that, say, earthquakes do enormous good as well as harm? These disasters raise returns to those who work in, and who supply, the building and medical trades. Alternatively, would you worry that an invention that allowed a single farmer to feed the world from a single flowerpot would do harm as well as good? Do you not see that economic growth consists in producing today's goods and services with fewer and fewer resources so that not only are the prices of these outputs lowered, but resources are made available to produce things that would otherwise be too costly?

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

8 December 2007

Editor, The Baltimore Sun

To the Editor:

Labor-union official Valerie Long asserts that office-cleaning jobs "have to be filled by someone" (Letters, December 8). This mistaken belief misleads many persons, including Ms. Long, to suppose that employers have no choice but to pay statutorily imposed higher wages.

In fact, no job must be filled. Each worker is hired only when an employer gains more from hiring that worker than it costs that employer to make the hire. Even for high-priority tasks, such as keeping office buildings clean and smoothly operating, employers can substitute machines and other technologies for workers. For historical evidence, Ms. Long might explore how a hike in the minimum-wage prompted building owners in the 1960s to speed up their substitution of automatic elevators for manual ones operated by low-skilled workers.

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

7 December 2007

Ms. Stacey Nickens
Meharry Medical College

Dear Ms. Nickens:

A genuine public-health crisis is one that threatens to inflict illnesses upon persons against their wishes and despite their choices. An example of such a crisis would be an epidemic of avian flu.

So contrary to your broadcast e-mail, "death and injury due to failure to use seatbelts" is not a public-health crisis. Many people might not use seatbelts. And failure to use this safety device undoubtedly increases one's risk of being seriously injured in an automobile accident. But no one catches against his or her will a failure to buckle up. Nor does my neighbor's failure to use his seatbelt make my seatbelts less reliable. If there's any real "crisis" regarding seatbelt use it's the suffocating swarm of busybodies trying to alarm the public to support further government restrictions upon individual freedom.

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

7 December 2007

Editor, The Baltimore Sun

To the Editor:

Thomas Schaller favorably quotes economist Joseph Stiglitz's concern that "Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion" ("On economy, GOP candidates offer up slogans instead of solutions," December 5).

Regardless of this debt's merits or demerits, what is the relevance of creditors' nationalities? Whether the creditors are in Utah or Ukraine, Baltimore or Beijing, the debt must be repaid. And THAT is the burden of the debt; the nationalities of creditors are irrelevant.

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

6 December 2007

Editor, USA Today

To the Editor:

Rep. Eric Cantor is correct that raising taxes on private equity firms is neither necessary nor appropriate for fixing the alternative minimum tax ("Opposing view: Don't hike partnership taxes," December 6). The reason, however, is more fundamental than the fact that such firms benefit ordinary Americans.

Not indexed for inflation, the AMT was never meant to tax the millions of Americans that it will now tax if Congress doesn't fix it. In other words, taxing people in this way is a mistake. What ethical argument justifies Congress shifting the costs of its mistake onto others? If Jones mistakenly budgeted to spend dollars that he wrongly thought would come to him from Smith, is Jones entitled then to take this amount of dollars from Williams in order to "pay for" correcting his error?

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

5 December 2007

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

To the Editor:

Thomas Letchfield says that "The case for requiring everyone to buy health insurance is the same as that for requiring motorcyclists to wear helmets - society, i.e., taxpayers, pays for whatever health care may be needed, and for however long" (Letters, December 5).

Indeed. But Mr. Letchfield seems unaware of the perversity of this fact. Government's core role (as economists inelegantly say) is to internalize externalities. It is to stop Jones from imposing costs on Smith without Smith's consent. But in practice government creates externalities. Only by forcing taxpayer Smith to cover Jones's medical and retirement expenses is Jones able to impose costs on Smith without Smith's consent. In short, government externalizes internalities - and then demands yet more power to "fix" these problems that government itself creates.

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

4 December 2007

Editor, Financial Times

To the Editor:

Hillary Clinton needs a language lesson. She favors only trade that is found by government to "benefit[] our workers and our economy" and that promotes "rising standards of living across the world" ("Clinton doubts benefits of Doha revival," December 2). She then asserts that "There is nothing protectionist about this."

Oh please.

Protectionism exists whenever, wherever, and whyever government artificially raises its citizens' costs of buying imports. Protectionism has forever rested on the false notion that government officials know best how consumers should spend their money. And it attempts today to hide its ugly face behind the smiling mask of allegedly noble intentions, such as those mouthed by Sen. Clinton.

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

4 December 2007

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

To the Editor:

Opposed to privatizing first-class mail delivery, Edwin Andrews asks "How do you suppose rural locations will be served by a company"that is interested solely in the bottom line?” (Letters, December 4).

Is this question serious? Firms in the private sector earn higher profits the better they are at discovering cost-effective ways of meeting consumer demands. For example, Wal-Mart got its successful start by creatively figuring out how to serve small-town America. Especially as the costs of communication and transportation continue to fall, the false notion that folks living in rural areas would not be served by private mail deliverers should be stamped out.

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

3 December 2007

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

Dear Editor:

You solidly document that all of the leading Democratic presidential candidates are leveling charges against NAFTA that are ridiculous in the extreme ("Trade Distortions," December 3). You also rightly accuse these candidates of pandering to acute economic ignorance.

Given these would-be national "leaders'" displays of what is either profligate lying or gross stupidity, remind me why you trust them to take greater control over health-care provision in America. Or, more generally, why you typically argue that such elected officials can be relied upon to promote the greater good.

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

30 November 2007

Editor, The New York Post

To the Editor:

Skip Evans claims that "the most important factor in the growth of wealth and its spread since 1800" was slavery (Letters, November 30). Preposterous.

If slavery is a chief source of prosperity, why did the non-slave, industrialized, and prosperous American north defeat the slave-owning, agricultural, and poorer American south in the Civil War? Why is the last country in the Americas to abolish slavery - Brazil (which had slavery until 1888) - much poorer than the U.S. and Canada which abolished slavery much earlier?

Slavery has scarred most of human history until the rise of industrial capitalism. Far from slavery promoting capitalism, capitalism abolished slavery.

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

29 November 2007

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

Dear Editor:

Charles Lane exposes Hugo Chavez's tyrannical motive for building the new "socialist" city of Caribia ("Chavez"s Vision in the Hills," November 29). Mr. Lane also correctly notes that such brutal schemes often find legitimacy in allegedly deep ideas dreamed up by shallow western intellectuals. The (let us call it) shallow-"deep" idea in play here is "high modernism" which has, as Mr. Lane says, "an aesthetic sense that prefers straight lines and right angles to the crooked pathways and sprawling gardens of spontaneous rural development."

The famous critic of urban "sprawl" Lewis Mumford would applaud Caribia. Mumford was distressed that when he looked down upon cities such as London and New York from an airplane he saw only "sprawl and shapelessness." So for intellectuals such as Mumford, because the shapes of cities as seen from the clouds appear to be untidy and intellectually unsatisfying, these intellectuals assume that reality is faulty and must be corrected by grand, central plans. How childishly arrogant.

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

27 November 2007

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

To the Editor:

Paul Krugman continues his drumbeat message that ordinary Americans are stagnating economically ("Winter of Our Discontent," November 26). But data that he frequently cites (especially from economists Thomas Piketty and Emmanuel Saez) are not of real flesh-and-blood persons through time; they are of statistical categories such as deciles or quintiles of income earners. Changing demographics and movements of persons from quintile to quintile mask potentially huge changes in the underlying reality.

Sure enough, recent data from the IRS that are of real-life persons reveal that ordinary Americans are prospering. Economist Thomas Sowell summarizes some germane revelations of these data: "People in the bottom fifth of income-tax filers in 1996 saw their incomes rise 91 percent by 2005. The top 1 percent ... saw their incomes decline a whopping 26 percent. Meanwhile, the average taxpayers' real income rose 24 percent between 1996 and 2005."*

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

* http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071123/COMMENTARY07/111230045&template=printart

27 November 2007

Editor, The Washington Times

To the Editor:

Carl Henn asserts that "Congress can . . . react in ways that protect our long-term interest, while marketplaces can't, due to the tyranny of short-term monetary pressures" (Letters, November 27). Mr. Henn mistakes imagination for reality.

Although imperfect, markets routinely take the long-run view. The reason is that assets and firms designed for long, productive lives generally have higher values today than do assets designed only with tomorrow in mind. If, for example, Southwest Airlines were tyrannized by short-term monetary pressures, it would never spend hundreds of millions of dollars buying a fleet of 737 jets.

Where short-term pressures truly reign tyrannically is in politics. An elected officials' time horizon extends no further than the next election. If spending money today will buy votes, experience shows that such spending will occur regardless of its long-term wisdom. I challenge Mr. Henn to defend the federal budget as being a shining example of long-term planning for the greater good.

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

26 November 2007

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

To the Editor:

Paul Krugman now alleges that in 1998 "Wages were rising, yet inflation was low, so the purchasing power of workers’ take-home pay was steadily improving" ("Winter of Our Discontent," November 26). Yet in October 2005 Mr. Krugman lamented that "it has been a generation since most American workers could count on sharing in the nation's economic growth. America is a much richer country than it was 30 years ago, but since the early 1970's the hourly wage of the typical worker has barely kept up with inflation" ("The Big Squeeze," October 17, 2005).

Which is it? Did workers' wages rise for at least some years during the Clinton era, or did they stagnate?

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

26 November 2007

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

To the Editor:

Today, Paul Krugman writes that in 1998 "Wages were rising, yet inflation was low, so the purchasing power of workers’ take-home pay was steadily improving" ("Winter of Our Discontent," November 26). Yet in 2005 Mr. Krugman lamented that "Working families have seen little if any progress over the past 30 years. Adjusted for inflation, the income of the median family . . . rose only 22 percent from 1973 to 2003, and much of that gain was the result of wives' entering the paid labor force or working longer hours, not rising wages" ("Losing Our Country," June 10, 2005).

Which is it?

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