On Congressional Earmarks
26 April 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Mayors Dannel P. Malloy, Robert Duffy, and Mark Mallory plead that Congressional earmarks serve worthwhile purposes, such as reducing crime ("'Earmarks' by Another Name: Democracy," April 26). But the marquis statistic that they boast to support their case is disingenuous. The mayors write that Operation Streetsweeper - an 11-year-old law-enforcement program in Manchester, NH, funded with Congressional earmarks - "was cited as one reason that violent crime in Manchester dropped 17 percent from the first half of 2006 to the first half of 2007."
Changes in violent-crime rates over a single year prove nothing. Consider that violent crime in Manchester ROSE by 26 percent from 2002 to 2003, and then by another 21 percent between 2003 and 2004. After falling 16 percent in 2005, it rose again, by one percent, in 2006. Manchester's violent-crime rate today is about 14 percent HIGHER than it was when Operation Streetsweeper was launched in 1997.
If they say anything at all about Operation Streetsweeper, these more complete statistics suggest that this earmark is a complete waste.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Textbook Consequence of Rent-Control
(HT to my friend Roger Meiners for alerting me to this news story.)
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24 April 2008
Editor, The San Francisco Chronicle
Dear Editor:
Representing a tenant whose landlord tried to persuade him to move by making his apartment uninhabitable, attorney J. Scott Weaver wonders "why would a landlord do that? Why would a landlord cut open his floor? It was a big hole...." ("S.F. landlords charged with tenant terror," April 24).
The answer is San Francisco's rent-control ordinance. The Rent Ordinance restricts landlords' ability to raise rents for existing tenants but (as stated in Section 4.15 of the Rent Ordinance) "does not regulate initial rent levels for a new tenancy." Such regulation is an ideal recipe for making landlords hostile to long-time tenants. It's a perverse system that gives suppliers an active interest in alienating regular customers.
The landlord's actions in this case are entirely predictable.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
What?! Me a Protectionist?!!?
23 April 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
For sake of argument, pretend that Sen. Sherrod Brown is correct that America's trade deficit is worrisome ("Don't Call Me a Protectionist," April 23). It still doesn't follow that shielding American producers from foreign competitors will solve the underlying misfortune - which would be Americans' (including Uncle Sam's) profligate spending and corresponding failure to save.
Rather than improve these spending habits, restricting Americans' freedom to buy foreign-made products will simply shift our profligacy inward. We will consume our own capital just as fast as before as we simultaneously cut off flows into the U.S. of investments made by more-responsible foreigners.
America's economy would be weakened by policies that increase foreigners' difficulty of earning the dollars that they now so willingly invest in the U.S.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
My Earth Day Offering
22 April 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
The chief reality hidden by Earth Day is not, as your writer argues, lack of progress in combating pollution ("Green for a Day, but Then Comes Tomorrow," April 22). Quite the opposite is true. The chief reality hidden by Earth Day is the colossal achievement of industrial capitalism at making our world cleaner and safer. This achievement, however, is overlooked because it typically advances in small steps. But consider, for example:
- automobiles, which cleaned our streets of animal droppings and the resulting swarms of filthy flies;
- air-conditioning and central heating, enabling us to keep our homes' temperatures comfortably safe and to reduce the growth of indoor mold;
- inexpensive industrial textiles, allowing us to have several changes of clean clothes;
- detergents and automatic washers and dryers, allowing us to wash (I might say "recycle") those clothes for multiple wearings.
This list could be greatly extended. The ways that capitalism has cleaned our lives are vast.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
The Pope and Lou Dobbs
22 April 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Angry that the Pope spoke out in favor of immigration during his visit to America, Lou Dobbs fulminates that "I really don't appreciate the bad manners of a guest telling me in this country and my fellow citizens what to do" ("That 'Insulting' Pope," April 22).
Memo to Mr. Dobbs: I really don't appreciate your bad-mannered habit of incessantly telling me, my family, and my friends what to do. If we want to hire - or to befriend, or to live with, or simply to enjoy as neighbors - non-Americans in our own hometowns, you rudely tell us that we should not be allowed to do so. You insult us with myth-laden bombast and uninformed accusations. The Pope, in this case, spoke out for greater freedom of association; you continue to champion obnoxious restrictions on this important freedom.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Some Straightforward Economics of Trade
21 April 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
John Engler rightly defends NAFTA against political-candidates' misrepresentations of this trade agreement ("What Nafta Trade Deficit?" April 21). But he stumbles into a common error when he asserts that much of the U.S. trade deficit is caused by U.S. imports of oil.
A trade deficit reflects decisions made by persons on BOTH sides of a border. If foreign suppliers of oil to America spent all of their dollars on goods and services produced in the U.S., Americans' imports of oil would not raise the size of the U.S. trade deficit. America's trade deficit grows not just because Americans import lots of things (including oil), but also because foreigners choose to invest their dollar earnings in the U.S. For this reason, Mr. Engler's conclusion that it would be "good" if America's trade deficit were lower is questionable. I, for one, welcome capital inflows into the U.S. Such inflows of capital not only directly fund private investments in America, but help to lower Americans' cost of financing Uncle Sam's reckless habit of spending beyond his means.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Labor's Share
20 April 2008
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Suggesting that America's middle-class is shrinking, Louis Uchitelle writes that "Once upon a time, a large number [of ordinary American workers] earned at least $20 an hour, or its inflation-adjusted equivalent, and now so many of them don't ("The Wage That Meant Middle Class," April 20).
But Mr. Uchitelle's case has several weaknesses. Here are just two. First, he speaks of wages rather than of total compensation (which includes wages AND benefits). Because benefits today make up a larger portion of total compensation than they did during the alleged golden age of the 1970s, even if a larger percentage of today's blue-collar workers earn less than $20 per hour in wages, this fact does not mean that these workers are more poorly compensated than were their counterparts of 30 years ago.
Second, if Mr. Uchitelle were correct, the data would show that workers today earn a lower share of national income than they earned in the past. The data, however, show no such thing. As Martin Feldstein found in a recent paper, "the share of national income going to employees is at approximately the same level now as it was in 1970"* - a conclusion consistent with a 2004 study by the St. Louis Fed that found worker compensation as as share of national income to have been remarkably steady (at about 70 percent) from 1948 through today.**
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* http://www.nber.org/feldstein/WAGESandPRODUCTIVITY.meetings2008.pdf
** Michael R. Pakko, Labor's Share, National Economic Trends, August 2004, St. Louis Fed.
Wal-Mart and Small-Town America
And in an unintentionally comical twist, we learn from his byline that this Mr. Stancil, from rural Michigan, is a college professor in Paris!
http://www.tnr.com/politics/story.html?id=aafd91f9-3162-4ece-892c-be78f45d1b1a
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18 April 2008
Editor, The New Republic
Dear Editor:
Jordan Stancil alleges that "rural Americans have seen their ownership of their communities hollowed out by relentless consolidation in the retail and financial sectors" ("It's the Wal-Marts, Stupid," April 18). He laments that he and his fellow thirtysomethings from rural America are "the first generation of non-owners." To support these claims, however, he offers only personal anecdotes and impressions.
Fortunately, economists Andrea Dean and Russell Sobel have investigated this oft-told tale using data. Their findings cast serious doubt on the veracity of Mr. Stancil's allegations. For example, Dean and Sobel find that the five U.S. states with the greatest number of Wal-Mart stores per-capita have a self-employment rate identical to the self-employment rate in the five states with the fewest Wal-Mart stores per-capita. And in those states enjoying a high density of Wal-Marts, the number of businesses with nine or fewer employees is HIGHER per-capita than in those states with a low-density of Wal-Marts. Dean and Sobel conclude that "Wal-Mart has had no significant impact on the overall size and growth of U.S. small business activity."*
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030
* Andrea M. Dean and Russell S. Sobel, "Has Wal-Mart Buried Mom and Pop?" Regulation, Spring 2008, Vol. 31, pp. 38-45. (The quotation in found on page 45.)
