Market Correction

3 August 2008

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

Dear Editor:

In "McCain's Problem Isn't His Tactics. It's GOP Ideas." (August 3), Greg Anrig portrays the past 30 years as a period of radically shrinking government and galloping laissez faire. Gee. Methinks he mistakes Ronald Reagan's rhetoric for reality.

In inflation-adjusted dollars, Uncle Sam's budget is now 110 percent larger than it was in 1980, the year of Reagan’s election. U.S. population since 1980 grew by only 33 percent. Although some useful deregulation has occurred during this time, the problem is hardly a retreat of government; it is, rather, government's continued insidious intrusion into ever more aspects of our lives - and, despite cuts in marginal tax rates, its continued growth. As Milton Friedman wisely pointed out, "If you cut taxes and revenues go up, you haven't cut taxes enough."

Revenues have gone up. So tax cuts have been inadequate.

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

3 August 2008

Editor, New York Post

Dear Editor:

You favorably quote an analyst's assertion that "motorists are getting hosed" because prices at the pump have not fallen enough recently to reflect the latest fall in oil prices ("Oil Drop Brings No Relief to the Pump," August 3).

Despite your seemingly supportive accompanying graph, this assertion is questionable.

First, according to the figures in your own graph, oil prices today are 55 percent higher than in late September of 2007 (the starting date in your graph), while gasoline prices today are 57.7 percent higher. As evidence of hosing goes, these figures are very weak indeed.

Second, if we take a longer time horizon, evidence of hosing disappears completely. In 2004, for example, a gallon of gasoline retailed for about $2.00 while a barrel of oil sold for about $33. Today, oil's price is higher by 275 percent while gasoline's price is higher by only 100 percent.
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Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

3 August 2008

Editor, Baltimore Sun

Dear Editor:

Brad Heavner says that "drilling off our coasts would have no significant impact on gasoline prices - not in the short term, not in the long term, not ever" (Letters, August 3). If so, then Mr. Heavner is mistaken to worry that such drilling would "increase our dependence on oil and produce more global warming pollution," for any such impact would also be insignificant. An amount of oil that would affect prices only inconsequentially is an amount of oil that would affect global warming and Americans' use of oil only inconsequentially.

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

2 August 2008

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

To the Editor:

Gertrude Schaffner and Charles Bell want more "public investment" because "Over the last several years, we’ve seen evidence of infrastructure and service failure all around us: eroding levees, collapsing bridges, overcrowded classrooms, schools badly in need of repair, and outdated and inadequate mass transit" (Letters, August 2).

It's more than a tad mysterious that people such as Ms. Schaffner and Mr. Bell trust the same agency that produced these failures - government - to remedy them. And not only to remedy these problems that allegedly lie at the core of government's responsibilities, but also to cure unemployment, improve medical care, and raise "low pay."

Indeed, persons such as Ms. Schaffner and Mr. Bell are guided not so much by trust as by an utterly naive and futile faith.

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

1 August 2008

Editor, DailyBreeze.com

Dear Editor:

Barack Obama proposes to deal with rising gasoline prices by giving a $1,000 "emergency rebate" to consumers - a rebate to be paid for by taxing the so-called "windfall profits" of oil producers.

In other words, a critical part of Sen. Obama's strategy for reigning in high gasoline prices is to subsidize gasoline consumption and more heavily tax its production. This plan - which increases the demand for gasoline and reduces its supply - makes as much sense as trying to put out a fire by dowsing it with jet fuel.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

1 August 2008

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

To the Editor:

Disagreeing with your claim that the Federal Communications Commission ruling in the Janet Jackson/Super Bowl case was an arbitrary assault on freedom of expression, Barry Fitzsimmons mysteriously finds comfort in the fact that government policy is that "our public airwaves are to be used in the interest, convenience and necessity of the public" (Letters, August 1). How does this regrettable fact justify government oversight of private expression?

Make no mistake: this fact is regrettable. To see why, imagine if all newsprint and ink were owned by government and leased to newspapers and magazines. Imagine further that official policy regarding the print media was governed not by the First Amendment but by the proclamation that "our newsprint and ink are to be used in the interest, convenience, and necessity of the public." Finally, suppose that these glorious words were enforced by the Federal Print Commission. Would anyone pretend that America then would have a truly free press?

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

31 July 2008

News Editor, WTOP Radio
Washington, DC

Dear Sir or Madam:

Were I news anchor Shawn Anderson, I would not have responded "Absolutely!" to the caller who asserted that "We Americans must restore our faith in government." Instead, I would have said: "Trusting government does indeed require faith, for such trust can be justified neither by reason nor by the empirical record. It's absurd to suppose that a few hundred megalomaniacal strangers primping beneath a marble dome in Washington are interested enough in the lives of us 300 million Americans AND knowledgeable enough about each of our unique histories, desires, and abilities to do us much good. Faith in the reliability and goodness of government is no more sensible than is faith in annual visitations by Santa Claus.”

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

31 July 2008

Editor, New York Post

Dear Editor:

Jacob Sullum exposes the hypocrisy of Sen. Harry Reid who, like nearly all of his colleagues, buys himself high office with the currency of good intentions drawn on taxpayers' bank accounts ("Apple Pie Pork," July 31).

So H.L. Mencken was not quite right when he wrote about idealism that "Men get into trouble by taking their visions and hallucinations too seriously." This is true for most of us. But politicians - pursuing their dangerous hallucinations with other people's money and lives - achieve power and glory for themselves while they get the rest of us into trouble.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030
™©

30 July 2008

News Editor, WTOP Radio
Washington, DC

Dear Sir or Madam:

Anchor Bruce Alan today reported on a study by the Economic Policy Institute. This study allegedly finds (as Mr. Alan reported) that U.S. trade with China since 2001 has "eliminated" 2.3 million jobs in America. Sounds bad, for it sounds as if trade with China caused a net reduction in paid jobs in America of 2.3 million.

But a check of the study at EPI's website reveals that the 2.3 million figure is not of net job losses. It includes "lost" jobs whose workers have found employment elsewhere.* That is, the figure ignores job creation. To be sure, EPI - an organization skeptical of trade - uses language designed to create the impression that foreign trade is causing Americans to become mired in unemployment. The facts even it reports, however, do not support that impression.

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

* http://www.epi.org/content.cfm/bp219

30 July 2008

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

Dear Editor:

Re Michael Crowley's “Stevens's Payback Moment” (July 30): I'm delighted to see Sen. Ted Stevens face jail time for his crimes while in office. To charge him with concealing gifts totaling $250,000, however, is the equivalent of charging a confessed mass murderer with jaywalking. If that's the only way to bring the criminal to justice, fine. But Sen. Stevens's most significant misdeeds - ones of which he boasts! - are his decades-long success at directing billions of taxpayer dollars to special-interest groups for no reason other than the fact that he possessed the power and position to buy himself even greater security in office by doing so.

Of course, punishing all the criminals guilty of THAT offense would depopulate Capitol Hill.

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

30 July 2008

Editor, Baltimore Sun

Dear Editor:

Distressed at high oil prices, Tom Moriarty writes that "Uncertainty distorts supply and demand" ("Supply, demand and uncertainty: a modest proposal for oil consumers," July 30). Not so. Uncertainty certainly is reflected BY supply and demand - as when greater uncertainty over stability in the Middle East raises today's demand to build up oil inventories. The resulting higher price usefully signals to consumers and producers that oil's supply is indeed not as reliable as it would be in a more stable world. This higher price also prompts consumers to conserve and producers to search out alternatives.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030