Why Does Anyone Take These People Seriously?
16 September 2008
Sen. Bill Nelson (D-FL)
Capitol Hill
Washington, DC
Dear Sen. Nelson:
A friend forwarded to me a mass-email that you recently sent to your Florida constituents. In it, you brag about introducing legislation - the "Prepaid Calling Card Consumer Protection Act of 2008" - to "protect" consumers from what you allege to be harmful practices by merchants who sell telephone calling cards.
You identify, as a chief justification for this government intervention, "low barriers to enter the market." How curious.
Low entry barriers means that competition is especially robust. It means that merchants who cheat consumers, or who simply don't offer the best deals possible, will quickly lose customers to rivals who treat consumers better. The only way such competition will fail to work under such circumstances is if the vast majority of consumers in this market are utter imbeciles, unable to detect when they're getting ripped off or too witless to switch to competing suppliers.
Because, by introducing this bill, you obviously regard most Americans to be utter imbeciles, you surely cannot fancy that your election to the Senate is the result of a wise, or even defensible, judgment by Florida voters. These people, after all, are among those whom you regard as incapable of sensibly choosing among competing telephone calling-cards.
If you're correct about the (lack of) intelligence of ordinary Americans, then you and other members of Congress owe your political success only to what you, as revealed by your words and actions, believe to be the intractable stupidity of your fellow citizens - which prompts me to ask: Why should anyone take you seriously?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Fannie, Freddie, and Indulgent Uncle Sam
16 September 2008
Editor, The New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Like many on the political left, Bob Herbert blames Fannie's and Freddie's woes on too little government involvement in the economy ("McCain's Radical Agenda," September 16). In fact, however, pro-market economists have long warned that government was giving dangerous privileges to Fannie, Freddie, and other "government sponsored enterprises" (GSEs).
For example, in 2001 Jay Cochran (PhD, George Mason University) and Catherine England (former fellow at the Cato Institute) published a paper issuing just such a warning.* When it was published, Dr. Cochran summarized this paper's findings: "These privileges do more than just give the GSEs a funding cost advantage, they also reinforce the perception of a federal guarantee on GSE debt obligations. In order to avoid a federal bailout like the one we saw with the savings and loan industry, policymakers may want to consider a variety of alternatives, including privatization of one or more of the GSEs."
Too bad Uncle Sam ignored this advice.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030
* Jay Cochran III & Catherine England, "Neither Fish Nor Fowl: An Overview of the Big-Three Government-Sponsored Enterprises in the U.S. Housing Finance Markets" (November 2001), Mercatus Center at George Mason University. This paper is available here:
http://www.mercatus.org/PublicationDetails.aspx?id=21118
** http://gazette.gmu.edu/articles/3182/
Y-Ikes!
16 September 2008
News Editor, WAMU Radio
Washington, DD
Dear Sir or Madam:
This morning your reporter interviewed a resident of Galveston, Texas, about the effects of hurricane Ike. The person interviewed said that she went to the gasoline station before Ike hit to "top off" her tank. But she was angry to find that gasoline prices had jumped 50 cents per gallon from the day before. "It's ridiculous," this woman opined. "Ike hadn't hit yet!"
Your reporter should have immediately asked this woman: "Well, why were your topping off your tank? Ike hadn't hit yet."
Gasoline became more scarce -- more precious -- in Galveston the moment Ike's arrival became imminent. Gasoline retailers acted in anticipation of the future no more or no less than did motorists, such as your interviewee, who topped off their tanks.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
"Change" to Protect Us from Change -- and Life
15 September 2008
Editor, Pittsburgh Post-Gazette
Dear Editor:
You endorse "industrial policy," supposing that it will somehow improve the economy ("Fighting words: It's time for Obama to talk tough on the economy," September 14). You're mistaken.
By guaranteeing that certain firms, industries, and jobs will survive, government industrial policy shields these producers from competition. Thus protected, they escape the need to find greater efficiencies in production and the necessity of diligently satisfying consumer demands. And by locking up resources in politically favored industries, industrial policy makes it vastly more difficult for entrepreneurs to start new firms and to produce new products. Pioneering and creative firms, after all, inevitably threaten the existence of older firms - by competing against older firms both for consumers' dollars and for workers and capital.
The job security guaranteed by industrial policy is the security of serfs on feudal manors and not that of free and prosperous people.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Rangeling with Taxes
14 September 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Rep. Charles Rangel (D-NY) blames language barriers for his failure to pay the appropriate amount of taxes ("Going After Charlie Rangel," September 14). I empathize. I speak English, but the U.S. Tax Code and its accompanying regulations are written in Bureaucrateese. At first glance, this language resembles English. When examined, however, it is revealed to be a language all its own - a language whose vocabulary, grammar, and syntax make it impenetrable to those of us untrained in Bureaucrateese.
Truly, it is unreasonable to expect Rep. Rangel and the rest of us non-Bureaucrateese speakers to understand our tax obligations.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Markets and the Long Run
13 September 2008
Editor, New York Post
Dear Editor:
George Will's "Pension Perils" (September 13) exposes as mythical the claim that government takes a longer-run view than do private markets. If private firms behaved as do Vallejo, CA, and other municipalities that promise employees politically convenient but economically unsustainable pension benefits, their market values would plummet long before their debt obligations actually come due. Who wants to own part of a company likely to default on its debts?
The fall in market values today in anticipation of excessive payment obligations tomorrow signals current management to reform before it's too late and warns investors and suppliers (including workers) to tread with extra care when dealing with such firms. No such reliable signals exist for government operations.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Campaigns are Indeed Signals
12 September 2008
Editor, The New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Paul Krugman is correct: the McCain campaign's fabrications and half-truths say much about what a McCain administration would do ("Blizzard of Lies," Sept. 12). But an Obama administration is unlikely to be any better. Sen. Obama eloquently proclaims platitudes. He gallivants around the country to perform for adoring crowds - masses of people stirred by his mere presence and cheering his empty bromides. Because it's true, as Mr. Krugman notes, that "how a politician campaigns tells you a lot about how he or she would govern," a President Obama would be chiefly a messianic cult leader, promising miracle cures and salvation-by-the-speech - and daily coming more and more to mistake his own charisma for character, and his own rhetoric for reality.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
