The Bailout Will Be Filmable
18 November 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Martin Feldstein and George Will each offer excellent reasons for opposing a bailout of Detroit automakers (Opinion, November 18). Here's another: resources given by government to these corporations must be taken from somewhere else. Government cannot conjure billions of dollars of resources out of thin air.
The number of different places from which these resources will be taken is large and spans a continent. So it's easy to overlook the fact that each of many productive firms from across the country will, as a result of this bailout, pay more for steel, machine tools, fuel, and other inputs they use in production. These other firms will contract their operations; they'll employ fewer workers; they'll produce less output.
The bailout might well save GM, Ford, and Chrysler. If so, politicians will celebrate it as "successful." But that success - which will be easy to see and capture on video tape - will really be an economic failure because of the resulting (if hard to see) contracted economic activities throughout the economy.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
Enterprise Hall
George Mason University
Too Big to Fail?
17 November 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Countless flaws infect the arguments - offered in your pages today by both Jeffrey Sachs and Robert Samuelson - for a government bailout of GM, Ford, and Chrysler. Not least among these flaws is the common presumption that these firms are too big to be allowed to fail.
These firms certainly are big, meaning that they use unusually large amounts of productive resources. If they have reasonable potential to put these resources to good use in the future, Chapter 11 bankruptcy will likely uncover this fact and ensure that these firms are not disassembled. But if the only way to keep these firms operating is a government bailout, then taxpayers will be subsidizing the continue employment of gargantuan quantities of productive resources in unproductive pursuits. That's a recipe for economic stagnation.
Popular sentiment has it backward: the bigger the unproductive firm, the more vital it is to let it fail.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
He's Baaack
17 November 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
So Eliot Spitzer - freshly released from charges that, were HE the prosecutor of a similarly booked Wall Street broker, he would have pressed with the vigor of Inspector Javert - is trying to reestablish his political creds ("Spitzer as Victim," November 17). One can only laugh and take comfort in H.L. Mencken's observation that "The typical politician is not only a rascal but also a jackass, so he greatly values the puerile notoriety and adulation that sensible men try to avoid."*
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030
* Marion Elizabeth Rodgers, ed., The Impossible H.L. Mencken (New York: Anchor Books, 1991), p. 66.
Book of Intellectuals
16 November 2008
Editor, The Washington Times
Dear Editor:
Challenging the myth that society would be improved if governed by "intellectuals," Thomas Sowell says that "It would be no feat to fill a big book with all the things on which intellectuals were grossly mistaken, just in the 20th century" ("'Intellectuals' are posers," November 16).
Such a book has already been filled. Paul Hollander's "Political Pilgrims" documents the gullibility, the boundless capacity for self-delusion, and the ecstatic fetish for Great Leaders displayed throughout the 20th century by large numbers of American and European intellectuals.* These Smart People cheered the Soviet Union, applauded Mao, drooled over Castro, celebrated the Sandinistas - all the while dismissing those persons suspicious of centralized power as "anti-intellectual."
Of course, consistently these "anti-intellectuals" were proven right as the heroes of the "intellectuals" were revealed to be blood-thirsty bastards. Is there reason to suppose that the "intellectual's" still-intense libido for Great Leaders and Big Plans is today any more rational than it was during the tragic episodes documented by Hollander?
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Paul Hollander, Political Pilgrims: Western Intellectuals in Search of the Good Society, 3rd ed. (New Brunswick, NJ: Transaction Publishers, 1997).
Dangerous 'Men of System'
16 November 2008
Editor, The Washington Times
Dear Editor:
Thomas Sowell nicely exposes the shallowness of what prompts the likes of New York Times columnists to revere someone as an "intellectual" ("'Intellectuals' are poseurs," November 16). By this most unintelligent criterion, an "intellectual" is anyone who believes that ordinary people form a malleable mass of humanity - a mass degenerate and wretched UNLESS its members are ordered about from the top according to grand plans formulated by do-gooders contemptuous of individual freedom. Adam Smith called such an intellectual a "man of system":
"The man of system ... is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily a
nd harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder."*
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Adam Smith, The Theory of Moral Sentiments, 6th ed. 1790. Library of Economics and Liberty:
http://www.econlib.org/library/Smith/smMS.
The quotation is found in Part IV, Section II, paragraph 42.
A Silver Lining
15 November 2008
Editor, Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
You report that "experts" worry that our economic woes are raising our risk of being attacked by terrorists ("Experts See Security Risks in Downturn," November 15). This concern is curious. The Bush administration told us that terrorists hate us because we're rich and free. Because the downturn has made us poorer and Pres. Obama will continue Pres. Bush's efforts to make us less free, I would think that our security risks are today not growing, but shrinking.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Anti-Intellectualism All Around
15 November 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Douglas Ayer correctly notes that "Populist anti-intellectualism has always played a part in conservative politics" (Letters, November 15). But contrary to the left's self-congratulatory myth, anti-intellectualism has always played a part also in so-called "liberal" politics.
What reflects thought more shallow than leftist notions such as making poor people richer by giving them money taken from richer people? Or making workers better off simply by declaring low wages illegal? Or the fantasy that politics can be cleansed of special interests? The only difference between the modern left and the modern right is that the former couch their absurdities in garb that appears intellectual to persons unwilling or unable to think, while the latter wear their stupidity openly.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Seen and Unseen
14 November 2008
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Brian Riedl is correct: economic-stimulus packages are economic snake oil ("Why Spending Stimulus Plans Fail," November 14). Because money given by government to Jones MUST be taken from Smith, Jones's extra spending is offset by Smith's reduced spending. The great 19th century French economist Frederic Bastiat explained the matter brilliantly in his essay "What Is Seen and What Is Not Seen":
"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
"Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil."*
Washington is infested with bad economists.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* This essay is available on-line here:
http://www.econlib.org/library/Bastiat/basEss1.html#Chapter%201,%20What%20Is%20Seen%20and%20What%20Is%20Not%20Seen
Oh?
13 November 2008
Editor, The New Yorker
Dear Editor:
Your November 17th cover shows the "O" in "New Yorker" as an Obama "O", rising like a radiant and beneficent moon into a peaceful night sky.
This picture is beautiful. It's also terrifying.
Even to hint that any human being possesses super-human powers - that he or she is anointed by celestial forces - that he or she reigns over the rest of us in some grander-than-human fashion - is an atavistic reflex, one that modern humanity should have progressed beyond.
Americans rightly laugh at the ridiculous things that many North Koreans believe (or are at least told) about Kim Jong-il. Let us not turn ourselves into objects of similar ridicule.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
