Market Correction

3 April 2009

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

To the Editor:

Paul Singer's case for more government regulation of financial markets has at least two flaws ("Free-Marketeers Should Welcome Some Regulation," April 3).

First, Mr. Singer ignores the possibility that errors made in the private sector - such as balance sheets leveraged too highly - were artifacts, not of too little government intervention, but of too much. Double taxation of profits combined with deductibility of interest on debt; implicit government backing of Fannie and Freddie; and (most significantly) the Fed's monopoly control over the money supply, are just some government policies that might have promoted the great bulk of the private-sector errors that Mr. Singer laments.

Second, even if today's problems are at root the fault of the market, Mr. Singer writes as if he's proposing new regulations to an apolitical and unbiased agency, one immune to interest-group pressures and to the weaknesses in human judgment that Mr. Singer himself believes contributed to the market's implosion. I dare say that no error in judgment is so dangerous as the one that leads Mr. Singer and others to regard government as being something akin to a god-like institution.

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

3 April 2009

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

To the Editor:

Amedeo Teti says that "Dumping and some state subsidies are unfair competition practices that create distortions of international competition and, in the long run, result in the establishment of dominant positions by some companies at the expense of global competition. That is why antidumping remedies have nothing to do with protectionism" (Letters, April 1).

Wrong.

First, I challenge Sig. Teti to name even a single instance - one recognized widely by scholars - in which dumping or export subsidies practiced in one country resulted in harm to consumers in other countries. Second, even if (contrary to fact) he's able to name one such instance (or even a thousand of them), it's foolish to suppose that, just because antidumping remedies might be useful against some harmful acts, these remedies won't be misused by protectionists masquerading as champions of economic efficiency.

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

31 March 2009

Mr. Barack Obama
President, Executive Branch
United States Government
Washington, DC

Dear Mr. Obama:

On your website today you write that "my administration will offer General Motors adequate working capital to continue operations for the next 60 days." Because you're a man of your word and you choose your words carefully, I trust that you mean here that you and the public servants in your administration will personally pony up the working capital for G.M.

That is, like, soooo cool!!

I'm psyched that an American president and his administration finally will help a struggling company by digging into their OWN pockets! Thank you, thank you, thank you for breaking with the capitalist/GOP/"free-market-fundamentalist" tradition of forcing me and other taxpayers to shovel money into the bank accounts of giant multinational corporations. Thanks for risking only wealth that is your own, rather than following the prescription of lazy-fairies like Milton Friedman who (I learned in my sociology classes and from reading Naomi Klein) believed that innocent taxpayers should be forced to subsidize Big Multinational Corporations.

I'm so INSPIRED that you and your teammates at the White House will give G.M. the bucks it needs - give it from your own private funds and rather than take if from from taxpayers! That's just, like, so progressive! What a change! I believe in it!

Sincerely,
Donald J. Boudreaux

30 March 2009

Editor, Baltimore Sun

Dear Editor:

Having witnessed someone - children, read no further! - "actually signaling for a ride from an unlicensed, unmarked taxi," Julia Frein is mightily disturbed that "[a]pparently these drivers are willing to risk their lives, and possibly the public's lives, by picking up people and charging lower prices than licensed and marked cabs" (Letter, March 30).

Risking people's lives by charging lower prices? Huh?

Given that you printed Ms. Frein's letter on the editorial page rather than on the comics page, I assume that you have some inkling of why she believes that greater competition among taxi drivers is dangerous. Can you please share her reasoning with those of us who are too witless to figure out how lower taxi prices pose a significant threat to life and limb?

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

29 March 2009

Editor, Newsweek

Dear Editor:

Nobel laureate Paul Krugman says that he was attracted to economics because it seemed to him to reveal "the beauty of pushing a button to solve problems" ("Obama's Nobel Headache," April 6). Alas, like all economists who mistake their theories for reality, Mr. Krugman misses far too many of the all-important nuanced and ever-changing real-world facts masked by the Greek letters that economists of Mr. Krugman's ilk use in their complex-seeming but inevitably simplistic mathematical equations.

I was attracted to economics for a reason quite the opposite of the one that appealed to Mr. Krugman, namely, because economics helps explain how incalculably complex and productive social orders emerge from billions of individual actions, where no one of these actions is meant to achieve anything more than improvement in the welfare of the individual actor. This type of economics - associated most famously with Adam Smith - teaches that it is hubris of the most extreme sort to imagine that problems can be solved by pushing buttons. Social-engineer wannabes such as Mr. Krugman might mean well, but they are dangerous; they suffer from what another Nobel laureate economist, F.A. Hayek, called "the fatal conceit."

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

27 March 2009

Editor, The New York Times
620 Eighth Avenue
New York, NY 10018

To the Editor:

A headline about New York Senator Kirsten Gillibrand reads "As Lawyer, Senator Defended Big Tobacco" (March 27). I ask: Are you capable of writing "tobacco" without prefacing it with the word "big"? Similarly, can you write "oil" without the same ominous preface?

These industries indeed are big, but each is a dwarf compared to Uncle Sam.

So why do you not routinely describe government as "big government"? The menacing overtones of such a description are especially appropriate for the state because, unlike "big tobacco" and "big oil," government uses violence against persons who refuse to fund its budget and otherwise do its bidding.

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

26 March 2009

Editor, The New York Times
620 Eighth Avenue
New York, NY 10018

To the Editor:

While in Mexico, Secretary of State Hillary Clinton will pledge U.S. help in the fight against violent Mexican drug suppliers ("Clinton Says U.S. Feeds Mexico Drug Trade," March 26).

It's interesting to reflect that when Mrs. Clinton visits France she need not pledge U.S. help in the fight against violent French wine suppliers. Or that when she visits Belgium she need not pledge help against violent Belgian chocolate suppliers. Or that when she visits Colombia she need not pledge help against violent Colombian coffee suppliers. Or that when she visits Japan she need not pledge help against violent Japanese automobile suppliers.

I detect a pattern! When goods and services can be produced, sold, and consumed legally, suppliers of these goods and services are peaceful and not violent.

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