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Comment on the Commentary of the Day by Donald J Comment on the Commentary of the Day by Donald J. Boudreaux Chairman, Department of Economics George Mason University [email protected] http://www.cafehayek.com Disclaimer: The following “Letters to the Editor” were sent to the respective publications on the dates indicated. Some were printed but many were not. The original articles that are being commented on may or may not be available on the internet and may require registration or subscription to access if they are. Some of the original articles are syndicated and therefore may have appeared in other publications also. 5 October 2008 insist that FDR's policies policies "ravaged the cured the economy's ills. requisite confidence." Editor, Washington Post The truth is, as economist [Robert Higgs, 1150 15th St., NW Peter Fearon wrote in "Depression, War, and Washington, DC 20071 1987, that "Perhaps the Cold War" (New York: New Deal's greatest failure Oxford University Press, Dear Editor: lay in its inability to 2006), p. 8] generate the revival in Rep. Rahm Emanuel says private investment that that "FDR inherited a would have led to greater depression and gave output and more jobs." America the greatest [Peter Fearon, "War, expansion of the middle Prosperity and Depression: class it has ever known" The U.S. Economy 1917- (Letters, October 5). This 45" (Lawrence, KS: claim is patently false. University Press of Kansas, 1987), p. 208] Even persons with even Economist Robert Higgs just a passing knowledge adds that "The willingness of history know that the of business people to American economy was in invest requires a depression for all of the sufficiently healthy state of 1930s. So it's mysterious 'business confidence,'" - that so many people still and FDR's New Deal 5 October 2008 best path to personal gain, 4 October 2008 then "greed" will indeed Editor, Boston Globe lead people to act Mr. Scott Simon, Host destructively. In either Dear Editor: Weekend Edition case, though, it is the National Public Radio institutions and their William Leach is correct: accompanying incentives, arguments for income Dear Editor: rather than "greed," that "redistribution" typically explain economic reality. rest on nothing more firm John Lithgow is a fine than highly subjective actor, but he should spare 3 October 2008 assessments by Jones of us his facile explanation of what Smith "needs" or the current financial turmoil Editor, Vanity Fair "doesn't need" (Letters, (Weekend Edition, Oct. 4). October 5). Saying that "greed" caused Dear Editor: today's problems is like If such assessments truly saying that gravity caused Despite being a Nobel justify "redistribution," why the death of someone laureate in economics, start with monetary wealth? pushed from the top floor Joseph Stiglitz needs a Far better first to of the Empire State refresher course in basic redistribute political power. building. Some things are trade theory. He's simply Such power - unlike wealth sufficiently constant in mistaken to assert that an in market economies - is human affairs - and self- expanding trade deficit secured from voters who interest, even greed, is would "force the U.S. to have little incentive or among them - that they continue borrowing ability to wisely assess explain nothing. gargantuan sums from what they receive in return abroad, making us even for their votes. I believe "Greed" certainly can be more indebted" ("Reversal that neither John McCain unleashed to do harm, but of Fortune," November nor Barack Obama needs it can also be harnessed to 2008). the power that one of them do good. Any compelling will soon acquire. The explanation of economic Not a single dollar earned same is true of Members of problems must take by foreigners who supply Congress, high-level "greed" as a given while imports to Americans need bureaucrats, and identifying the specific be borrowed back from governors: they neither incentives provided by these foreigners by need nor deserve the prevailing social Americans. Americans power they possess. institutions. If these CAN borrow these dollars institutions make serving from foreigners, of course. Let's redistribute this power the needs of others the But John Doe in Denver or widely and more equally, to best path to personal gain, Jane Roe in Roanoke (or the masses, so that then "greed" is harnessed Uncle Sam in Washington) America is rid of for human betterment. But is no more "forced" to unconscionable and if these institutions make borrow back the dollars socially destabilizing predating on others - either they spend buying oil from concentrations of power. through force or fraud - the Sheik Faisal in the middle east than they are "forced" Dear Editor: to borrow back the dollars http://www.cnn.com/2008/P they spend buying beef Members of Congress from OLITICS/09/29/miron.bailo from rancher Frank in the both sides of the aisle are ut/index.html Midwest. confidently predicting an economic calamity if the 1 October 2008 2 October 2008 bailout package isn't passed ("Senate passes Editor, Washington Post Friends, rescue; House in doubt," 1150 15th St., NW October 2). From where Washington, DC 20071 The 2nd edition of the does this confidence Concise Encyclopedia of come? Most of these Dear Editor: Economics ("CEE") is now people have proven track on-line. Editor David records as economic Harold Meyerson joins the Henderson, along with ignoramuses and as chorus of pundits chanting Econlib webmaster Lauren political opportunists. that the turmoil in credit Landsburg -- and, indeed, markets signals "the the entire staff at Liberty For example, in today's collapse of laissez faire" Fund -- have done a Wall Street Journal Reps. ("Slow Rise for a New Era," remarkably fine job. Barney Frank and Maxine October 1). Waters, along with Featuring contributions Senators Chuck Schumer The American Heritage from the likes of Armen and Chris Dodd, are Dictionary defines "laissez Alchian, Gary Becker, quoted as saying publicly faire" as "An economic Avinash Dixit, Claudia in 2003 that concerns over doctrine that opposes Goldin, Greg Mankiw, the soundness of Fannie governmental regulation of Sheldon Richman, and Mae and Freddie Mac are or interference in Paul Romer -- not to unjustified - that, in Rep. commerce beyond the mention GMU scholars Frank's words, "we see minimum necessary for a such as Pete Boettke, entities that are free-enterprise system to Bryan Caplan, Tom fundamentally sound operate according to its Hazlett, and Russ Roberts financially." Given the own economic laws." No -- the CEE will prove to be foolishness of these one who examines the an accessible and judgments, can you explain American economy in indispensable resource. why Americans should now general, or credit markets trust politicians' claims that in particular, can truthfully Here's the link: a bailout is necessary? conclude that laissez faire has reigned in recent http://www.econlib.org/libra 1 October 2008 years. Indeed, were Mr. ry/CEEAuthors.html Meyerson to read George Friends, Will's column appearing 2 October 2008 beside his own in today's Harvard's Jeff Miron edition of your paper, he'd Editor, The Washington speaks especially clearly get a partial list of the Times: and forcefully against any many government bailout: interventions that have paved the way to this crisis government officials seek ("A Vote Against As my colleague Richard office, not truth - and that Rashness," October 1). Wagner points out, success at their venal markets aren't intoxicated endeavor too often entails To blame this crisis on by large flows of capital per not merely ignoring sound laissez faire is akin to se. Such bubblicious economics but positively blaming the death of a drunkenness results from fleeing from it as if it were a heroin junkie on exercise, capital that is politically fast-expanding cloud of eating right, and sobriety. supplied and directed - just anthrax spores. the sort of capital promised 30 September 2008 by the bailout plan. 29 September 2008 Editor, The New York 30 September 2008 Editor, Washington Post Times 1150 15th St., NW 229 West 43rd St. Editor, The Wall Street Washington, DC 20071 New York, NY 10036 Journal 200 Liberty Street Dear Editor: To the Editor: New York, NY 10281 Fareed Zakaria is right: Deeply upset that the To the Editor: Sarah Palin's answer to a House of Representatives question about the voted against the bailout V. Nagarajan suggests that economy "is nonsense - a plan, David Brooks writes the financial turmoil on vapid emptying out of that "We're living in an age Wall Street combines with every catchphrase about when a vast excess of the fact that most winners economics that came into capital sloshes around the of the Nobel Prize in her head" ("Bow Out, world fueling cycles of Economics are American Governor," Sept. 29). He’s bubble and bust. When the to reveal that economics is right also that she's unfit to capital floods into a sector a discipline unworthy of be entrusted with the or economy, it washes Nobelity (Letters, power of the modern away sober business September 30). presidency. practices, and habits of discipline and self-denial" While some laureates are But Mr. Zakaria is wrong to ("Revolt of the Nihilists," indeed undeserving of suppose that these traits September 30). such high distinction, Mr. separate Gov. Palin from Nagarajan's presumption other candidates for high So, pray tell, how will a that Uncle Sam's economic political office. Calls by massive government policies are fashioned after Senators McCain and bailout of persons who the advice of distinguished Obama for cracking down behaved imprudently - a economists is unwarranted. on "speculators" are bailout inevitably injecting One of America's greatest classic instances of hundreds of billions of economists is my wrongheaded dollars of additional paper colleague James catchphrases, as is Sen.
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