Libertarianism

Here is an awesome letter sent to professor Krugman by Don Boudreaux:

17 May 2010

Prof. Paul Krugman
Department of Economics
Princeton University

Dear Prof. Krugman:

In your May 14 blog-post “Why Libertarianism Doesn’t Work, Part N” you attempt to tar libertarianism as being an ideology that “requires incorruptible politicians.”

You’re deeply confused.  One foundation of libertarianism is the observation that no profession is as infested with corruption as is politics.

The political ideology built upon the outlandish assumption that politicians are incorruptible and trustworthy isn’t libertarianism but, rather, your own – namely, “Progressivism.”  You and your ilk unceasingly plead for politicians to be entrusted with ever-more power and money, while libertarians – understanding that politicians aren’t saints – oppose your efforts.

Your accusing libertarianism of requiring “incorruptible politicians” makes as much sense as a faith-healer accusing science-based medicine of requiring competent witch-doctors.

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

Thoughts Out of Balance

Kurt Bouwhuis, Mackinac Center Intern

Here is a letter I recently sent to the New York Times:

In his recent op-ed, Paul Krugman expresses great concern over the growing trade deficit between the U.S. and China (“World Out of Balance,” Nov. 15).  A simple example reveals why such concerns are pointless.

Suppose an American businessman decides to trade with China.  He loads American cargo valued at $200,000 onto his ship and exports it to China.  When the ship arrives in China, he sells all of his goods for $250,000 generating a profit of $50,000.  He then uses all of his proceeds to purchase Chinese cargo valued at $250,000.  He loads the cargo onto his ship and brings it back to the U.S.  The net result of this profitable transaction is a trade deficit of $50,000 for the U.S. 

There is, however, a simple way to convert the $50,000 trade deficit into a trade surplus of $200,000 — sink the returning ship and all of its Chinese cargo in the middle of the ocean before it reaches the U.S. port – the import will be nonexistent and our trade balance will gain all that the oceans have swallowed.

Kurt Bouwhuis

Sloppy Krugman

Here’s a letter Don Boudreaux sent to the New York Times:

And these data ignore the fact that Massachusetts’s plan relies in part on subsidies from Uncle Sam.

Don
http://www.cafehayek.com/
http://marketcorrection.powerblogs.com/
…………..

24 July 2009

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

To the Editor:

I’m surprised that Paul Krugman points to Massachusetts’s three-year-old program for creating universal health-insurance coverage in that state as a model for the national level (“Costs and Compassion,” July 24).  Krugman himself admits – in a column devoted to insisting that such government plans will reduce health-care costs – that Massachusetts “is now looking for ways to help control costs.”  If Massachusetts’s experience is Mr. Krugman’s best real-world case for how such reform itself controls costs, why are legislators in that state “now looking” – three years later – “for ways to help control costs”?

But control costs they must.  A 2008 Kaiser Family Foundation study of this Massachusetts reform finds that “the costs for this program have exceeded previous estimates.  The Governor’s budget request of $869 million for 2009 is about $400 million more than that for 2008, and it is believed that this funding level may still fall short.”*  And just last month, Cato Institute scholar Michael Tanner reported that “since the program became law, insurance premiums have been increasing by 10 to 12 percent per year, nearly double the national average. On average, health insurance costs $16,897 a year for a family of four in Massachusetts, compared to $12,700 nationally. Meanwhile, total health-care spending in the state has increased by 28 percent.”**

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

* http://www.kff.org/uninsured/7777.cfm

** http://www.cato.org/pub_display.php?pub_id=10279

Interventions Breed Interventions – Bank On It

This is a great letter to the editor from Don Boudreaux:

18 July 2009

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

To the Editor:

Discussing today’s proposed increase in federal financial regulation, Paul Krugman describes “the creation of federal deposit insurance in the 1930s” as marking “the last time there was a comparable expansion of the financial safety net” (“The Joy of Sachs,” July 18).

Mr. Krugman’s history is half-baked.  U.S. bank insolvencies in the 1930s resulted from restrictions on branch banking.  Canada, which had no such restrictions, suffered not a single bank run during the Depression.  And our northern neighbor had no deposit insurance until the 1960s.  So the very safety that Mr. Krugman suggests can be, and was, created only by deposit insurance was itself earlier undermined by misguided government regulations restricting branch banking.

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