Correcting the Record

Editor, The New York Times 620 Eighth Avenue New York , NY 10018 To the Editor: Reciting Keynesian mythology, Daniel Gross writes that "for this recovery to mature, broaden and persist, the greatest economic force known to mankind – the American consumer – has to get back in the game" (" Credit for the Recovery," Oct. 6). In fact, consumers have never been out of "the game": in the second quarter of 2010, personal consumption spending was at an all-time high of $10.46 trillion – more than 70 percent of GDP. The problem isn't inadequate consumer spending; the problem is... continue reading
Editor, The New York Times 620 Eighth Avenue New York , NY 10018 To the Editor: If Beijing doesn't further raise the value of the renminbi, Paul Krugman wants Uncle Sam to impose trade sanctions on Chinese producers ("The Renminbi Runaround," June 25). Krugman justifies his embrace of protectionism by pointing to today's high unemployment rate: by making Chinese goods less costly for Americans to buy, Beijing 's monetary policy allegedly reduces "demand for goods and services to generate the jobs we need." If Krugman is correct that access to inexpensive goods and services from abroad causes unemployment by reducing... continue reading
Editor, The New York Times 620 Eighth Avenue New York , NY 10018 To the Editor: Paul Krugman asserts that "taxes have lagged behind spending partly thanks to a deliberate political strategy, that of 'starve the beast': conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary" (" We're Not Greece," May 14). Krugman's interpretation of the facts is worse than bizarre. During the alleged ascendancy of laissez-faireism - roughly, the last 30 years - Uncle Sam's inflation-adjusted tax revenues have skyrocketed. Compared to 1980, inflation-adjusted tax revenues for... continue reading
29 March 2010 Editor, The New York Times 620 Eighth Avenue New York , NY 10018 To the Editor: Paul Krugman writes that "we used to have a workable system for avoiding financial crises, resting on a combination of government guarantees and regulation. On one side, bank deposits were insured, preventing a recurrence of the immense bank runs that were a central cause of the Great Depression" (" Punks and Plutocrats," March 28). This claim is misleading. Bank runs don't just happen; they have causes. In the 1930s those causes were serious missteps by the very institution - government -... continue reading
News Editor, WTOP Radio Washington , D.C. Dear Sir or Madam: Interviewed this morning by Bruce Alan and Mike Moss, economist Robert Shapiro explained that the "swipe fees" that credit-card issuers charge merchants each time merchants' customers pay for purchases with credit cards are reflected in the final prices of all goods and services. Indeed so. Contrary to Shapiro's allegation, however, nothing is unusual or shady about this practice; it doesn't rip-off consumers. Merchants offer consumers the option of paying with credit cards because consumers value this option. So offering this service is good for merchants' businesses. This service, alas,... continue reading
Editor, Washington Post 1150 15th St., NW Washington , DC 20071 Dear Editor: Regarding " Tens of thousands feared dead" (Jan. 14): The ultimate tragedy in Haiti isn't the earthquake; it's that country's lack of economic freedom. The earthquake simply but catastrophically revealed the inhuman consequences of this fact. Registering 7.0 on the Richter scale, the Haitian earthquake killed tens of thousands of people. But the quake that hit California 's Bay Area in 1989 was also of magnitude 7.0. It killed only 63 people. This difference is due chiefly to Americans' greater wealth. With one of the freest economies... continue reading
13 January 2010 Editor, USA Today Dear Editor: Helen Ashworth writes that "Our current economic crisis is worse than the Great Depression" (Letters, Jan. 13). She's wrong. By no measure - rate of unemployment; decline in GDP; length of the downturn; extent of human suffering - is Ms. Ashworth's claim even remotely true. Ms. Ashworth is mistaken also when she blames our current troubles on globalization. Contrary to her assertion that freer trade destroys jobs in America , the very period that she praises - the decades immediately following the Great Depression - saw steady liberalization of trade. The ever-increasing... continue reading
Editor, The Wall Street Journal 200 Liberty Street New York , NY 10281 To the Editor: You report that " Politicians Butt In at Bailed-Out GM" (Oct. 29). Most people - including opponents of bailouts - react to this news by noting that companies that ask for and receive taxpayer money must be held accountable to taxpayers. This reaction is mistaken. While corporations on the public dole SHOULD be accountable to taxpayers, Congressional oversight of subsidized companies does not promote such accountability. Because, as your report makes clear, politicians are accountable to special-interest groups rather than to the general public,... continue reading
Dear Editor: Harold Meyerson reveals a weak grasp of economics when he laments that "Manufacturing now employs just one in 10 American workers; the vast majority of new jobs in recent decades has come in the service and retail sectors, which tend not to be as productive and don't pay as well" (" Recovering the New Deal Ideal," Oct. 7). The low proportion of workers employed in manufacturing results from the same phenomenon that causes manufacturing wages to be high: high productivity. Equipped with lots of very productive machinery, each manufacturing worker today produces such large quantities of valuable output... continue reading
Editor, Washington Post 1150 15th St., NW Washington , DC 20071 Dear Editor: E.J. Dionne suggests that only "antigovernment ideologues" doubt that "If governments around the world, including our own, had not acted aggressively - and had not spent piles of money - a very bad economic situation would have become cataclysmic" (" Why We Didn't Crash," August 24). He's mistaken. Earlier this year three Nobel laureates along with nearly 350 other professional economists - employed by institutions such as Carnegie Mellon, Columbia, Cornell, Duke, Harvard, Johns Hopkins, Northwestern, NYU, Penn, Rutgers, UCLA, and the National Bureau of Economic Research... continue reading