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Up Is Down

Here’s a letter that I sent last Friday to the New York Times:

Paul Krugman confusedly argues that stock prices are falling, in part, because the global economy is booming ("The Sum of Some Fears," July 27).  He asserts that investors now believe that this global boom will keep oil prices high, and he assumes that high oil prices are a significant drag on the value of corporations.

Even if global economic growth will continue to buoy oil prices (which isn’t certain), such growth surely puts more upward than downward pressure on stock prices.  As people worldwide earn larger incomes to spend and invest, and as global supply networks improve, prospects increase for entrepreneurial American corporations to thrive – as long, that is, as Washington resists the temptation to "protect" us from the growing world economy.

Donald J. Boudreaux

I suspect that, if the bears really are invading Wall Street, they are drawn there chiefly by the snarling protectionists now in ascendancy in Washington.