Posted tagged ‘Frédéric Bastiat’

Hurricane Irma: Credentialed Ignorance vs. Uncredentialed Intelligence.

October 5, 2017

 

The credentialed ignorance of NY Federal Reserve president William Dudley is revealed by Evelyn’s uncredentialed intelligence. Evelyn quotes Henry Hazlitt, Frederic Bastiat, and Thomas Sowell to make her economic argument that the destruction by hurricane Irma is ‘the broken window fallacy’ on a much larger scale.  Fed president William Dudley seems to think the destruction by hurricane Irma will improve the economy. I bet William Dudley has never read anything written by Hazlitt, Bastiat or Sowell.

INTELLIGENCE.

Here is Evelyn’s short video about the Broken Window Fallacy.

IGNORANCE.

Now watch the credentialed ignorance exhibited by NY Federal Reserve President William Dudley in this CNBC interview (click here).

If we believe the economic ignorance of William Dudley we would think that Puerto Rico’s $73 billion debt problem (read here) will magically go away because the island was almost destroyed by hurricane Maria. I bet the people of Puerto Rico don’t realize how lucky they were that Maria hit them directly.

CONCLUSION

You don’t need an economics degree to understand economics. But I think you need an economics degree in order to become ignorant about economics.

 

By the way. Evelyn uses one of my favorite Thomas Sowell quotes: “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first rule of politics is to disregard the first lesson of economics.

 

Related ArticleHurricane Sandy And The Broken Window Fallacy, at austrianaddict.com.

Related ArticleThe Broken Window, at mises.org.

Related ArticleA Keynesians Dream; Cruise Missile Strikes In Syria. at austrianaddict.com.

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Must Reads For The Week 7/12/14

July 12, 2014
The pen is mightier than the sword...

 The pen is mightier than the sword… (Photo credit: mbshane)

Border Patrol Agents Contracting Scabies, Agent Who Speaks Out, Given Cease And Desist Order, at benswann.com. The truth about the conditions in these detention centers is what individuals higher up the Government food chain don’t want anyone to find out. “Because I stood up and told the truth they are going to terminate me and I am going to fight it” says Agent Ron Zermeno. ‘He went on to say that his bosses are more worried about their promotions and their bonuses than protecting the country’. No matter what side of this issue you are on, can we all agree that politicians and bureaucrats in Government have made a complete mess of the situation because politics trumps logic and reason.

ER Use Skyrocketing With Obamacare, by Ed Morrissey, at hotair.com. Once again the unintended (or possibly intended) consequences of Government intervention in the free market rear their ugly head. Prices coordinate supply and demand. but when Government policies incentivise demand and constrain supply, well you figure it out.

The New US Tax Form, at zerohedge.com. This is supposed to be a bit of humor,but the question has to be asked: if individuals in the IRS don’t have to comply with the law, why would anyone expect the rest of us to comply with the law? The break down of the rule of law happens incrementally over a long period of time, and then at some point the marginal straw finally breaks the camels back.

Finally A Loss For Socialist Kshama Sawant In Seattle, at economicpolicyjournal.com. Do Uber and Lyft realize this is just an incremental step toward more Gov. control, and not a win for the free market. Here is an excerpt, “There will be no cap on the number of for-hire drivers: We have deregulated a highly regulated monopoly,” Seattle Mayor Ed Murray said. It should be noted, though, that this step is far from a complete free market step. UberX and Lyft will now be part of a new government created cartel, that will limit others from entering the Seattle taxi industry. The city will only issue 200 new taxi licenses over the next four years. Taxi and for-hire drivers will see their licenses “transfer into a property right” on the order of New York’s valuable taxi medallions.” This reminds me of the analogy Walter E. Williams uses, This is like someone who comes into your yard, rips out your tulips and plants roses, and then gets you to argue the merits of tulips vs. roses, instead of you telling him he had no right to rip out your tulips in the first place.

Canada Pulls The Plug On Delayed Keystone XL Pipeline: Will Instead Send Oil To Asia Via A New Pipeline, by Mark J. Perry, at aie-ideas.org. How many jobs did the President sacrificed at the altar of radical environmentalism. These lost jobs are the unseen consequences that are results of every Government intervention. The benefit of the jobs and wealth that would be created out weighs the risk, not a guarantee, just a minimal risk of a possible environmental problem. The environmentalists are not willing to trade-off any amount of risk, no matter how small, for any amount of economic gain, no matter how big.

Yet Another Leak In The Establishment Ship, by Chris Rossini, at economicpolicyjournal.com. This information age brought about by technological innovation that couldn’t have been imagined 15 years ago,  is starting to over take the status quo propaganda outlets of the Government central planning crowd. News papers and TV news have been in decline for years. Now Hollywood’s influence along with the education monopoly are loosing their hold. As the article says, “this is a positive sign for liberty”.

Freedom Summed Up In One Image, at zerohedge.com. When I saw this sign, I thought it was parody from The Onion. This sign shows how people in positions of power will wield it, to try to control everything you do. They are smarter than you!

Leaving Illinois For Texas, by Mark J. Perry, at aei-ideas.org. Another example of unintended consequences of Government intervention. People are leaving States when the cost of regulation and taxes gets too high. People on the margin leave, and the with the next round of regulations the next group of people on the margin will leave, (as long as there is a lower cost place to escape to).

When Steelers Steal, by Christopher Westley, at mises.org. This is our heavy lifting for the day. Bastiat talked about ‘that which is seen, and that which is not seen’. This article shows the history of the steel industry through the lens of unseen consequences. Government intervention doesn’t happen in a vacuum. The affects of the intervention are like the expanding ripples from a rock being tossed into a pond.

A Typical Day For Southwest Airlines, at economicpolicyjournal.com. This is just Southwest Airlines shown on this time lapse video. What do the skies look like if all planes from all airlines were shown? Well here it is, A Day In The Life Of Air Traffic Over The United States.

45 Perfectly Timed Photographs, at induldged.com. These are outstanding. I saw this at angryid.wordpress.com.

perfectly-times-photos-37

What Is Seen And What Is Not Seen.

May 15, 2014

File:Astronomer.svg

Frederic Bastiat was an economist in France during the mid 1800’s. His essay, That Which Is Seed and That Which Is Not Seen, starts like this: “In the economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us if they are foreseen. Between a good economist and a bad economist this constitutes the whole difference……the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.”

SEEN AND UNSEEN CONSEQUENCES OF FOOD STAMPS

I read this article titled, American Dependency (And The Third Day Of The Month Effect), by Rory of  The Daily Coin at zerohedge.com, about the growing number of people, {almost 50 million} on food stamps, and Bastiats essay immediately came to mind. What is seen is the supposed benevolence of politicians and bureaucrats helping hungry people get food for their survival. What is not seen is the abuse of the system by people who don’t need assistance but take it any way, and also what happens on the retail, whole sale, and administrative side of this equation.

Must See Video!

UNSEEN INCENTIVES FOR THE CONSUMER AND PRODUCER

Under this program people who qualify are able to use their debit card to purchase things other than food, like cigarettes, booze, and lottery tickets. They can also sell these cards for cash to fund other purchases. People who qualify for the food stamps, but don’t need them, can use the money they would have spent on food every month to purchase anything they want. The woman in the video paid $9,000 for breast implants while she was getting $700 a month in food stamps.

Grocery stores and convenient stores are benefiting because of the increase in sales brought about by the food stamp program. The Snack Food Association, and the American Beverage Association represent whole sale companies like Coke, Frito Lay, Pepsi, Sunny Delite, and Nestle to name a few. These associations lobby Government for the food stamp program to offer as many choices to the consumer as possible, which of course means these companies products. JP Morgan Chase makes millions being the administrator of the debit cards used for this program. I’m sure big agricultural companies lobby for this program just like they lobby for ethanol mandates.

This is what happens when “good” politicians {bad economists} pursue a small present good”. The unforeseen incentives that are created, unleash a chain of actions that increase the demand for the Government program. The consumers, the suppliers, and the Government administers of the program all have a similar incentive, which is to grow the program.  When there is a pile of tax payer dollars to be spent, the line of people who are trying cash in stretches for miles. The food stamp program is welfare for people and companies at every level.

CONSUMPTION PAID FOR WITH COUNTERFEIT MONEY

Food stamps are just another way our Government counterfeits money. The “dollars” on these debit cards are just numbers put into a person’s account by a key stroke on a computer. Since the Government borrows 40 cents of every dollar it spends, 40% of the numbers printed into these accounts don’t exist. The government will eventually borrow the money, the Fed will purchase the debt using electronically printed counterfeit money, the Fed will continually roll over the debt when it comes due, and you and I will pay for 60% of this consumption through direct taxation, and the other 40% through the hidden tax of inflation. When do we pass the point of no return, or have we already passed it?

 

Observations From The Margin

September 2, 2013
Observation Tower

Observation  (Photo credit: mooglet)

– Why is the administration so worried about civilians being killed in Syria, when it wasn’t worried about the civilians being killed in Afghanistan, Pakistan, and Yemen by our drone strikes? Would the President have been ok with Assad if he had killed the same amount of civilians with drone strikes?

– The President is going to congress to seek authorization for the use of force in Syria for three reasons that I can see. 1) If congress doesn’t give him authorization, he can use it as a reason not to go in. It would essentially be his get out of jail free card from the “crossing the red line” jail of his own making. 2) If congress passes a resolution of force, “he” is no longer out on a limb by himself, if “we” attack and it doesn’t workout. 3) The length of time it will take to get this authorization (congress is back in session Sept. 9th), will put this issue so far in the rear view mirror, it will be “old news”. All of these give the president plenty of political cover, and that’s the most important thing to a politician.

– Thomas Sowell uses a term, “thinking beyond stage one”, Frederic Bastiat uses, “that which is seen, and that which is not seen”, when talking about the unintended consequences of a particular action. When it comes foreign policy, I don’t think the administration sees the long-term consequences of their stage one thinking.

– Why would you put off the implementation of something as wonderful as Obamacare, unless its implementation wouldn’t be so wonderful for you politically.

– Do the fast food workers who went on strike for higher wages from their employers realize they are angry at the wrong group of people. They shouldn’t be angry at their employers, they should be angry at consumers for not being willing to pay a higher price. The consumer ultimately pays the worker’s salary, and has no obligation to consume the same amount at the higher price. Remember when the cost of anything goes up, there will be less of that activity, and labor is no exception.

– I think the President should appoint a member of The Lavender Hill Mob, as the next Federal Reserve Chairman.

– When people get upset that congress is taking another recess, or the President is taking another vacation or playing another round of golf, instead of working; I always tell them we would be better off, and it would be less expensive, if we paid them double and sent them on a paid vacation for the duration of their terms. They couldn’t intervene into our lives, and we would be just fine.

– Minority children are usually helped the most by school voucher programs. The Justice Department is trying to block the Louisiana school voucher program, on the grounds that some of these students are in districts that remain under desegregation orders, and these vouchers would impede the desegregation process. Real children’s futures sacrificed to an imaginary God.

– I don’t understand all the hand wringing about concussions in football. I figured out concussions were probably a bad thing when I was playing 8th grade football. I tried to tackle, or I couldn’t get out of the way of, a guy who out weighed me by 50 pounds. I saw the flash of light when we collided, or when he ran over me, and I knew that wasn’t good. Every one knows the risks of playing football, and each person weighs these risks against the benefits and either keeps playing or quits playing.

Hurricane Sandy and the Broken Window Fallacy.

November 2, 2012

The economic ignorance of “experts” is demonstrated in the aftermath of Hurricane Sandy. The fallacy that it will be good for the economy because it will create jobs, is trotted out every time a natural disaster hits. The economy as a whole is less wealthy because of a disaster, because everything that is destroyed has to be replaced just to get back to even par.Scarce resources, capital, labor, and time that could have been used for new production, has to be used to rebuild or replace what was destroyed. How long will it take for a country like Japan to get back to where they were before the tsunami hit? We have to reteach the broken window fallacy every time a natural disaster hits.

Go to the Broken Window Reader by Daniel J. Sanchez at Mises.org for more videos and articles. Then read this in-depth analysis, The Broken-Window Fallacy by Robert P. Murphy also on Mises.org.