Sunday, January 3, 2010

Seen and Not Seen

After taking the month of December off from blogging, I'm back in 2010. I read a great quote recently from Frederic Bastiat who wrote a number of essays on economics and politics in the mid-1800's. Here is the quote:

"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

The State opens a road, builds a palace, straightens a street, cuts a canal, and so gives work to certain workmen - this is what is seen, but it deprives certain other workmen of work, and this is what is not seen.

When a government official spends on his own behalf one hundred sous more, this implies that a taxpayer spends on his own behalf one hundred sous less. But the spending of the government official is seen because it is done; while that of the taxpayer is not seen, because alas! he is prevented from doing it"

Our politicians are just that - politicians. They are not economists and as a result act like bad economists - only looking at what is seen. It is our responsibility as the people to let our politicians understand the unseen impacts of their policies on us. If we don't speak up, they will continue to implement short-sighted, politically motivated policies that will have many unforeseen consequences that continue to drag our economy down.

I got this quote from an excellent article by Lynn Harsh of the Evergreen Freedom Foundation. You can read the full article on page 3 of the following link:

Haute Counture Economics

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