Dan McLaughlin

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To Home Page Latest Newsletter Column Archives Click to get these columns for your local paper	© 2006 Daniel J. McLaughlin The Seen And The Unseen There are amazing advances in technology occurring on a daily basis. There are revolutionary ways to get things done, wonderful discoveries that enable people to live better lives. But other than the technology, those lives are really no different than the lives of men and women all throughout history. People eat, drink, sleep, love, hate, and do everything that their ancestors did. They do because they are human. The conventional wisdom is often illuminated by the wisdom of the past. When conventional wisdom ignores reality, the consequences are the same as when it was ignored in previous generations. There are many writers in the past who possessed and wrote with timeless wisdom and were subsequently forgotten by the writers of history. The punishment for forgetting their words is borne by everyone who forgets. One of those timeless, forgotten writers is Frederick Bastiat. He had many lessons to share from strife torn France of the mid 1800’s. Ignoring the lessons he gave back then had the same devastating effects as ignoring them now. One famous lesson he gave was an essay regarding what is seen versus what is unseen. The example he gave was the case of the broken window. What is seen is that the baker's window broken by the hooligan creates revenue for the glazier, work for his helpers, payments to his suppliers, and the money flows through the whole system. On surface, that is very good. The destruction of the window created work and commerce. What is not seen is that the baker could not buy a suit because he had to pay for a window. So instead of having a suit and a window, he only had a window. The clothier is denied revenue for a new suit, as are his employees, his suppliers and everyone else down the line. The destruction of wealth, whether by malicious action, by nature or by government taking can never create anything. The result will always be a reduction in the overall well being of the society. There have actually been well known economists who talk about how good the destruction of the World Trade Center was for the economy because of the jobs and commerce that have been created. That is the classic example of only looking at what is seen. What is not seen is to what productive uses the billions of dollars in cost and lost revenue might have been put if not diverted to an unbelievable disaster. American society loses massively from the destruction. Hurricane Katrina only destroyed. It may be a boon to contractors and suppliers in the building industry, and banks who loan the money, but it is not good for the economy or the people. Wealth was destroyed. The money being spent for rebuilding is being taken from other productive uses. There is no good to come from it, other than the opportunity for Americans to exhibit the brotherhood that is part of the character of this country. Government spending for any purpose, no matter how good or positive or helpful it may seem on the surface, comes only at the expense of more productive uses elsewhere. Government is very high maintenance and only a portion of the money collected actually goes to productive use in society. It is understandable that politicians would emphasize what is seen and minimize what is not seen. Voters have a tendency to support things they can have here and now. It is usually difficult to get people to comprehend the long term negative implications of here and now goodies. Buying votes is more effective when you can use something tangible and immediate. What is not understandable is that economists and economic advisors use the politician’s point of view. It is shameful that experts ignore or willfully misstate the long term consequences which are unavoidable and entirely predictable. We are living today with the unseen consequences of yesterday’s reality. The resources that were diverted by government or war or destruction in prior periods are not available to produce today’s prosperity. What we do today will determine tomorrow’s prosperity. Look around and decide for yourself if our national leaders are setting the stage for future prosperity. Unparalleled government spending and tax burden, massive debt and hobbled competitiveness of American business all have consequences that cannot be avoided. Changing direction toward future prosperity will be a difficult process, but that change would also bring about unavoidable consequences. They are consequences that will help every member of society, will fulfill the promise of America and unleash once again the spirit that made America great.
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Daniel Mclaughlin Copyright © 2006 [Daniel McLaughlin]. All rights reserved. Revised: 03/18/08

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The Seen And The Unseen

There are amazing advances in technology occurring on a daily basis. There are revolutionary ways to get things done, wonderful discoveries that enable people to live better lives. But other than the technology, those lives are really no different than the lives of men and women all throughout history. People eat, drink, sleep, love, hate, and do everything that their ancestors did. They do because they are human.

The conventional wisdom is often illuminated by the wisdom of the past. When conventional wisdom ignores reality, the consequences are the same as when it was ignored in previous generations. There are many writers in the past who possessed and wrote with timeless wisdom and were subsequently forgotten by the writers of history. The punishment for forgetting their words is borne by everyone who forgets.

One of those timeless, forgotten writers is Frederick Bastiat. He had many lessons to share from strife torn France of the mid 1800’s. Ignoring the lessons he gave back then had the same devastating effects as ignoring them now.

One famous lesson he gave was an essay regarding what is seen versus what is unseen. The example he gave was the case of the broken window. What is seen is that the baker's window broken by the hooligan creates revenue for the glazier, work for his helpers, payments to his suppliers, and the money flows through the whole system. On surface, that is very good. The destruction of the window created work and commerce.

What is not seen is that the baker could not buy a suit because he had to pay for a window. So instead of having a suit and a window, he only had a window. The clothier is denied revenue for a new suit, as are his employees, his suppliers and everyone else down the line.

The destruction of wealth, whether by malicious action, by nature or by government taking can never create anything. The result will always be a reduction in the overall well being of the society. There have actually been well known economists who talk about how good the destruction of the World Trade Center was for the economy because of the jobs and commerce that have been created. That is the classic example of only looking at what is seen. What is not seen is to what productive uses the billions of dollars in cost and lost revenue might have been put if not diverted to an unbelievable disaster. American society loses massively from the destruction.

Hurricane Katrina only destroyed. It may be a boon to contractors and suppliers in the building industry, and banks who loan the money, but it is not good for the economy or the people. Wealth was destroyed. The money being spent for rebuilding is being taken from other productive uses. There is no good to come from it, other than the opportunity for Americans to exhibit the brotherhood that is part of the character of this country.

Government spending for any purpose, no matter how good or positive or helpful it may seem on the surface, comes only at the expense of more productive uses elsewhere. Government is very high maintenance and only a portion of the money collected actually goes to productive use in society.

It is understandable that politicians would emphasize what is seen and minimize what is not seen. Voters have a tendency to support things they can have here and now. It is usually difficult to get people to comprehend the long term negative implications of here and now goodies. Buying votes is more effective when you can use something tangible and immediate.

What is not understandable is that economists and economic advisors use the politician’s point of view. It is shameful that experts ignore or willfully misstate the long term consequences which are unavoidable and entirely predictable.

We are living today with the unseen consequences of yesterday’s reality. The resources that were diverted by government or war or destruction in prior periods are not available to produce today’s prosperity. What we do today will determine tomorrow’s prosperity. Look around and decide for yourself if our national leaders are setting the stage for future prosperity. Unparalleled government spending and tax burden, massive debt and hobbled competitiveness of American business all have consequences that cannot be avoided.

Changing direction toward future prosperity will be a difficult process, but that change would also bring about unavoidable consequences. They are consequences that will help every member of society, will fulfill the promise of America and unleash once again the spirit that made America great.

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