Tuesday, March 25, 2008

A Destructive Route to Prosperity? (Butler Shaffer)

Butler Shaffer on another "expert" who is completely ignorant of Bastiat's lesson of the broken window fallacy:

So, the Wall Street Journal's Holman Jenkins believes that having the government bulldoze homes would be a way to stabilize real estate prices. My god! Doesn't anyone read Bastiat anymore? Neither is this what Schumpeter had in mind when he wrote of the processes of "creative destruction." Nor do Jenkins' opinions seem to have been informed by history: the dumping of raw milk, and the slaughter of cattle and pigs was FDR's "New Deal" response to falling prices in agriculture, a government practice rendered more obscene for having been engaged in during the Great Depression. This is akin to the nitwits who characterize a devastating hurricane or tornado as an opportunity for economic growth!

Foolishness runs in cycles, does it not? Worse yet, it seems to be the consensus of those who engage in such squirrel-cage thinking that Austrian school thinking is "unrealistic."

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