The Most Persistent Economic Fallacy of All Time!

From a lecture given by Dr. Milton Friedman in Erie, Pennsylvania (1978). This is essentially a restatement of the “parable of the broken window.” This fallacy has been known since at least 1850 when French theorist Frédéric Bastiat published a pamphlet entitled, “That Which is Seen and That Which is Not Seen.” You can read it here: It was popularized in 1946 by economist Henry Hazlitt in an important book called, “Economics in One Lesson.” It can be downloaded for free from the Foundation for Economic Education here: John Stossel has a nice little video of this fallacy under the guise of so-called “green jobs.” Watch it here: Stossel also has a great article about this fallacy under yet another guise known as “Cash for Clunkers.” Read it here: Also, a new report from Edmunds shows that it cost American taxpayers $24000 to give away $4500! From CNN Money / Fortune Magazine (17 Nov. 09): “Cash for Clunkers. It was a well-intentioned plan that was supposed to increase consumer confidence, spur fuel efficiency, jump-start the auto industry, and help create American jobs. Instead it disproportionately benefited foreign car companies, which create fewer North American jobs per auto dollar than the Detroit Three do. And sales came mostly from inventory, doing little to increase production and jobs. What’s more, by junking clunkers, the program removed many low-end vehicles from the used-car

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