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Tuesday, March 03, 2009

Hey, Biden: The "broken window fallacy" is, um, a fallacy

... You're not supposed to treat it like it's a good idea.

The Vice President today commended the new owners of Republic Windows and Doors, a Chicago window manufacturing plant that was shuttered late last year, resulting in the lay-off of its 250 union workers. Republic was purchased in bankruptcy court last week by Serious Materials, a California-based company that makes energy efficient windows. Serious Materials has announced plans to reopen the Republic factory and to eventually rehire all 250 of its laid-off workers at their former pay levels. Serious Materials said it purchased Republic because the Recovery Act will increase demand for its products.

That which is seen, and that which is not seen, indeed.

At least the government isn't paying people to actually break windows. Yet.

H/T: Kip.

Posted by Terrence Watson on March 3, 2009 | Permalink

Comments

Of course the whole point of these stimuli is to remove the ill gotten (through evil investments and performance compensations) all of the money stored up and stagnant in the rich old CEO's bank account and re-distribute it to the poor people of noting ham through through taxes, inflation and strait forward confiscation. This of course will be legal because the majority of the people cry for action because they have no savings of their own.

This of course will fail because the truly rich don't pay taxes in general and they don't have savings to be robbed they have assets which are generally well protected.

The big bad CEOs will find ways around salary caps just as robin hood err congress found ways around laws against bribes.

Posted by: Pete | 2009-03-03 4:56:26 PM


An archaic working-class myth, Pete. The rich pay a truly staggering amount of tax, thanks to a progressive income tax system that basically punishes success and rewards failure. In a typical year, half of all income taxes collected come from the top seven percent of filers. Forty percent comes from the top three percent of filers. And twenty-six percent of the total is paid by four-fifths of one percent.

Throw in capital gains taxes, business taxes (most people this affluent own businesses), and other costs borne chiefly by the rich, and you have a very different picture from the common class-war fantasy that the rich pay zero while the poor working stiff gets slugged. It's actually the reverse.

The banks may have granted bad loans, but it was the "poor working stiff" who floated them when common sense should have told him he couldn't afford it.

Posted by: Shane Matthews | 2009-03-03 5:45:46 PM


The Obama/Biden economic plan is supposedly to dump all taxes on the top 3%(those making over $250,000). A lot of people don't seem to realize that Obama's spending plans are too big to be covered by simply taxing the rich to kingdom come. Eventually, both the middle class and upper class will have to pay for it. Second, what makes people think that upper income earners are going to just sit there and let themselves be screwed? Biden can state all he wants that higher taxes are "patriotic". However, no sane person could believe this. The supposed rich will retaliate by either hiding money in tax shelters or investing money overseas. They even may cut back on their working hours so that they fall into a lower tax bracket. If Obama and Biden feel that income redistribution is so important then why don't they have all their income for the next four years donated to charity?

Posted by: David | 2009-03-03 7:22:01 PM


TW: "At least the government isn't paying people to actually break windows. Yet."

Um, but Terry, that's the whole point of the "broken window fallacy," isn't it? What is fallacious about the broken window fallacy is precisely that you can create jobs or wealth by deliberately going out and breaking windows - that the act of breaking windows is a kind of stimulus or pump-priming.

It isn't a fallacy to say that people are better off, and therefore wealthier, if they have fixed windows rather than broken ones in their homes. Providing to people what they want, but don't yet have, at a price they are willing to pay, is precisely what makes for a wealthier society.

The fallacy in this case is to think that *subsidizing* a window-maker from taxes will increase wealth more than not subsidizing the window-maker. But that is a general point that has nothing in particular to do with the "broken window fallacy."

Posted by: Grant Brown | 2009-03-04 2:23:10 AM


Does the Standard have any Canadian writers, physically located in Canada, who are willing and able to discuss Canadian issues?

Would it not make more sense to reposition yourselves as an American blog?

I see half Canadians, non-Canadians, ostensibly Canadian writers living in the UK and USA, but I don't see any born and raised in Canada Canadians, who hold no other "emergency" passports, who have the knowledge of Canada and are invested in Canada, and who write about Canadian issues.

What do you guys pay? I have what you need: the ability and will to write about Canada and the horrible things that are happening to our (my?) country. Actually, I'd consider *paying* to have my copy posted on this blog; the quality of your commentary is so lacking it would make mine look even better in comparison

The world doesn't need another blog about American politics. The world isn't clamoring for a single-issue weed blog staffed by braindead hippie-tarian crypto-Marxists oblivious to non-marijuana issues. It most emphatically does require more writers documenting the decline and fall of the Dominion of Canada.

I have to conclude that the Standard and its writers are Marxists; you care so little about Canada that it must be construed as consent.

Here's an idea, Terrence: make an effeminate, passive aggressive comment denying everything. That would be just so original.

Posted by: fdsafdasf | 2009-03-04 8:08:20 AM


I have to conclude that the Standard and its writers are Marxists; you care so little about Canada that it must be construed as consent.
Posted by: fdsafdasf | 2009-03-04 8:08:20 AM

Actually most are former Marxists now masquerading as libertarians. Bwahahahhahaha

Posted by: The Stig | 2009-03-04 8:30:43 AM


fdasfdasf:

Since my cat just decided to jump on my keyboard and dump my longer response to you, I'll summarize:

1. What's the basis of your criticism? That we don't cover Canada enough? The "recent posts" listing currently shows 7 posts about Canada. You can ask the people who post about Ron Paul while he's significant to the broader freedom movement.

If I had to guess, I'd say at least 13 of the last 20 posts pertain to Canada, directly or indirectly.

2. We do cover American politics. Especially me. That's because (a) I find American politics more interesting, which isn't to say that Canadian politics doesn't have its moments, and (b) American politics has a big impact on Canada, like it or not.

Although it's false to say I never write about Canadian issues, as some of my longer articles on the main site deal directly with Canada.

3. If your criticism is that we're not criticizing Canada, that's just false. We've covered the human rights commissions. We've charted the decline of freedom of expression in Canada, and the Conservative abandonment of conservative principles.

We've been particularly strident in attacking Harper, mainly because he's been such a disappointment to us (I think I can speak for more than myself here.)

4. If your criticism is that we cover drug issues too much -- big deal! Other people can explain the connection between the "war on drugs" and individual liberty. If you don't accept such a connection, that's fine; but see those posts for what they are: not an endorsement of decriminalization for the sake of decriminalization, but on behalf of a greater principle.

Now what else did you have to say?

Posted by: Terrence Watson | 2009-03-04 9:17:20 AM


"[T]hat's the whole point of the "broken window fallacy," isn't it? What is fallacious about the broken window fallacy is precisely that you can create jobs or wealth by deliberately going out and breaking windows - that the act of breaking windows is a kind of stimulus or pump-priming."

No. This is a common misconception about the Broken Window Fallacy, which merely says (correctly) that it is illegitimate to judge an action exclusively by "what is seen" (i.e., a new window factory) and omit "what is not seen" (i.e., some other use of the funds that will never be undertaken because the government diverted the funds to the new window factory).

Posted by: KipEsquire | 2009-03-04 10:25:59 AM


Hey Kip,

Thanks for stopping by! Please keep up to good work. And good luck in your new endeavors!

Posted by: Terrence Watson | 2009-03-04 10:40:29 AM


Although it's false to say I never write about Canadian issues, as some of my longer articles on the main site deal directly with Canada.
Posted by: Terrence Watson | 2009-03-04 9:17:20 AM

Hey Watson. Where did the 2 posts regarding the student at the UoT go? Were they deleted for fear of upsetting muslims?

Posted by: The Stig | 2009-03-04 11:52:17 AM


Stig,

I don't know. I didn't notice them go missing. It could have been a formatting issue. Sometimes, scraps of html make it into the editor (e.g. when a person copy-pastes from another source), and that can mess up the whole blog (you know, by redefining style properties and that kind of thing.)

I've had to unpublish a post before for that reason. I doubt it was because of the reason you suggest, but I'll look into it. Thanks.

Terrence

Posted by: Terrence Watson | 2009-03-04 12:47:52 PM


I don't know. I didn't notice them go missing. It could have been a formatting issue. Sometimes, scraps of html make it into the editor (e.g. when a person copy-pastes from another source), and that can mess up the whole blog (you know, by redefining style properties and that kind of thing.)
Posted by: Terrence Watson | 2009-03-04 12:47:52 PM

No I didn't know that. Funny though that two separate posts on the same subject disappeared into the ether at the same time. Maybe it was a technical glitch, I'll withhold judgment until the reason is found though the "new" WS has clearly become apologists for muslims.

Posted by: The Stig | 2009-03-04 1:03:02 PM


Stig,

They did come from the same blogger, though, as I recall. So if there was the kind of problem I described, you might expect it to occur in both the posts.

I had nothing to do with it myself. And personally, after glancing at those stories, I didn't find either one to be particularly hostile to Muslims per se. Violent extremists, yes.

Posted by: Terrence Watson | 2009-03-04 3:05:14 PM



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