Thursday, February 20, 2014

Seen and Unseen

I came across this insightful observation last week in John Mauldin's Thoughts from the Frontline blogger quoting an essay written by Frederic Bastiat in 1850, "That Which Is Seen and That Which Is Unseen".

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.
In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

I think this observation also applies in explaining the differences between Democrats and Republicans.

I have always believed that a fundamental difference between a Democrat and Republican is how they view the world. Democrats see the world in much more theoretical and idealistic terms. Republicans tend to be more practical and pragmatic in their outlook.

Democrats want policy solutions based on how they think the world should work in theory. Republicans favor policies based on how the world really works in practice.

Bastiat's essay has given me one more perspective on the difference in thinking between Republicans and Democrats.

Democrats generally confine themselves solely to visible effects.  They seem to consider only first-level effects and ignore everything else that might flow from that.  All of their focus is on what they see in front on them.  They ignore the unseen issues. Republicans, on the other hand, are considering both the immediate effects and second-level effects. The seen and the unseen.  Especially the unseen effects which should be foreseen.

Let's look at a few issues that show you what I am talking about.

Deficit spending- Democrats focus almost solely on spending more on today's needs that they see. Continuing to borrow and spend money we don't have is totally justified over what that debt will do to unseen generations in the future.

Healthcare reform- Obamacare was justified in Democrat minds in order to solve the immediate problem of uninsured Americans.  They totally ignored the fact that the solution would completely undermine the health care system for unseen millions of Americans who already were satisfied with their coverage.

Minimum wage- Democrats want to raise the minimum wage because they believe it will alleviate the poverty problem they see.  However, they totally ignore the unseen after-effects in that the minimum wage increase will undoubtedly result in long-term job losses. For example, the CBO estimates that raising the minimum wage to $10 per hour could result in the loss of 500,000 jobs by 2016.

Immigration- Democrats want to legalize millions of immigrants who have entered the United States illegally and who we see everyday around us.  However, when calling for this they totally ignore the unseen potential immigrant who has been waiting patiently in line for years to come to this country illegally.  They also don't consider the effects that amnesty will have on encouraging even greater illegal immigration in the future.

Welfare-  Democrats can't do enough to help people in need that they see.  Food stamps, housing assistance, Medicaid, long-term unemployment assistance.  It is natural to want to help people who need the help.  However, what about the unseen problem that in all of this we may also be creating a cycle of dependency?  In the end our compassion may feed the problem rather than solve it.

Abortion- A woman who is pregnant is seen and known.  An unborn baby is unseen and unknown for most Democrats. We see the life affected today with that pregnancy.  The life of that baby's future is unseen.

Gun control-  A person with a gun who uses it in a horrific crime is seen.  Democrats see that.  However, unseen are the millions of guns in the hands of law-abiding Americans as well as the thousands of crimes that may have been deterred by that fact.

My point is that it is easy to see visible effects.  They are right in front of you.  However, as Bastiat observed over a century and a half ago, we rarely see single effects, but a series of effects.  Good government policy should dictate that we should not be focusing on the seen, but on the unseen.  This is particularly the case with the unseen effects that should be foreseen.

Unfortunately, Democrats consistently seem to be only interested in what they see right in front of them.  They seem to believe we live in a simple, superficial, single dimension universe.  The fact is that our world is getting more complex everyday and that type of thinking is a sure road to ruin.

As we look at government policy we need to not only consider what we see right in front of us but what is also down the road and around the curve.  It takes deep thinking.  On issue after issue it is hard to detect that Democrats see it.

This observation might have been unseen to you before.  I hope that you see it now.

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