Monday, March 28, 2011

The Broken Window Fallacy

Incredibly well done video below that provides a visual to Henry Hazlitt's opening chapter to his must read book: "Economics In One Easy Lesson."

If you have children that are about to enter college and take an economics course, please have then read Hazlitt's easy to understand book before learning anything they try to teach at schools.

Because our leaders are taught the wrong form of economics in school, it is the equivalent of a doctor learning to prescribe the incorrect prescription to a patient, and as the economy/patient continues to get more and more unhealthy, they continue to up the incorrect dosage making the original problem worse.

Investors that understand real economics have the ability to see the effects of the disease before they arrive.  This was how many economists were able to predict the crisis of 2008 well before the Lehman bankruptcy.

It is also why they can now see there is a far bigger crisis on the way due to the wrong medication for the economy currently being prescribed.

When someone tells you that the Japanese earthquake or hurricane Katrina is a positive stimulant to the economy because it creates new jobs to help clean the disaster, please send them the link to the video below: