Two separate but somewhat related articles that are worth reading. First, Amity Shlaes reminds us of Frederic Bastiat’s Broken Windows and their application to today’s economy (hat tip: Steven Hayward). An excerpt:

In the summer of 1850, just before going to Paris, Bastiat laid out the now-famous parable. Disaster happens. A thief breaks a man’s window, or a storm does. The man has to pay the glazier to fix it. The glazier spends his money at the store. When enough windows are smashed, voila: a visible benefit, new jobs for the glass industry.

True enough, noted Bastiat. The window replacement is what is seen. What about that which is not seen? “Since our citizen has spent six francs for one thing, he will not be able to spend them for another. It is not seen that if he had not had a windowpane to replace, he would have replaced, for example, his worn-out shoes or added another book to his library.”

The same holds for a government: when it repairs windows — cleans up hurricane damage — it is not using the same money for other causes that might be more worthy, such as reducing government debt or taxes.

“What Is Seen and What is Not Seen” was how Bastiat titled his essay. The corollary “not seen” today is all the businesses that can’t be started because of taxes or regulatory and legal uncertainty. The corporate-tax cut that the president proposed would benefit those unseen businesses or individuals.

The other article is the transcript of a speech that Representative Paul Ryan gave this morning at a Constitution Day celebration in Washington. The focus of his speech was on freedom and the importance of the Rule of Law. A brief excerpt:

Usually, our defense of the Constitution is presented as a defense of America’s founding principles and values, and rightfully so. But our constitutional system is not just a collection of principles; it embodies an approach to government with profound practical implications for both our freedom and our prosperity. When that system is threatened, both freedom and prosperity suffer.

Freedom is lost by degrees, and the deepest erosions usually take place during times of economic hardship, when those who favor expanding the sphere of government, abuse a crisis to persuade free citizens that they should trade in a little of their liberty for empty promises of greater economic security.

We all remember what Benjamin Franklin said about that trade – that those who would make it deserve neither liberty nor security. But in such cases, when liberty is lost, it is our fault as champions of the Constitution, for failing to mount a sufficiently persuasive and effective defense.

Ryan goes on to demonstrate several different ways that the rule of law has been attacked over the years. This speech is by far one of the most serious and consequential political speeches I have ever read. There is no doubt in my mind that Rep. Ryan should run for President (the sooner the better).

Be sure to read both articles.

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