A Week of Unseen Things
July 4, 2015
“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.
“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.
“Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.”
– From an essay by Frédéric Bastiat, “That Which Is Seen and That Which Is Unseen,” 1850
If you’re a news addict, the last ten days or so were probably a dream come true. It’s hard to know where to start, but I will limit myself to just four stories … but they’re four big ones. And as Bastiat suggested, we will try to look beyond what we can see to probe the deeper implications in what may be unseen.
- The employment report’s relevance to an interest-rate increase
- China’s stock market lost a year’s worth of momentum – there is a breathtaking crash...