This talk was originally delivered to a Campaign of Liberty chapter on December 3, 2009. Video will be available shortly.

Today President Obama will tour Allentown, Pennsylvania, in my home congressional district as part of a “Main Street Tour” to show his concern for economic plight of the masses. Many of the people I have spoken with while campaigning innately realize that government is at fault – or at least complain a lot about how the government should “fix” the economy. Unfortunately, many do not have enough of a grasp of economics to understand exactly how the government is ruining their lives and their childrens' lives. Speaking for myself, about 2 years ago I would have been included in this category. This is no surprise as most of the press and educational system has been hijacked by the disciples of Lord Keynes (the Keynesians) and the socialist Karl Marx for the past century.

The late economist from the Austrian school and NY Times columnist Henry Hazlitt wrote a series of easy-to-understand economic lessons in the 1940s in what was later published as Economics in One Lesson. Hazlitt warned of the dangers of what he termed the “seen and the unseen.” Let me give a rather harsh but true example.

Last week one local paper published a story about a local hardware store on Main Street in Nazareth going out of business. I grew up in Nazareth, and this store was there my whole life. The owners were not able to afford the rent, tried moving down the street for cheaper rent, but were not able to save the company.

On the exact same day, another local paper published a story about the Obama stimulus plan. They explain how $7.8 million was awarded to the private Lehigh University for research on hot lava, smarter electric wheelchairs, and Ice Age climate shifts in Alaska. This amount was more than the amounts allotted to Allentown, Bethlehem, and Easton, the three major cities in the Lehigh Valley. Before I continue - I am a proud alumni with an excellent education in chemical engineering provided by Lehigh.

So, what is going on here? It is nothing more than Hazlitt's seen and the unseen at work. What is normally seen is the government spending on government pet projects, whether the Hoover Dam, hot lava research, banker bailouts of Goldman Sachs, or even new roads and bridges. Some government projects may even have some utility, like new roads or bridges. These are held up to the population as examples of how the government is doing its best to help you – with your taxes, that is.

However, what is typically NOT SEEN is local hardware stores failing, or other businesses who fail to get listed on the government's gravy train list. What is NOT SEEN is those living on fixed incomes like social security whose standards of living are affected the harshest by inflation, the businesses that never started due to government interventions. What is NEVER SEEN is the employment these new businesses would be providing and, most especially, what is not seen is simply what would happen if the people were not plundered by government in the first place, either in the form of payroll taxes or the insidious hidden tax of inflation.

Of course, realistically speaking in today's America, what is seen is the looting of the public treasury by the special interest lobbyists who, to a large extent, control Congress, the FED, and the rest of DC. We must instead focus on the general interest of society over the long run. We must remember that government exists to protect liberty, not to redistribute wealth, nor to grant special privileges, nor to interfere with the lives of individuals and their actions.

When the government says that the path to prosperity rests in destroying used cars and giving cash incentives to buy new cars, they are instead saying that the path to prosperity rests with creating false demand, more taxes and destroying economic goods. When the government says that the way to prosperity is to increase the price of milk from dairies, it is like saying that the way to prosperity is to make food costlier for the city worker. When the government says that the way to national wealth is to pay out governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes.

When the government says to make it a main objective to stimulate an increase in the number of jobs by providing government-paid salaries, they are in effect saying that excessive taxation and placing an immense debt burden on future unborn generations is really the main objective. When the government says that the way to recovery is to increase the minimum wage, they have found only another way of saying that the way to recovery is to increase costs of production and legally price people out of jobs. (slides 46-47)

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