Economic Welfare

The city is crowded
My friends are away
And I'm on my own
It's too hot to handle
So I got to get up and go
--Bananarama

Henry Hazlitt observed that economic policies are often misunderstood because of tendency to fixate on: a) the policy's consequences on a single group rather than all groups, and b) the policy's short term outcomes rather than on its long term consequences.

Hazlitt argued also observed that people were prone to make these mistakes because special interest groups who would benefit from enacting particular economic policies hire 'the best buyable minds' (Hazlitt, 1946) to talk the policy pretty.

As such, the intelligent questions to ask in lieu of any economic proposal include:

Who will be the primary beneficiary of this policy? What will be the impact of this policy on all people?

What will be this policy's near term outcome? What will be the long term consequences of this policy?

In nearly all cases, a single group benefits at the expense of the whole, and that benefit is likely a near term one at the expense of society over time.

Test it out. Bailouts, economic stimulus, social programs. All return a similar cost benefit profile.

References

Hazlitt, H. 1946. Economics in one lesson. New York: Harper & Brothers.