In Frederic Bastiat’s Political Economy, he talks about the difference between a good economist and a bad economist, which stems from the difference in foresight of the ‘seen and unseen’. In our society, politics and economy can go hand in hand, even in a democratic free market. Why then do economic politics fail us if we have a free market with the government to stimulate the economy? The truth is that the health of an economy is based on being able to foresee the disadvantages that may occur due to the reallocation of wealth. In our world economy today it is necessary to look at the ‘unseen’ in immigration laws as well as the cause for our current dissatisfaction of the economy in order to address why our government should be concerned about what is not obvious.
In the movie “A day without a Mexican” the economics of California changed drastically when suddenly the unfortold dissappearance of the hispanic people changed their lives. The people who used to get derrogatory taco bell comments were no longer working on the orange farms, in the restaraunts, and in their typical jobs. The Californian economy ‘went to pot’ so to speak and everybody was out of a job. People were stealing food like they would try to steal illegal drugs. The ‘seen’ economics according to Bastiat was that the Californian’s believed that the immigrants were stealing their jobs and taking social security funds for themselves, costing the government 10 billion dollars a year. However, what the Californian’s did not see was that the Hispanic people were actually contributing an overall 97 billion dollars and they boosted the economy just by the natural flow of supply and demand on the market. Overall, the movie emphasized the unseen economics that the disatisfied Californian population was not aware of. Our economy is becoming a world economy now and the ‘unseen’ must be clearly presented along with the ‘seen’.
A similar example to how the ‘seen’ can eclipse the ‘unseen’ in economics is the current situation that we are now in. The government wanted to create the opportunity for home owners to own their very own home, regardless of their credit. As a result, the Freddie Mac and Fannie Mae Federal Mortgage Corporation was created to give incentives for home owners. The government decided to extend laws to ease the losses seen by the public, thereby increasing the effects of what went unseen. What was seen was that our government was allowing people to buy homes who normally would not be able to, but what was not seen was that the corporations were eating red ink and covering their losses. Along with the housing market, banks were allowed to give loans to people who in turn used them to future trade barrels of oil, driving up the oil market and making gasoline so expensive. Suddenly they are asked to set their books straight and they can’t, and bam the housing market crashes, banks are in debt and the government bails them out, and gasoline prices drop as the future trading decreases. What was seen in this economy was that we were trying to help people buy houses, but what was not seen is that we created a recession through a bubble.
What we need now are people helping our President to see the ‘unseen’ as well as the ‘seen’ for the future of not only our economy, but the economy of the world.