"This myopic focus on 'price stability' made policymakers blind to other possible pitfalls, such as the surge in credit and the rapid growth in asset prices, and the concomitant misallocation of resources led on by distorted price signals."
Property rights, when well-defined and protected, create incentives for self-interested owners to utilize resources in numerous ways that promote the social good.
"Market prices can get screwed up when the Fed tinkers with interest rates. Because of the distorted price signals, the actual real resources are invested improperly."
The political machine is familiar to Americans. While it may lead to gross abuses, experience shows that some sort of behind-the-scenes organization may be useful to the functioning of democratic institutions.
If capitalism is self-destroying, as he says it is, if socialism leads to the servile state, and if the distributive state as a practical matter is not feasible, then we have but one choice; and that is a choice between serfdom and death.
The unseen effect that is missing in his "Broken Window" analysis is the diversion of time and energy from a community-enhancing endeavor (the unseen) to one of restoration (the seen).
