Scott Burns & Caleb Fuller: Trump has resurrected one of economics' oldest fallacies

Source: The Hill

Trump has resurrected one of economics’ oldest fallacies

by Scott Burns and Caleb Fuller, opinion contributors - 08/29/25 9:30 AM ET

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Ever the showman, Trump loves touting his trade war’s “success” by pointing to reopened factories and re-shored jobs. Strategically speaking, it’s brilliant retail politics. Ribbon-cutting at revived plants, flanked by dozens of smiling workers, make for great publicity.

Alas, Trump’s cunning marketing ploy has resurrected one of the oldest and most notorious myths in economics: Frédéric Bastiat’s “broken window fallacy.”

Suppose a vandal hurls a rock through a shopkeeper’s window. The shopkeeper is dismayed—this cruel stroke of luck will cost him $1,000. But a local wise guy consoles him, saying, “Actually, there’s a silver lining in this dark cloud!” The broken pane, he explains, creates a job for the local glazier. Perhaps he’ll use those hard-earned shekels to buy shoes from the local cobbler, and so on. Society is ultimately made richer from the shopkeeper’s misfortune — all thanks to the domino effect of spending triggered by two seconds of petty mischief.

It’s a nice story — but as Bastiat illustrates, it’s wildly incomplete. Had the window not been shattered, the shopkeeper could’ve spent his $1,000 on something else he valued. Perhaps he would have bought a new suit, creating income for a local tailor. Or maybe he would have bought some meat, ale, and bread for a party, creating income for the local butcher, brewer, and baker.

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Read more: https://thehill.com/opinion/finance/5475603-trump-has-resurrected-one-of-economics-oldest-fallacies/