I love the Broken Window Fallacy. It sums up income redistribution so simply.
The book that set me on a freedom course many years ago was "Economics in one lesson" by Henry Hazlitt. It featured a section on this fallacy. After all these years I still hear people come to the same incorrect assumptions, most recently after the New Orleans debacle, which if this nonsense were true, would make the corrupt politicians who stole the money allocated for the Lake Pontchartrain dams into heroes instead of the thugs they are.http://whatwethinkandwhy.blogspot.com
I always likened the broken window to the man who had to pay the windowmaker but in order to do so had to lay off a worker. To some degree he lost out which resulting in someone else losing out and so on. The domino effect goes in the other direction too.We can question also how is the economy after Katrina? How is Haiti going to be after the quake? We can use many examples to disprove this theory that a crisis brings better economy.
It's amazing that something so profoundly stupid animates the "economic" thinking of civilization's "leading" voices today. I could almost wax Randian on the moral repugnance of it all- equating destruction with production, calling death life. Yuck.