The second problem with this statement ("of course it looks designed, because otherwise we wouldn't be here!") is that it's a completely nonsensical answer. Let me shift our perspective to point out how absurd this is.
The degree of fine tuning required for this universe to support life exceeds one part in 10^70 (in fact, it exceeds this by a lot. A lot a lot). The chance of winning the lottery is more like one in 10 million (ie, 10^7). Just to get to one part in 10^70, you would have to win the lottery ten times in a row. Now, assuming you won the lottery even once, doing it twice in a row is quite ridiculous. If you even won it three times in a row, you can bet the FBI would be after you, and for good reason! They would suspect that you somehow rigged it.
If you don't like the lottery analogy, let's say you flipped a coin, and found that it came up heads ten times in a row. Not unbelievable, but quite unlikely. Now let's say you flipped it 10,000 times, and it always came up heads. Long before you got to the 10,000th flip, you'd start to suspect the fairness of the coin. After all of those flips, would you bet the 10,001st flip would be tails? Why not? If it was perfectly random, then the 10,001st flip would be 50-50 heads/tails, wouldn't it? Regardless of the previous 10,000 flips?
In other words, at some point, the odds become so ridiculous as to force you to conclude it isn't just a coincidence. If that's true with the lottery and the coin examples, why wouldn't it be true with the design of the universe?
However, I admit that neither of these examples specifically address the selection effect. Just the absurdity of avoiding the cause of the design. So, here's the classical refutation of the selection effect argument (thanks to William Lane Craig):
Suppose a dozen sharp-shooters are sent to execute a prisoner by firing squad. They all shoot a number of rounds in that direction, but the prisoner escapes unharmed. The prisoner could conclude, since he is alive, that all the sharp-shooters missed by some extremely unlikely chance. He may wish to attribute his survival to some remarkable piece of good luck. But he would be far more rational to conclude that the guns were loaded with blanks or that the sharp-shooters had deliberately missed.(I stole that, word-for-word, from here. I admit I didn't read the whole website, so therefore I don't know whether I can explicitly endorse it, but it did have the information I was looking for...)
Anyway, it would be slightly ridiculous for the prisoner to say, "Of course I'm alive! I wouldn't be here to observe this remarkable coincidence otherwise!" The point is, regardless of the selection effect, we are far more rational to conclude, based on the extreme degree of apparent design, that the universe was in fact designed.