Will Sandy Revive the Economy? Yeah, Right

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OK, Paul Krugman has not claimed that Hurricane Sandy will make us rich or revive the economy, but at least one other mainstream economist has done something of that sort. Peter Morici, an economist at the University of Maryland, has written that disasters such as Sandy ultimately might prove net economic benefits because of all the cleanup and construction (or re-construction) work that follows.

One does not know whether to laugh or cry at this nonsense. Frederic Bastiat effectively destroyed this "Broken Window" fallacy nearly two centuries ago, but the monster continues to poke up his head and people who should know better swallow the idiocy.

Krugman actually did succumb to this fallacy 11 years ago, as Reason.com points out:

The ultimate example of broken-window lunacy comes from NobelPrize-winning economist Paul Krugman. On September 14, 2001,Krugman used his New York Times column to lecture BigApple residents about the upside of the utter destruction of the World Trade Center and a goodchunk of lower Manhattan just a few days earlier: "Now, all of asudden, we need some new office buildings...the destruction isn'tbig compared with the economy, but rebuilding will generate atleast some increase in business spending."

 Hey, economies are nothing more than spending, right? Just print, borrow, and spend and we'll all get rich, even if we throw a hurricane into the mix.

If anyone is wondering, we got hit with a blizzard of heavy, wet snow that snapped trees and power lines. We have been without power since Monday evening and, unlike Paul Krugman, we do not have a generator (which means we have no running water). Life has been interesting but hardly tragic. I now understand why the Amish tend to go to bed early.

I have included a couple of photos of our place to put this whole storm into perspective. Yes, that is our van on the right.