This is sad. I’ve come across this…….
Though the actual scale of the damage caused by the storm will be known much later—after many months or even years–the estimates are in the range of $20 to $50 billion. (Three ETFs to Watch in Hurricane Sandy’s Aftermath)
Zacks then asks the question…..
Do you think that Sandy will have an overall positive economic impact and boost GDP in the months ahead?
- Greater economic activity will boost U.S. GDP in 2013 and beyond
- There would not be much impact on the macro numbers
- Sandy will have an overall negative impact on the fragile economy
Good Heavens! Lunatics. The answer to the question is obviously this will increase GDP as it is figured today. But, we should realize GDP is only an indicator. It isn’t a true measure of prosperity. How much will the GDP increase, as stated in the article, is unknown. But, GDP will increase because of the cleanup costs, construction costs, restocking costs, and other resupply costs. Note what was a reoccurring word in the the prior sentence……. “costs”!
In the headline, I referenced Frédéric Bastiat. For those not familiar, Frédéric Bastiat was a French born economist notable for developing the important economic concept of opportunity cost, and for penning the influential Parable of the Broken Window. Rational people refer to the parable as the Broken Window fallacy. I won’t bother retelling the entire parable. I’ll give the abbreviated version, and modernize it.
An OWS lunatic takes a rock and throws it through a shop keepers window. The shop keeper has to buy a new window, thus employing a glazier(window maker). Bastiat walks it through how this is a negative economic action not a positive. Oddly enough, there were people then, as there are now, who would argue this point.
There are several ways to look at this, but the easiest way to consider this is that the shop keeper has to pay twice for the same thing. This is wealth extraction. Trained economists can go into much greater detail, but, this is a basic and simple concept. It is not good for an economic to lose all of that value and then have to replace it.
This is depressing to see this silly discussion about Sandy and GDP. If this was an economic positive, then the government should hire people to tear things up. No, the EPA doesn’t count because the things have to be replaced. The EPA is more destructive than any hurricane. But, in the interest of being willing to demonstrate this is a negative event towards prosperity, I volunteer to help tear down any structures and equipment associated with Zacks. And as a bonus, I’ll kick in the National capital. Then we can all cheer because the GDP will increase. Dolts.