For those who think Hurricane's helped economy...

[Mike AI]

http://www.townhall.com/columnists/walterw...w20041117.shtml (http://www.townhall.com/columnists/walterwilliams/ww20041117.shtml)

Here are a couple of newspaper headlines following Florida's bout with hurricane disasters: "Storms create lucrative times," St. Petersburg Times (Sept. 30, 2004), and "Economic growth from hurricanes could outweigh costs," USA Today (Sept. 27, 2004). The writers, Joni James and Barbara Hagenbaugh, might have been listening to economists like Steve Cochrane, director of regional economics at Economy.com, a consulting firm in West Chester, Pa., who told USA Today, "It's a perverse thing ... there's real pain, but from an economic point of view, it is a plus."

Why are Florida's hurricanes a "plus"? It's simple. According to St. Petersburg Times reporter Joni James, "Construction creates thousands of jobs, insurance provides for billions in consumer purchases, and new facilities built to higher standards might help offset future storm-related losses."

This kind of reasoning, often put forth by poorly trained economists, doesn't even pass a simple smell test. Think about it this way. Using Cochrane's statement, if "from an economic point of view, it (hurricanes) is a plus," would the country have been even better off if the entire East Coast shared Florida's damage and destruction? If it would have been a plus for the East Coast, what about hurricane destruction for the entire nation east of the Mississippi? Almost anyone with a speck of brains would recognize that equating economic growth with destruction is lunacy.

French economist Frederic Bastiat (1801-1850) wrote a pamphlet "What Is Seen and What Is Not Seen," in which he says, "There is only one difference between a bad economist and a good one: The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen." In the case of Florida's hurricane disaster, what is seen is the employment associated with rebuilding. What is unseen is what Floridians would have spent the money on and the benefits therefrom had there not been hurricane destruction.

Bastiat wrote a parable about this that has become known as the "Broken Window Fallacy." A shopkeeper's window is broken by a vandal. A crowd forms, sympathizing with the man, but pretty soon, the people start to suggest the boy wasn't guilty of vandalism; instead, he was a public benefactor, creating economic benefits for everyone in town. After all, fixing the broken window creates employment for the glazier, who will then buy bread and benefit the baker, who will then buy shoes and benefit the cobbler, and so forth.

Those are the seen effects of the broken window. What's unseen is what the shopkeeper would have done with the money had the vandal not broken his window. He might have employed the tailor by purchasing a suit. The broken window produced at least two unseen effects. First, it shifted unemployment from the glazier, who now has a job, to the tailor, who doesn't. Second, it reduced the shopkeeper's wealth. Explicitly, had it not been for the vandalism, the shopkeeper would have had a window and a suit; now, he has just a window.

The broken-window fallacy was seen in a column written by Princeton University professor Paul Krugman after the terrorist attack on the World Trade Center, "After the Horror" New York Times (Sept. 14, 2001). He wrote, "Ghastly as it may seem to say this, the terror attack -- like the original day of infamy, which brought an end to the Great Depression -- could do some economic good." He went on to point out how rebuilding the destruction would stimulate the economy through business investment and job creation. Again, do the smell test. If Krugman is right, wouldn't the terrorists have done us a bigger economic favor if they had destroyed buildings in other cities?

Maybe we shouldn't be so harsh on these reporters and economists in light of the fact that they didn't receive training at George Mason University's Economics Department, where there are no bad economists.

[PornoDoggy]

Gee ... in addition to the add from the ConservativeMatch dating service, at townhall.com we have ...

* "YAF recommends Top Ten Conservative Colleges",

* "Kyoto protocol's smoke screen imperils us all",

* 'Civil unions: Compromise or surrender?
Decter: "Today what is being called 'civil marriage' is a kind of trick of language, a term used as a political euphemism for surrendering to the most recent demand of the homosexual rights movement."'

* "Pro-Life Lawmakers Will Push Legislation Investigating RU 486 Abortion Drug"

* "Wartime Lessons in Leadership: Oliver North's New 'War Stories II' Explains Why Combat Experience Is Instructional"

Gimme a break.

[Mike AI]

Instead of coming up with lame arguements against the website, why not address what the author was saying?

I suggest you read all of Walter Williams articles. Here is a link to the archive.

http://www.townhall.com/columnists/walterw...s/archive.shtml (http://www.townhall.com/columnists/walterwilliams/archive.shtml)

Then read his bio.

http://www.townhall.com/columnists/BIOS/cbwwilliams.htm

I have been reading Prof. Williams for years - I think it has paid off in my bottom line.

[PornoDoggy]

After reading the "article" that you posted, I have absolutely no desire to read any more. The article you've posted has lots of nice words, doesn't really say anything, and simplifies things way too much. "The Little Prince" gets an MBA?

Most of the biasedliberalmedia reports I have heard have not suggested that the hurricanes were good for the economy (although I haven't read what they may be saying in Florida). What they HAVE said is that construction (as well as some retail) employment will improve.

And yes, it's true that the shopkeeper may pass on the suit in order to get a new window. However ... while he is getting that window, he may in fact get some doors, some walls, and some floors that he might have defered until later. So maybe the tailor does have to become a window-maker - hell, he's probably being doing it for five years or more anyway, and thus is due for a change under the new economy.

One does have to wonder what the author's opinion of all that capital being wasted on all those window-makers (and retail clerks), when it could have been accumulated by far fewer people ...

[Winetalk.com]

PD,
let me know when I can blow your house to help the economy.

[Almighty Colin]

Originally posted by Serge_Oprano@Nov 23 2004, 04:38 AM
PD,
let me know when I can blow your house to help the economy.
Whenever a man in Vegas gets blown it helps the economy.

[Winetalk.com]

...and every time man is blown in Boca it hurts it?
;-)))

[slavdogg]

Originally posted by Serge_Oprano@Nov 23 2004, 05:06 AM
...and every time man is blown in Boca it hurts it?
;-)))
of course, he's not out in the hood blowing PDs house up
:D

[PornoDoggy]

Serge ... I do my part for the economy quite well on my own, as I am on a first-name basis with most of the clerks at Home Depot (60 miles away) and my local Ace Hardware. I'm not sure exactly how old this place is (120+, I am sure), but a lot of what's left of the original construction doesn't use "modern" round nails. According to an old fellow who did some work on the place in the 30s or 40s, some of the cabinets and woodwork he replaced back then wasn't nailed at all - it was pegged.

I live in an area of the country where the only thing that outnumber the bean fields are the corn fields. We have them-there ternaders, which cannot be compared to hurricanes (unless one hits your house) but are still pretty nasty. In the three seasons I've been up here, they have come within a mile of the house at least twice, and within five miles six or seven times.

Slav ... you kin git shot fer referin to where I live as "the hood." I live "in town" (1700 people). We don't have a "hood" (unless you count the ones in the back yard of the trailers the other side of the highway, a few of which might even be attached to cars, with the remote possiblity that one of them has run within the last five years).

That's not to be confused with living in "the city" (20,000, 8 miles away, where they do have a "hood" of about 50 families).

"Up to Chicago" is 350 miles, "down to St. Louis" is 200 miles - all of both places is considered "the hood" out here, except the 'burbs, which are almost the hood.

[Winetalk.com]

PD, are you in Kentucky?
Now let me give you the argument against your train of thought using you as an example.

Where do you think all those towns/farmers would be if they didn't have to spend resources on fixing tornado damages every god damn year?
Silicon Valley, perhaps?
;-))))

[PornoDoggy]

Originally posted by Serge_Oprano@Nov 23 2004, 06:20 AM
PD, are you in Kentucky?
Now let me give you the argument against your train of thought using you as an example.

Where do you think all those towns/farmers would be if they didn't have to spend resources on fixing tornado damages every god damn year?
Silicon Valley, perhaps?
;-))))
Farmers would be bitching about the weather. They would be getting too much rain, or too little rain. They would be getting too little heat, or too much heat. Or, they would get just enough heat and just enough rain, but it would come at the wrong times.

(Of course, I know you are aware of this - I have seen a picture of you during your agricultural career. :D )

I personally think that there were four hurricanes in Florida this year because of the inordinate amount of hot air put out by Bush, Cheney, Kerry, and Edwards.

Well ... that, and Mike AI.

[Cleo]

I would be still bitching that my house needs lots of repairs and dreaming of remodeling it if a hurricane hadn't damaged part of it.

While I could have just repaired the damage it seemed like a waste of money just to do patch work so it was a case of if I'm going to do some work I might as well have it all done.

All the contractors that I've been dealing with are telling me that they are slammed with work as lots of other people are thinking the same as I did.

When this is done in January every room of my house plus a new roof will have been redone.

I'm also seeing this all over my neighborhood.

[mojobill]

My problem with the logic in this 'economic boom', is that although it MAY help the economy with job related issues for construction, it comes at what cost to PEOPLE??

Ya, people got insurance money... unforatunately, MOST people did not get fully compensated for the damage that they incurred. Most insurance policies have 'clauses' for 'Depreciation'.... meaning, that PEOPLE have to spend monies that they either a) can not afford or B) were not prepared to spend.

Sure... construction people get a boom... unfortunately it is at the expense of largely elderly people, that were not prepared to pay the additional expense necessary to RESTORE their homes to a previous state....

[Sharpie]

Sure, it is on to who you are & what you do...... and if you are on the inside looking out or the outside looking in.

If you are in construction or home furnishings - it is a boom!

How does this affect the people who were damaged? or a retired person? It is not a boom!

Florida lost a lot of tourism. That is loss that probably can't be made up. Many suffered & are still suffering. Insurance money - hah! When was the last time you made out good with an insurance company on a large loss?

Prices.... supply & demand. You think anyone is getting a good deal on remodeling or replacing anything? Nadda... prices are up. So if you are just a homeowner with a remodeling project - it is costing you more.

The only people I can see making out here, is the people with businesses of replacement of those things lost or damaged in the storms. Yes, for those people - the economy is booming! For average Joe citizen - it is more difficult to make ends meet.

It may be booming now - but the storms are going to have a long reaching effect:

Insurance rates? Insurance is already high in Florida......and it is getting harder to get it every year. Companies can only write a certain quota of business in Florida. EVERYONE is going to pay for this one! Just wait until you see your renewel rates....

Taxes - You have to get a building permit for everything. The State of Florida is very good about keeping track of improvements..... it doesn't take long for additions or remodeling to hit you at tax time. As long as you don't do anything major to your property, they can only raise the taxes 15% a year - but do major improvements, additions, or move - WOW!

[dantheman]

not to mention the businesses that have decided NOT to relocate to sunny FL.

The good I see from hurricanes or any big storm/earthquake is the new contruction will be much better than the old. "most" of the loses in the gulf were older sturtures that prolly couldnt withstand a strong wind gust. Now those will be up to modern standards.

[Mike AI]

Amaing that even when confronted with facts, from a well known and published Economics professor, some people still base all their "knowledge" on how they feel.

I guess this is what seperates men.

[Cleo]

The difference between those that are book smart and the ones that have to common sense to look out the window.

[Winetalk.com]

Originally posted by Cleo@Nov 23 2004, 11:20 AM
The difference between those that are book smart and the ones that have to common sense to look out the window.
Cleo,
you are right and I'll personally fire bomb your house twice a year,
because you beleive it helps you and the economy,
you are very street smart and I :wnw:

[Cleo]

I've already had my quota of natural and unnatural disasters but I could send a few of my friends over to your Boca home so that you could catch up Serge.

[DrGuile]

Far from me to call myself an economist, but the article seems to make abstraction of insurance money and government relief money.

Wouldnt those be "new" money, that wouldnt have been spent in the Florida economy otherwise?

Im not saying hurricanes are a good thing, but that example seems a little simplistic...
?

[PornoDoggy]

Originally posted by Mike AI@Nov 23 2004, 10:00 AM
Amaing that even when confronted with facts, from a well known and published Economics professor, some people still base all their "knowledge" on how they feel.

I guess this is what seperates men.
Oh, come on now, Mikey ... there were some cutesy stories but damned few facts in the article you posted.

I have no doubt that I could find articles related to almost any discipline (economics, law, medicine, environmental science, political science, etc.) "from ... well known and published ... professor[s]" that you would pretty damned quick to dismiss.

I guess that is what defines bobblheads ...

[Winetalk.com]

Originally posted by Cleo@Nov 23 2004, 11:45 AM
I've already had my quota of natural and unnatural disasters but I could send a few of my friends over to your Boca home so that you could catch up Serge.
thank you very much,
but I still haven't run out of shooting targets
;-)))

[Winetalk.com]

Originally posted by DrGuile@Nov 23 2004, 11:49 AM
Far from me to call myself an economist, but the article seems to make abstraction of insurance money and government relief money.

Wouldnt those be "new" money, that wouldnt have been spent in the Florida economy otherwise?

Im not saying hurricanes are a good thing, but that example seems a little simplistic...
?
DrDeguille,
one thing about laws,
if they work and correct in the small samples,
they are correct in large samples as well.

If you and PD were correct,
natural disaster destroying 3/4 of Canadian infrastructure be concidred and excelelnt news for the Canadian economy.

don't you think?

[PornoDoggy]

Originally posted by Serge_Oprano@Nov 23 2004, 12:32 PM
DrDeguille,
one thing about laws,
if they work and correct in the small samples,
they are correct in large samples as well.

If you and PD were correct,
natural disaster destroying 3/4 of Canadian infrastructure be concidred and excelelnt news for the Canadian economy.

don't you think?
The hurricane happened.

Nobody made them happen.* It's an act of [insert diety here] phenomena.

A lot of people suffered great tragedies as a result. There was tremendous loss of capital and property. I don't wish that on anybody.

That being said - there is a lot of capital flowing at the moment as people replace property. I didn't wish the Flood of '93 on anyone either, but I made a ton of money off it doing water-damage cleanups.




* I'm sure there are some who blame them on [insert diety here]'s wrath over rampant pornography and homosexuality. I'm sure there are some who blame it on global warming and pollution.

I'm still convinced it's related to Mike AI's move to Florida.

[DrGuile]

Originally posted by Serge_Oprano+Nov 23 2004, 12:32 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Serge_Oprano @ Nov 23 2004, 12:32 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-DrGuile@Nov 23 2004, 11:49 AM
Far from me to call myself an economist, but the article seems to make abstraction of insurance money and government relief money.

Wouldnt those be "new" money, that wouldnt have been spent in the Florida economy otherwise?

Im not saying hurricanes are a good thing, but that example seems a little simplistic...
?
DrDeguille,
one thing about laws,
if they work and correct in the small samples,
they are correct in large samples as well.

If you and PD were correct,
natural disaster destroying 3/4 of Canadian infrastructure be concidred and excelelnt news for the Canadian economy.

don't you think? [/b][/quote]
eh, of course not,


but you didnt address my points.

(also, not everything scales. unrelated example: A projects that will take 40 hours to one programmer may take 20 hours to 2 programmer, but will not take 4 hours to 10 programmers.... Like you have often claimed but seem to conviniently forget now, nothing is black or white.)

[Diamond Jim]

I can't believe some of what I'm reading...

I sincerely hope PD is debating this issue with Mike (if he really is) on the basis that he disagrees with Mike on everything, period...

Otherwise... :ph34r:

[PornoDoggy]

I don't advocate hurricanes as a method of economic stimulation. I do not wish natural disasters on anyone.

Certain segments of the economy will undoubtedly suffer.

Certain segments of the economy will benefit because of the tragedy.

I do think that Bush will benefit from the apperarnce of some of the economic indicators (employment, for example) as a result of the hurricanes.

I thought the article in question was a "puff piece" that contained very little factual material, and the bias of the source was obvious from a cursory glance. While the cutesy little example of windows and suits has some merit, it doesn't take into consideration that King George is going to inject considerable amounts of capital that will enable the butcher, baker, and candlestick maker ( :ph34r: left out of the original article - there may be a discrimination claim here :ph34r: ) to buy more than they would otherwise.

Again ... I'm not saying that the hurricanes will result in a boon for everyone. I'm saying it's a lot more complex than the article Mike posted suggests.

[Diamond Jim]

Well, then, you got an ENTIRELY different understanding of the article then I did...

There are benefits and losses in almost everything. If you shoot someone in the head, you help employ the police, paramedics, morticians, etc..

All I got from the article is, some dumb economists were trying to make a hurricane look like a net gain overall, when it isn't...

How did Bush get involved in anything?

[PornoDoggy]

That (Bush's benefit) is an observation on my part. Nothing more, nothing less.

[Buff]

Well after reading the abject ignorance of the economically illiterate here, I can only hope New York and Los Angeles suffer the fates described by The Day After Tomorrow -- man, think of the economic benefit to the United States....

Jesus Christ, but some people need help.