Just contemplate that for a moment.
Here is someone trained in mainstream economics, and saying some other good things in the interview, who describes as “a gift that keeps on giving” a disaster that killed 185 people and destroyed homes, buildings and billions of dollars of wealth —quite as if the source of economic stimulus is destruction. Incredible. Not least because all the activity he cites so proudly is simply economic activity endeavouring just to get back to a situation enjoyed six years ago—activity paid for by all of us through both reduced production (from both the business activity reduced by the earthquake and the extra taxes being paid for The Rebuild™, and by all that present production being essentially projected backward rather than forward.)
You really do have to wonder about the way economists measure and talk about economic activity and wealth when someone so apparently knowledgeable can be so astonishingly stupid.
If he really thinks that situation describes a “sweet spot,” then I have a Broken Window I can sell him.
- “Let us begin with the most topical illustration possible: let us choose all
the broken buildings and shattered panes of glass now littering Christchurch’s
A crowd gathers, both in Christchurch and on televisions around the world, staring with quiet horror at the gaping holes in the buildings and the rubble and shattered glass over the streets and businesses of the city. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the business owners that, after all, the misfortune has its bright side.
A Smiling and Waving Man smiles and waves about the work this will give to unemployed tradesmen. And the head of the local Contractor’s Federation smiles that it will make business for many glaziers and the members of the local Contractor’s Federation…
“I love the sound of breaking windows” – NOT PC, 2010
- “So it looks like those who thought insurance payouts might be like a free
lunch—like the stimulus a Krugman or Keynes might dream about—were wrong.
“Turns out there really is no such thing as a free lunch, and the Broken Window Fallacy really is true: there really are no blessings from destruction. None. At. All.”
More broken windows: Another Christchurch update – NOT PC, 2011
- “We have it reconfirmed this morning, as if we needed reconfirmation, that
earthquakes, hurricanes, tsunamis and other natural disasters are not good for
economies, or for people.
“First of all, we’re now told (nearly a year after the fist quake, that’s how “fast” these people move) that the liability of the Earthquake Commissionalone after the Christchurch Earthquakes has now more than doubled to $7.1 billion. Not bad when the EQC has only around $1.5 billion of real assets to call on. The rest of the bill rests on you and me and every other taxpayer—calling into question the reason for this blundering bureaucracy to even exist.
“And second, after the damage caused by Hurricane Irene we’re starting to see the realisation spread that destruction really isn’t good at all. Jeff Jacoby, for example, writes in the Boston Globe that disaster isn't a stimulus package, even though mainstream economics still teaches that it is…”
Hurricanes, broken windows, and the EQC – NOT PC, 2011
- “As I mentioned the other day, mainstream economists are talking up New
Zealand as a
“rock star” economy on the basis both of expectations of greater demand from
China for our milk products, but also because of greater consumption spending.
“The latter can only figure as ‘growth’ if the way you measure growth is based on consumption rather than production, which is exactly what so-called Gross Domestic Product measures – measuring spending on retail goods or by government (which is all consumption spending) as production, but ignoring most of the production that makes this spending possible.
“It’s like judging a rock star’s success not by how many great records he’s produced and sold, but by how many lines of coke he puts up his nose…”
Skousen celebrates new non-destructive growth measurement – NOT PC, 2014