Christchurch earthquake: “a gift that keeps on giving”?

NZ is in an economic sweet spot, said EMA chief executive Kim Campbell on Morning Report this morning, citing as part of his eulogy to our economic activity the Christchurch rebuilding. “It is a gift that keeps on giving,” he says.

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.

RELATED POSTS:

• “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 streets.
      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…
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• “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.
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• “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.
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• “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.
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  “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…”
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