“Was It Global Warming When Stronger Hurricanes Hit the East Coast in the 1950s?” [updated]

The facts are clear: The 1950s had “a road map of destruction up the East Coast.” “This map speaks for itself.”

Chief Meteorologist for Weatherbell Analytics Joe Bastardi is sick of ill-informed commentary linking weather, SuperStorm Sandy, with climate.

“Was It Global Warming When Stronger Hurricanes Hit the East Coast in the 1950s?,” he asks.

It is frustrating to be out in front of the hurricane threat on the U.S. Coast, and then have people who either have not looked, or have, and are simply ignoring the facts, come in after the fact and make their claims. I have referred to these people as weather "voyeurs." They only look when it suits their purpose. In the private sector, our fight is every day, and the knowledge of the past and the reasons for the weather and climate are the foundations for any success in the future. A good meteorologist has to know his weather and climate history or he will fall prey to the whims of the computer models. Perhaps you saw some of that with Hurricane Sandy. Until the middle of the week before the storm, the U.S. generated model was taking the storm out to sea and there was denial in some circles that Sandy was going to come back and hit the coast.
    Of course, the usual suspects piled on the disaster train once it became obvious, to push their AGW agenda. They are nowhere to be found before the fact, but certainly come out of the woodwork after. I leave the reader to judge the tree by the fruit on it.

Yes, please do.

Here are a few reminders that will assure you that a storm like Sandy is well within the realm of what nature can, and in reality, should do, especially given the cycle we are in, which is very similar to the 1950s (cooling Pacific, with a still warm Atlantic)…

    You will have seen the chart above many times, but it does not get old, nor does the fact change that the earth is no longer warming, but CO2 is still going up. That chart should be enough to debunk the AGW idea on hurricanes since if the earth is not warming, it can't be warming that is causing more hurricane hits.
    The other problem is that there are not more hurricane hits -- the total global tropical activity is down! The Global ACE index (accumulated cyclonic energy) which gives us an objective way at looking at total global tropical cyclone activity, has tailed off to record low levels.
    So we have two objective measurements saying that:

            a.) The earth is no longer warming.
            b.) Tropical activity is not getting worse.

Interestingly enough, as if to teach a lesson to the Nobel Committee, the tropical activity started tailing off most strongly after Al Gore was awarded a Nobel prize for his movie An Inconvenient Truth. The actual Truth however is the opposite (which is inconvenient, though apparently largely ignored by Al Gore).
    But the irony grows even richer when one considers the fact that hurricane hits on the U.S. Coast were greatest when there was less CO2!
    In the end, blaming Sandy on Global Warming or "Climate Change" is … shockingly ignorant or shockingly deceptive. The facts are clear on this and not hard to see, if one simply looks!

He’s right, you know.

UPDATE:  Furthermore, even if you don’t buy the actual truth that the earth is no longer warming, or that the correlation between CO2 and hurricane activity is the reverse of that promoted by warmists, consider that you can't fix a hurricane with climate policy.

Whatever the truth of man’s role in global warming, whatever the merits of regulating CO2, making climate policy the answer to hurricanes can’t be anything but a fraud on the public. Doing so, literally, is like proposing to spend trillions to reduce by an inch or two an 11-foot storm surge that might occur sometime in the next century.

Storm Economics in One Lesson

Guest post by Jeffrey Tucker of Laissez Faire Books 

In a natural disaster like Hurricane Sandy, the only thing people should fear more than the storm is the government's response.

Let us count the ways.

Mandatory evacuations presume that politicians know the risks better than property owners themselves. That can't possibly be true. In an information age, we all have access to the same data. Especially these days. We should be able to make our own risk assessments, coming and going from our property as we choose.

Where is the evidence that property owners systematically underrate risk whereas political elites are clear headed and know precisely what to do? The incentives for the government is to clear everyone out because doing so exempts city workers from liability for failing to do the job they exist to do, namely to protect and serve people in times of crisis.

There is also something extremely perverse about arresting people for failing to take government-mandated steps to protect themselves. When it is all over, government is in then in a position to control access to one's own home and property. In every natural disaster with evacuations, people find themselves struggling against their own government to get back to their own property and assess the damage.  [Christchurch, anyone?]

In this case, all across the Northeast region, even where storms only brought some wind and rain, it was the government workers who fled first. It makes sense because they tend to regard themselves as more valuable than the rest of us. A friend posted the following even before the storm hit:

So I call 911 for the downed power line in the alley way. I get Fairfax county 911. They transfer me to Alexandria city 911. They refer me to the storm damage emergency line. I get the voicemail for the city communications office.
So I call 911 again. They transfer me again. They refer me again. I tell them, but nobody is answering. They say that's where I'm supposed to call. So I call again. The guy there does not know for sure whether he is supposed to take calls for downed power lines. (pause) He looks it up. (pause) He decides he is supposed to take my information and enter it into the computer.
I call my landlord. He comes right over.

Then there's the anti-gouging mania that hits every government executive. They warn with great bravado that no private seller can raise prices more than 10% in the event of an emergency. This defies reality. Storms and impending storms send existing supply and demand matrices into total upheaval.

Prices change, and that's a good thing. It should go without saying that when things and services are in shorter supply, the price of them goes up. This serves two purposes. It provides a signalling device and incentive for new sellers to jump into the market. It also signals the need for more and alerting consumers to conserve until more arrives. This is good for everyone. Would you rather pay $5 a gallon for water or have no water available for sale at all? That's the choice.

When government threatens people not to profiteer, it discourages producers from entering the market. And yet this is what they do. One North Carolina paper even editorialized for people to rat out any gougers by turning them. "It's a good law, and is made better when the public reports profiteering incidents to authorities."
Amazing: demonize the people who are providing solutions in time of crisis!

Short-circuiting the pricing process discourages gas stations, water sellers, restaurants, and everyone else in the commercial marketplace not even to bother showing up. Why take the risk when there is no reward? As for the goods and services that are available, they will be depleted more rapidly than they should be.

Lives are at stake here. Yet all the politicians seem to care about is their reputation and power, regardless of the consequences. Long experience tells us that it is not government that serves people well in emergencies, but places like WalMart, Waffle House, and Lowe's. Of course, these commercial establishments are the ones that the political class tries to shut down. It's perverse even by government standards.

Given the torrent of criticism over the last disaster, FEMA did its best to spin opinion in its direction this time. They have the National Response Coordination Center, which, as the New York Times says, decides "where officials gather to decide where rescuers should go, where drinking water should be shipped, and how to assist hospitals that have to evacuate."

In other words, they tell people what to do. But who is actually doing the thing itself? The Wall Street Journal reports that WalMart "staffed up an emergency operations center at its headquarters last Thursday and began routing shipments of goods to 10 disaster distribution centers along the storm's projected path. As the storm clears, WalMart will dispatch trucks from the disaster warehouses to stores in the areas hit by the storm."

Sandy was a less deadly storm than it might have been because of such preparations. Can we get a round of applause for Home Depot, Wal-Mart, Lowes, and the thousands of other retailers who made a difference this time around?
As well, how about a respectful nod to new commercial technologies. Even when the power failed, the cell towers still functioned. 3G connections were going full blast while the lights were out. YouTube's live streaming technology allowed anyone to watch live reports on their smart phones. Instagram permitted live documentation of the entire storm, with 10 images per second being posted. Reporters filed reports from their iPads even with massive power outages. This was the most-documented storm in the history of the world, all thanks to the market economy.

Then there's the aftermath in which government suddenly discovers millions and billions of dollars available to shovel onto the clean-up and rebuilding efforts. Decades of experience show that average people see little of this money. Instead, it goes to government contractors and real estate developers and other preferred groups who are closely connected to politics. The money is taken away from the private sector when it is needed most and transferred to people who waste it on projects that the market may or may not value.

The process to get approved for post-disaster largess causes city and state governments to even delay private clean-up efforts. The political class discovers that it has every reason to make the mess look as bad as possible as long as possible, all in the hope of getting ever more money sent from the capital city to the affected area.

Another tendency is for government to enforce licenses on all service professionals. Want someone to cut down the tree or fix your plumbing or rewire your home? You had better choose someone with a license to do business or you will be in big trouble. Of course, this only discourages an influx of new service providers just when they are needed most.

In general, government sees every emergency has a power-grab opportunity. I get shivers down my spine just reading about FEMA's wonderful plans to nationalize just about everything should the need present itself. If anyone believes that martial law is out of the question under these conditions, he hasn't been paying attention to the police-state trends over the past decade. Weapons confiscations? It's going to happen if conditions get bad enough, as happened in New Orleans during the Katrina disaster.

Then there's the role of economists. It is inevitable that some find an upside to the destruction in a natural disaster, same as they find an upside to stimulus and inflation and war. "While natural disasters take a large initial toll on the economy," Moody's Ryan Sweet said on economy.com, "they usually generate some extra activity afterward."
Yahoo Finance ran the most notorious example this time around, asserting that every act of destruction contains a multiplier that causes even more creation later.

For the umpteenth time, there is no upside to wealth destruction. But try telling that to the folks who calculate GDP. It is very likely the Sandy will be given credit for any fourth quarter fake economic growth. After all, that's how government affects the GDP. The more it spends, the higher economic growth appears to be.

You need only look at the third quarter 2012 GDP statistic that dominated the headlines last week. The government announced the thrilling news that the economy grew 2 percent. But Veronique de Rugy and Keith Hall of the Mercatus Center looked more carefully at the data to find that "all of the increase in GDP growth came from the biggest increase in federal government spending in over two years."

It turns out that government spending rose 9.6% at an annual rate in the third quarter. Hence the seeming “boost” to productivity. Never mind that the government has nothing that it doesn't take from somewhere else. Private sector growth rates actually fell in the third quarter compared with the second.

This is not economic growth. No matter how many economists tell us that the storm will inspire all kinds of new and wonderful things, the first impression will remain true. This storm has been a disaster and a serious blow to the economy when we least needed it.

At the same time, the storm should remind everyone who romanticizes about the wonders of nature that there is a more fundamental truth: the whole history of humanity has mostly consisted in finding ever more effective ways to diminish the nature's threat. First came shelter, then came clothes, then came tools to kills animals for our own use, then came transportation to overcome the limits of nature so that we could travel fast on land and water.

It's true with every advance: indoor heating, air conditioning, indoor plumbing, the washing machine, chemicals to kill pests, medical advances to keep killer bacteria at bay. To a very great extent, it is the struggle away from nature that defines the idea of progress. It is only once the elements have been master that we can afford to think of the environment around us as a friend.

These are things we can learn during times of natural disaster. They are the same things we should know before the natural disaster. Only people know what's best for themselves. Only markets can deliver goods and services. Only property owners know how to assess risk. As for politicians and bureaucrats, they care only about themselves.
Governments do vast damage in normal times, and vastly more precisely when it is commonly believed that they really need to act. In all times and places, people who are determined to build and sustain a life for themselves are inhibited only by the actions of powerful governments.

The people who are suffering through the aftermath of this storm are all being reminded that the political elites are not very useful in times of crisis, and, in fact, are frequently worse than useless. Storm preparation and storm survival is our job, not theirs.

There is no better preparation for any storm than understanding economic forces that are at work at all times and places. This is where the Laissez Faire Book Club does its work, helping people to understand their world in ways that government officials cannot and will not. Join us to stay dry in this and future storms.

Sincerely,
Jeffery Tucker
CEO of Laissez Faire Books , and Primus Inter Pares of the Laissez Faire Book Club

Is there anything good about #Sandy?

The only good thing about a storm that killed at least 39 people, disrupted millions of lives and caused around $20 billion of damage is the chance to talk about Frederic Bastiat’s lesson in his seminal essay "That Which is Seen, and That Which is Not Seen".  And the only reason we have that chance is because there are so many alleged economists out there—the same trolls who emerge after every disaster—who leap into print to insist the destruction will actually be “good for the economy.”

Alleged economist and professor at Smith School of Business Peter Morici, for example, who took immediately to the Philadelphia Inquirer and elsewhere to argue:

in an economy with high unemployment and underused construction resources, Sandy will probably unleash $15 billion to $20 billion in private spending directly related to reconstruction.
    That figure could grow as many rebuild larger and better than before. Consider a  struggling restaurant, for example, whose owner invests his insurance settlement in a new and more attractive business. In areas like the Jersey Shore, older, smaller homes on large plots may be replaced by bigger dwellings that can accommodate more families during the tourist season. The Outer Banks of North Carolina saw such gains several decades ago after rebuilding from a storm of similar scale.

Equally moronic is Panos Mourdoukoutas at Forbes.com, Derek Thompson at The Atlantic, Moody’s Analytics Ryan Sweet writing in the Wall Street Journal,  Chris Isidore at CNN Money, and AP “economic writers” Christopher S. Rugaber & Martin Crutsinger writing everywhere ---all of them saying, as summarised by the idiotic Bo Peng writing in The Street,

In an economy not constrained by resources, such as that of the U.S., limited crisis means only two things at the statistical level: stimulus to individual and government spending; and stimulus to jobs.

That’s a whole asylum full of morons, to which only a moment’s Googling would be needed to add dozens more. And Paul Krugman hasn’t even had the chance to post yet.  Or Bernard Hickey.

Blogging at the Acton Institute, Joe Carter asks

Frederic Bastiat provided the ultimate rebuttal to this spurious thinking 162 years ago in his essay ‘That Which is Seen, and That Which is Not Seen.’ So why do we people make the same claim that destruction is economically beneficial? Could it be that people are simply unaware of Bastiat’s “parable of the broken window?

Either unaware, or too blinded by lousy economic thinking.

No wonder the sane, dry and sober Don Boudreaux “is far less worried about the actual consequences of Sandy than about the additional battering that Sandy's winds, rains, and flood waters will prompt economically uninformed reporters and pundits to inflict upon the body politic.”

Fortunately, sane and serious commentators are educating bodies both public and politic.

Writing at Bloomberg, Caroline Baum has

a standard response to such nonsense: If wealth destruction is such a good thing, why wait for natural disasters to occur when we could nuke and rebuild our cities on a regular basis?
    Yes, housing starts will increase, but the stock of homes won't be any larger. Businesses will replace the lost capital stock, but drawing on scarce resources to rebuild isn't an efficient use of them.
    Our old friend Frederic Bastiat explained it best -- the parable of the broken window --  in his 1850 essay, "That Which Is Seen and That Which Is Not Seen." He tells the story of a shopkeeper whose son breaks a window in his store. The shopkeeper has to pay the glazier six francs (no euros back then) to repair it. The glazier then has money in his pocket to spend. This is "that which is seen," or the Keynesian multiplier decades before John Maynard Keynes was even born.
    What if the shopkeeper didn't have to spend six francs to repair the broken window, Bastiat asks? He could have bought a pair of shoes, or spent it on something else. "Neither industry in general, nor the sum total of national labor, is affected, whether windows are broken or not," Bastiat writes. "Or, more briefly, 'destruction is not profit.' "
    Even a Ph.D. economist should be able to grasp that principle.

Boudreaux himself  describes Morici’s flawed reasoning as Vulgar Keynesianism at Full Gallop:

There’s nothing surprising in Prof. Morici’s argument that the spending necessary to repair damaged buildings and other assets can help the economy. Predictions of economy-wide wealth springing from devastation are issued after every natural disaster. These predictions are examples of what the English jurist A.V. Dicey called “the idle contentions of paradox-mongers”* – predictions that are just clever enough to strike economically uninformed people as being profoundly insightful.
    But what appears to many to be profoundly insightful is, in fact, fallacious.
    If Prof. Morici is correct, then surely he also applauds, say, the economic consequences of drunk driving. As with hurricanes and earthquakes, he can bemoan the loss of life caused by drunk driving and then get on with explaining how, paradoxically, the economy benefits from drunk driving. After all, drunk driving creates unnecessarily large numbers of destroyed automobiles to replace, damaged automobiles to repair, dead victims to bury, and injured victims to be cared for by first-responders, doctors, nurses, physical therapists, and hospital administrators and clerks.
    If you sense – as you should – that the economy in fact does not benefit from drunk driving, then you should reject Prof. Morici’s argument that the economy benefits from natural disasters.

At National Review, Veronique de Rugy wonders aloud at those who argue

Being forced to spend money that people had planned to spend on something else or to save to prepare for harder days ahead in order to give an artificial boost to GDP in the construction business has benefits? No, it doesn’t other than superficially. That’s what French economist Frederic Bastiat called the broken window fallacy. Bastiat rightly noted that a country doesn’t benefit or get richer because of the destruction imposed by disasters (whether natural or man-made ones, such as wars). Destruction of wealth, buildings, streets, subway systems, houses, electric grids, bridges, and more doesn’t make a country richer even if it temporarily creates jobs in the construction business. All destruction does is destroy and divert to the reconstruction effort scare resources that could have been allocated to other things (things people actually really wanted). 

She attacks the standard Keynesian response to the broken-window fallacy argument:

Keynesians argue that the broken window fallacy applies if and only if the resources needed to fix the window were already fully employed before they had to be diverted. However, today’s economic conditions are such that there are plenty of idle resources lying around that can now be put to productive use. But … why are there so many idle resources lying around? (Especially after years of policies meant to put them to good use.) [On that, Robert Murphy has several good points in response to the Keynesian argument.]
    On that note I would add that what we have found out during the last episode of stimulus spending is that unemployment rates among specialists, such as those with the skills to build roads, bridges or schools, (basically the people who will be used during the reconstruction effort in the next few months) are often relatively low. Moreover, it is unlikely that an employee who specializes in residential-area construction can easily update his or her skills to include rebuilding bridges or electric grids and subway systems. As a result, firms receiving stimulus money tend to hire their workers away from other construction sites where they were employed rather than from the unemployment lines. This is what economists call “crowding out.” Except that in this case, labor, not capital, is being crowded out. In fact, the original work of GMU’s economist Garett Jones and AEI’s Dan Rothschild confirms that a plurality of workers hired with ARRA money were poached from other organizations rather than from the unemployment lines. The same will likely be true today with Sandy and the reconstruction effort that will follow its devastation. 

Writing at Forbes, Tim W0rstall reminds us the ignorant are only able to make their argument these days because of their GDP fetish allowing them to confuse our stock of capital with the flows that emanate from them.

[Here] is half the problem with the way we calculate GDP: government spending counts at what it costs, not what value it produces.
    The other half of the problem is that we are measuring the current activity, not the capital value. This is a common complaint when we talk about pollution. Cleaning up an oil spill counts as an increase in GDP. Which it is of course: we think that cleaning up an oil spill adds value so cleaning up an oil spill does add value. That’s why we clean it up and also why we count it in GDP: our measure of value being added.
    The problem is that we don’t count the loss in capital value of the original spill itself: nor of any other pollution. GDP measures the flows in the economy, not the stock…
    Imagine that the total wealth of the US is $100 trillion. All the buildings, the factories, the financial assets, the human capital, the natural resources, all add up to $100 trillion. The GDP of the country is around $15 trillion. That second is the flow that we get from the stock of the first.
    Now imagine that Hurricane Sandy does $20 billion of damage to that wealth [which is what disaster analysts Eqecat suggest]. The US is now worth $99.980 Trillion. GDP might rise to $15.01 trillion as we repair that damage. But we’re not in fact any richer at all: despite the fact that GDP has gone up. What has actually happened is that some of our stock of wealth has been destroyed and we’re having to do more work in order to rebuild it. This is exactly the same as our pollution example. We’re measuring what we produce but not the capital stock of what we have (or had).
    Yes, the rebound from Sandy may well provide a boost to the economy. But that’s a function of the way that we measure that economy, not a real boost in our general wealth.

It would be nice if some folk remembered that. Or learned it.

It is the difference in essence, as David Ricardo once pointed out, between Value and Riches.

To help them, let me conclude by quoting extensively from the great Frederic Bastiat himself—whose insights still cast an enormous shadow. Here below is the relevant excerpt from his seminal 1850 essay, around which the great Henry Hazlitt developed his “one lesson” of economics:  “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.”

…Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation - "It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade - that it encourages that trade to the amount of six francs - I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

Let us take a view of industry in general, as affected by this circumstance. The window being broken, the glazier's trade is encouraged to the amount of six francs; this is that which is seen. If the window had not been broken, the shoemaker's trade (or some other) would have been encouraged to the amount of six francs; this is that which is not seen.

And if that which is not seen is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry in general, nor the sum total of national labour, is affected, whether windows are broken or not.

Now let us consider James B. himself. In the former supposition, that of the window being broken, he spends six francs, and has neither more nor less than he had before, the enjoyment of a window.

In the second, where we suppose the window not to have been broken, he would have spent six francs on shoes, and would have had at the same time the enjoyment of a pair of shoes and of a window.

Now, as James B. forms a part of society, we must come to the conclusion, that, taking it altogether, and making an estimate of its enjoyments and its labours, it has lost the value of the broken window.

When we arrive at this unexpected conclusion: "Society loses the value of things which are uselessly destroyed;" and we must assent to a maxim which will make the hair of protectionists stand on end - To break, to spoil, to waste, is not to encourage national labour; or, more briefly, "destruction is not profit."

What will you say, Monsieur Industriel -- what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account that which is not seen, and placing it alongside of that which is seen. The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention. One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two. Another under the title of the glazier, shows us the producer, whose trade is encouraged by the accident. The third is the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause. It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favour, all you will find will be the paraphrase of this vulgar saying - What would become of the glaziers, if nobody ever broke windows?

It is the same with a people as it is with a man …

Oh, Sandy [rolling updates]

It looks like Sandy is coming back to Asbury Park, New Jersey, today. This early Bruce Springsteen lament seems eerily appropriate.

PS: Just so you know, the Wall Street Journal has opened its pay wall and WorldStream so you can keep up with coverage of the looming hurricane.

Map from Wall Street Journal

UPDATE 1: In the wake of Sandy, be prepared for an onslaught of both enviro- and econo-silliness—both from economists arguing destruction causes prosperity (yes folks, sit tight for an onslaught of Broken Window Fallacies), and from warmists desperate to link weather to climate.  (“Even in the midst of hurricanes,” notes Anthony Watts, “these people don’t give up trying to tie weather to climate. It’s shameless desperation.”)

Here’s some first signs of the warmist schtick: US warmists Bill McKibben and Joe Romm were out of the blocks early with their Tabloid Climatology™. Our own Jim Salinger pitched in on State Radio this morning. And Mr Real Estate Martyn Bradbury tried to join the tabloid climatologists with his own contribution.

Meanwhile, Roger Pielke points out “Large, damaging storms are not unprecedented in the second half of October, with Storm 11 (1944, ~$54 billion), Wilma (2005, $26 billion) and Hazel (1954, $24 billion).”  Quite so, concurs Anthony Watts, who lists destructive October hurricanes making landfall in the north-eastern States all the way back to 1852—long before the first drop of carbon dioxide was emitted from an exhaust pipe.

Now, the alleged economists: Frank Stephenson points out some early alleged economics portraying Sandy as "stimulus.".  Meanwhile, Don Boudreaux and Tim Worstall fire the first salvoes on behalf of sanity: “Destroying Property Does Not Promote Economic Prosperity,” argues Boudreaux. And Worstall points out that if anyone does see prosperity in destruction, it is only because of the ridiculous way GDP is measured. “The problem is that we don’t count the loss in capital value of the original [destruction]: nor of any [further consequences]. GDP measures the flows in the economy, not the stock.”

These numbers aren’t accurate (no one really has an accurate number for the wealth of the entire US) but they’re in the right order of magnitude at least. Imagine that the total wealth of the US is $100 trillion. All the buildings, the factories, the financial assets, the human capital, the natural resources, all add up to $100 trillion. The GDP of the country is around $15 trillion. That second is the flow that we get from the stock of the first.
    Now imagine that Hurricane Sandy does $10 billion of damage to that wealth (for our purposes it doesn’t matter whether it’s $100 billion or $1 trillion. Although this obviously matters to everyone except for the purposes of this example). The US is now worth $99.990 Trillion. GDP might rise to $15.01 trillion as we repair that damage. But we’re not in fact any richer at all: despite the fact that GDP has gone up. What has actually happened is that some of our stock of wealth has been destroyed and we’re having to do more work in order to rebuild it. This is exactly the same as our pollution example. We’re measuring what we produce but not the capital stock of what we have (or had).
    Yes, the rebound from Sandy may well provide “a boost to the economy.” But that’s a function of the way that we measure that economy, not a real boost in our general wealth.

UPDATE 2: Don Boudreaux’s been busy.  He’s also taken the opportunity to send to the Washington Post the BEST LETTER EVER on speculation:

Have you noticed the enormous increase in greedy speculation in the northeast over the past two days?  It’s quite something!  In advance of hurricane Sandy, consumers are now artificially increasing the scarcity today of the likes of bottled water, canned goods, batteries, and medicines by stocking up on these goods.
    And all of this self-interested speculation – done merely in anticipation of staple goods being much more scarce after Sandy strikes than they are today – is applauded and even encouraged by the news media and government leaders!
    What gives?  Many of the same people who today publicly encourage us to speculate (“Make sure your family has ample supplies of batteries!”) are among the loudest critics of speculation at other times and in other markets.
    But in fact the oil speculator who, say, buys oil today in anticipation of oil becoming more scarce tomorrow does just what a consumer does today in a supermarket in anticipation of a disruptive storm: both persons usefully transfer resources across time.  They both stock up on resources that are today relatively abundant in order to preserve these resources for consumption at a time when they are relatively more scarce (and, hence, more precious).  Both persons transfer resources from today – when the consumption of any one bottle of water or gallon of gasoline provides relatively less benefit – to tomorrow when the consumption of that same bottle of water or gallon of gasoline will provide relatively more benefit.
    Anticipating the future and taking actions to allocate goods and services from times of relative abundance to times of relatively greater scarcity is an immensely useful activity.  And we all perform such speculation whether or not we are popularly identified as “speculators.”

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA  22030

UPDATE 3: The first and longest boardwalk in the US is now floating through the streets of Atlantic City, New Jersey:

UPDATE 4: Hurricane Sandy death toll in Caribbean rises to 69, mostly in Haiti.

UPDATE 5: Storm surge and high tide put ‘lower’ Manhattan under water [pics from Zero Hedge]:

UPDATE 6: WSJ reports Governor Cuomo’s office “has confirmed at least five storm-related fatalities in New York.”

UPDATE 7:  CNBZ reports National Guard troops have moved into Lower Manhattan. Basement apartments, subway tunnels along the lower East River are under water. Water “rushing into” Battery Tunnel. Con Edison has begun shutting down all power in Manhattan … lights out in Greenwich Village … SoHo … Lower East Side …. Statue of Liberty…

UPDATE 8:  The East River continues to surge over its barriers. This is 34th St and First Avenue in Manhattan, almost in MidTown [pic by Robert Wenzel]:

UPDATE 9:  National Data Buoy Center reports winds are mercifully well below the 72 knots that would mark a hurricane, none of their stations recording over 50 knots.  Hat tip Willis Eschenbach who says, “Please note that the big damage from such storms is the flooding, so I am not minimizing the likely extent of the damage.  It will be widespread. However … not a hurricane.”

UPDATE 10: Still windy, however: “So The Front Of A Building Blew Off In NYC.”

UPDATE 11: Three feet of water on trading floor of NY Stock Exchange. May be shut down for weeks. [Hat tip @AmberLyon]  Oops. No. CNN (who had made the claim) redacts.

UPDATE 12:  Uh, Con Edision hadn’t been “shutting down” power. Turns out there was an explosion at the Con Ed Plant E14th and FDR Drive! [Hat tip Lyndon Hood]

UPDATE 13:  WCBS reports the storm surge at Battery Park (Lower Manhattan) has begun to recede.

UPDATE 14:  Salt Water Puts NYC Subway "In Jeopardy"