Reconstruction Does NOT Lift Economy After Disasters

Michael Cooper in the Clueless Times:

But a new phase is slowly beginning in some hard-hit areas: reconstruction, which past disasters show is typically accompanied by a burst of new, and different, economic activity. There is no silver lining to a funnel cloud, as anyone who survived the tornadoes can attest, but reconstruction can help rebuild local economies as well as neighborhoods.

No it does not.  It has just destroyed the productive capability of the region.  People are dead, buildings that housed people are gone and the people who survived are homeless.  How productive are those people if their daily routine is destroyed, they can’t sleep as soundly, and they now have to spend money on re-building something instead of building or investing in something new?  Factories and offices where people worked are gone, i.e., the place where people created wealth, created and built things, thought through plans, and shared ideas are gone.  This is like smashing someone’s PC then telling them to build one or buy another one.  While they are building their tool or waiting for it to be delivered, they are not doing their regular job.

As well, savings and investment are used to re-build something that existed and worked instead of investing in something new. Re-building after a disaster gets the economy back to square 1, to where it was before.

The economic profession calls this thinking the Broken Window Fallacy.  The derogatory term is ignorance.  As you can see, this balony ticks me off.


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