Posted tagged ‘Hurricane Sandy’

A Tornado vs.The Fed, Which Is More Destructive?

May 27, 2013
Shamrock Texas Tornado

(Photo credit: Wikipedia)

DESTRUCTION DOESN’T CREATE WEALTH.

It’s been a week since the tornado went through Moore Oklahoma and I have yet to see an article or comment by an “economist” saying that the destruction by the tornado will help the economy and create jobs. This is what was said after Hurricane Sandy hit New Jersey and New York, read here and here. We showed the errors of this analysis in this post titled, Hurricane Sandy and the Broken Window Fallacy. But like all shallow thinking,  this fallacy will never be put to rest once and for all, so let’s be ready to shoot it down when it rears its head again.

Let’s look at the similarities and the differences between the destructive power of this tornado, and the destructive power of the Fed and the Government. It’s a version of the broken window fallacy. (more…)

Hurricane Sandy and the Broken Window Fallacy.

November 2, 2012

The economic ignorance of “experts” is demonstrated in the aftermath of Hurricane Sandy. The fallacy that it will be good for the economy because it will create jobs, is trotted out every time a natural disaster hits. The economy as a whole is less wealthy because of a disaster, because everything that is destroyed has to be replaced just to get back to even par.Scarce resources, capital, labor, and time that could have been used for new production, has to be used to rebuild or replace what was destroyed. How long will it take for a country like Japan to get back to where they were before the tsunami hit? We have to reteach the broken window fallacy every time a natural disaster hits.

Go to the Broken Window Reader by Daniel J. Sanchez at Mises.org for more videos and articles. Then read this in-depth analysis, The Broken-Window Fallacy by Robert P. Murphy also on Mises.org.