[pianotech] O.T. Sandy's Effect On Our Business

[Mike Spalding]

List,

Chuck's comment refers to a "long term" positive effect on our economy.  
Someone else referred to a positive effect on the "regional" economy.  
Bloomberg used neither of these qualifiers. This may seem like 
nit-picking (alright, I AM nit-picking), but the difference between long 
term and short term, or regional and national, can turn a true statement 
false or vice versa.  I am grateful for the existence of this thread, as 
it has given me the opportunity to think about the economy in new ways.  
I won't burden you with my opinion on the Bloomberg piece.  But the next 
time some pundit or politician says that something will "help the 
economy", ask yourself which economy he's talking about, and whether the 
effect will be long term or transient.

cheers

Mike

On 11/26/2012 10:07 PM, Steve Brooks wrote:
> Chuck's got it right. If Bloomberg's writers think hurricane Sandy 
> will have a net positive effect on the economy, and I haven't read 
> their analysis and do not assume that they do, then they are 
> pig-ignorant about economics.
>
> Many people make the mistake of focusing on only what is seen while 
> remaining blind to that which is not seen. In this case, what is seen 
> is the work being done to repair the damage from the storm. What is 
> not seen is where the money spent to repair the damage would have gone 
> instead. In the end the world is net short all of the resources, 
> assets and value of that which was destroyed. Money that would have 
> been spent elsewhere must now be used to repair damage and replace 
> lost assets. (By the way, GDP is a poor measure of economic benefit. 
> It is merely an accounting identity. While it may account for the 
> increased activity resulting from storm or war, it does not account 
> for the losses due to those events.)
>
> There is a wonderful book out there - "Economics in One Lesson" by 
> Henry Hazlitt. I recommend it to every entry level student in 
> economics and to friends in general. In Chapter II he writes of the 
> "Broken window fallacy." It is quoted here - 
> http://freedomkeys.com/window.htm in it is contained a clear 
> explanation relevant to this discussion.
>
> I seldom comment on this list because I am a hobby piano tuner and 
> have little to add to the discussion. Every now and then I do comment 
> on things that are usually off topic. I am a professional economist, 
> now retired, tinkering with my piano. Hazlitt puts this fallacy to 
> rest in three paragraphs. The rest of this tiny volume contains 
> chapters equally as pithy and revealing. I keep a small cache of 
> copies and give them away as gifts. I hope everyone on this list reads 
> it. If they did, the members of this organization would have more 
> economic knowledge than the majority of financial reporters regardless 
> where they are employed.
>
> Steve
>
>
>
> On 11/26/2012 8:44 PM, pianotech-request at ptg.org wrote:
>>
>> It seems to me that if Sandy or Katrina will have a long term 
>> positive net effect on the regional economy, then we should encourage 
>> vandalism and arson because it would do essentially the same thing.
>>
>> Chuck
>>
>

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