[pianotech] Sandy's impact on our business

[Susan Kline]

I think that the people writing that article are guilty of some sloppy 
thinking. Part of
the trouble stems from how "GDP" is counted. Anything that gets paid for 
is considered to
be part of the Gross Domestic Product. That doesn't mean that everything 
counted is equally
of value. The lost airplane flights and restaurant meals were just 
consumption, non-productive.

If destruction were all that was needed to "stimulate the economy", then 
all we have to do
is get people out of harm's way and send the Air Force to bomb our 
cities to the ground. We'd
all be rich for years ...

This "we'll all be rich from rebuilding" is an example of something 
called the "Broken
Window Fallacy." All the money that workmen and emergency crews and home 
supply stores are
earning HAS COME FROM SOMEWHERE ELSE. It comes from insurance companies 
who will have to
raise their premiums so we all pay more for insurance. It might well put 
some of them out
of business. If such storms are more and more frequent, insurance will 
be difficult to find
at all, let alone afford.

If it is paid for by government emergency funds, then it gets added to 
our deficit. That
deficit will make us pay more in interest to keep it rolling along, and 
if we have other
needs (like food inspection, education, the NIH, the court system, food 
stamps for the unemployed,
and roads and bridges) they will have to go short or be postponed.

If the cost of rebuilding is borne by the people whose houses were 
destroyed, then the
money will come from their savings. This money (if they were in the 
black) will not be
available for investing in industry or businesses. They will not have 
the income from
this money to spend on other things. If they were in debt already, this 
could bring a lot
of them into bankruptcy. Then their creditors lose.

The money for rebuilding has to come from somewhere, and the only kind 
of rebuilding
which makes sense is "hardened" against future storms. There could be 
some efficiency gained
by intelligent rebuilding, but it will all have to be paid for.

Money spent on wallboard, wiring, and plumbing is unlikely to be spent 
on piano tuning --
even if they still have a working piano.

A lot of the damage, especially to vulnerable low-lying areas in New 
Jersey, will
probably never be rebuilt to what it was before the storm. The people 
who lost their
homes will of course be looking for other homes to buy or rental 
accommodations. It
will keep realtors busy. But for those who lost homes, their net worth 
will be less
than before, not more, even if they were covered by insurance. Many 
weren't. And
city budgets will be strained to the breaking point even if they get 
federal aid.

Just my opinion, and I'm extremely glad that it wasn't my area which was 
ruined.
Oregon may have a severe earthquake just off the coast (we're overdue 
for a big one),
and there might be a Japan-style tsunami from it. Even if the water is 
unlikely
to reach as far inland as I live, coastal towns and parts of Portland 
could be
devastated. If the middle of the country continues to have terrible 
droughts,
tornadoes, and floods, the Gulf continues to have hurricanes, and now 
the East
Coast is vulnerable more and more often -- well, we have to adjust as 
well as
we can, but we all will be poorer, not richer.

Susan



tnrwim at aol.com wrote:
> Right after Sandy hit, I made the comment that the storm might be the 
> shot in the arm this country needs to get out of the economic 
> doldrums.  What I meant by the comment was that while we are not 
> necessarily going to see a direct impact on piano tuning 
> and repairing, although we will get some of that. But more importantly 
> we are going to see the "ripple" effect of the total economic impact.  
> Construction workers, plumbers, electricians, etc, are going to make 
> more money. They will, in turn buy new cars and appliances. Those 
> sales people will go out to dinner more often. Etc. Etc. All along the 
> way, more people will have more money to spend on goods and 
> services that are near and dear to them that will directly effect us, 
> everywhere from getting the piano tuned more often to actually buying 
> a new piano. It might take a couple of months, or even years, but we 
> are in for a good couple of years. Even I will feel that impact as 
> people will earn enough money to take a much needed vacation to 
> Hawaii, where they will go out to dinner, and leave a big tip for one 
> of my customers.
>  
> For a more detailed explanation of the effects of Sandy, read the 
> following article in Bloomberg News.  
>  
>  
> http://www.bloomberg.com/news/2012-11-23/sandy-seen-boosting-u-s-with-as-much-as-240-billion-rebuilding.html
>  
> Wim
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