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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.<br>
<br>
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.)<br>
<br>
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 - <a
href="http://freedomkeys.com/window.htm">http://freedomkeys.com/window.htm</a>
in it is contained a clear explanation relevant to this discussion.<br>
<br>
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.<br>
<br>
Steve<br>
<br>
<br>
<br>
<div class="moz-cite-prefix">On 11/26/2012 8:44 PM,
<a class="moz-txt-link-abbreviated" href="mailto:pianotech-request@ptg.org">pianotech-request@ptg.org</a> wrote:<br>
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cite="mid:mailman.4052.1353984275.4133.pianotech@ptg.org"
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<p class="MsoNormal"><font color="black" size="2" face="Arial"><span
style="font-size:
10.0pt;font-family:Arial;color:black">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.<o:p></o:p></span></font></p>
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<p class="MsoNormal"><font size="3" face="Times New Roman"><span
style="font-size:
12.0pt">Chuck</span></font></p>
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