Monday, September 27, 2004
USA Today and the Broken Window Fallacy
Over on Marginal Revolution, Tyler Cowen notes this USA Today article by Barbara Hagenbaugh that discusses the economic impact of the hurricanes on Florida. The article in the money section of the paper includes this stunning passage that apparently brought Tyler to the verge of tears.
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Although natural disasters spread destruction and economic pain to a wide variety of businesses, for some, it can mean a burst in activity and revenue.
For that reason, economists tallying the numbers expect the hurricanes will be neutral in their effect on the U.S. economy, or may even give it a slight boost, particularly because of an expected reconstruction boom in the already red-hot construction industry.
I'm not crying. I'm merely contemplating sending Hagenbaugh a copy of Frederic Bastiat's That Which is Seen, and That Which is Not Seen.
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