I want to know what the hell White House economic adviser Ben Bernanke is smoking, because he seriously needs a reality check. Here’s what he had to say about the economic impact of Hurricane Katrina:
“Clearly, it’s going to affect the Gulf Coast economy quite a bit,” Bernanke told CNBC television. “That’s going to be enough to have at least a noticeable or at least some impact on the aggregate (national) data.
Ok, so the hurricane really whacked the Gulf Coast, but is this going to affect the economy in a good way or bad? Listen to this pearl of wisdom to see if you can tell:
“Looking forward … reconstruction is going to add jobs and growth to the economy,” he added. “As long as we find that the energy impact is only temporary and there’s not permanent damage to the infrastructure, my guess is that the effects on the overall economy will be fairly modest.”
Modest, but uh… that’s going to be modest economic growth?
HELLOOOO… MC-BERNANKE… THE CLUETRAIN FROM 1850 JUST ROLLED INTO TOWN… This was already firmly rebutted back in 2004 by TownHall, but listen up:
Why are Florida’s hurricanes a “plus”? It’s simple. According to St. Petersburg Times reporter Joni James, “Construction creates thousands of jobs, insurance provides for billions in consumer purchases, and new facilities built to higher standards might help offset future storm-related losses.”
…Bastiat wrote a parable about this that has become known as the “Broken Window Fallacy.” A shopkeeper’s window is broken by a vandal. A crowd forms, sympathizing with the man, but pretty soon, the people start to suggest the boy wasn’t guilty of vandalism; instead, he was a public benefactor, creating economic benefits for everyone in town. After all, fixing the broken window creates employment for the glazier, who will then buy bread and benefit the baker, who will then buy shoes and benefit the cobbler, and so forth.
Those are the seen effects of the broken window. What’s unseen is what the shopkeeper would have done with the money had the vandal not broken his window. He might have employed the tailor by purchasing a suit.
And that is why hurricanes NEVER help the economy, no matter how hard some White House adviser blusters on about it.
PWNED. CHOO CHOO!