“In the odd nature of economic accounting, this will probably be a stimulus,” said Alan Gin, a University of San Diego economist. “There will be a huge amount of rebuilding in the next
couple of years, financed by insurance payments.” LATimes
(Thanks to Minnesota Chris)
{ 13 comments }
Another winner
The nonsense that continues to pass for economic analysis, even amongst professional economists, is amazing.
Perhaps Alan Gin would figure it out if somebody broke one of his windows, and see how much economic development comes of it (not a serious threat, just a mind experiment)…
It’s precisely BECAUSE they’re “professional” economists that they continue to peddle this nonsense. They’re boot-licking careerists paid to serve certain interests other than the truth.
There is nothing wrong with this statement. If, by economic accounting, Dr. Gin means the literal measure of output in LA County, then he’s 100% correct. Having to re-build homes and other damaged buildings will result in more measured economic activity.
However, as anyone who has read Bastiat knows, there is a great different in what is seen (the measure of economic growth) and what is unseen (the other goods that could have been made with those resources).
But, there is nothing in the article that would suggest Gin is not fully aware of this fact. Indeed, there is not much of Gin’s oppinion at all. Now, being the kind of guy I am, I will give the PhD economist the benefit of the doubt. Of course, some people with thinner skins (and more to prove) wont.
Tootles.
“They’re boot-licking careerists paid to serve certain interests other than the truth. ”
They are not. They are brains that have absorbed a cultural book that was probably so immersed in useless mathematical models that they fail to see the obvious. Check out these future economorons from harvard below:
http://youtube.com/watch?v=fcN9ypgjApQ
I think this video is a classic. They are already so immersed in econobable. A layer almost too think to recover from, but not really.
I once pointed out to a friend that a really good bit for a stand-up comedy routine would be pointing out how saying that war and destruction are good for the economy is like saying that genocide is good for the economy and that the Holocaust was great because it created jobs for barbed-wire manufacturers, security guards, and oven cleaners. It would’ve been shocking, controversial, somewhat smirky, and pointed out a lot of the bullsh*t that some push down us.
I haven’t fully thought this through (meaning I’m sure there is a flaw in here somewhere but I don’t see it yet), but it seems to me that this will help save the central banks. All their inflating over the years has driving far more money into home building than a free market would need. Now the collapse is on us. Those who lose their house to fire will get paid off (hopefully by insurance, but I suspect government will do far too much), and many will move to one of the houses now on the market that are not sold. Meanwhile their house is not rebuilt. Thus helping solve one problem the central banks created.
“… many will move to one of the houses now on the market that are not sold. Meanwhile their house is not rebuilt. Thus helping solve one problem the central banks created.”
And the money spent buying these homes can not be spent on whatever it would have been spent on … thus creating a corresponding slump in a new market(s). This is the unseen loss — the purchase that would have been… (sounds like Rush or Metallica lyrics … sorry)
NPR’s Marketplace made the same error today (paraphrasing) — “it may end up being an economic shot in the arm. Contractors will go back to work and the housing slump may be alleviated.” Hooray for destruction. We should level the whole earth if we really want
prosperity.
@Henry Miller:
Given your thought, what odds would you give that the “Land Bank” program would be retooled as a program of subsidized arson?
(Say what you like about the ’70s South Bronx denizens, but they had a certain political astuteness…)
Hooray for destruction. We should level the whole earth if we really want prosperity.
We’re well on the way, Fred, for many important resources that have not been subject to effective ownership regimes.
But apparently destruction is good for economic activity, and just think about the “lost gains” from dampened “economic growth” if we were ever to invest in appropriate institutions.
In the case of wildfires, as I’ve noted on Lew’s first thread, we are in for an extended burst of economic activity due to lengthening fire seasons in the west. Yippee!
TT
Student says:
There is nothing wrong with this statement. If, by economic accounting, Dr. Gin means the literal measure of output in LA County, then he’s 100% correct. Having to re-build homes and other damaged buildings will result in more measured economic activity.
This is a great point. A boon to the local economy at the trade off of goods and services elsewhere and a tade off of potential future goods and services that haven’t materialized yet.
that’s like saying 9/11 was a great day in the war on terror because 19 terrorists died. No rational person considers that a good tradeoff. 19 dead jihadists vs 3,000 americans dead and resulting 5 + years of hell
Comments on this entry are closed.