After every disaster, no matter how obviously bad, there’s always an economist (just as in Bastiat’s story) who is prepared to suggest that there’s an upside.
Thus in the New York Times do we read: “Indeed, after the damage from the fires has been sustained, there can be a lift to the economy as people rebuild their homes and restock them with clothing and furniture. ‘There’s kind of a perverse stimulative effect,’ said Michael Bazdarich, director of the forecasting center at the University of California at Riverside. ‘As a society, we’re worse off because of the fire,’ Dr. Bazdarich said. But economic statistics look at output, he added, and that ‘records an uptick’ because of rebuilding.”
Perhaps even more should have burned: “Even that uptick, he said, may be small, if the number of houses that must be rebuilt stays at about 1,100. There are roughly 70,000 homes being built in Southern California this year, Dr. Bazdarich said.”
(He is of course right about the effects on data, which only underscores their artificiality)
Next: why bombings are good for Baghdad’s economy.
