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A Fired-up Economy

Posted By Don Boudreaux On November 7, 2012 @ 10:53 am In Myths and Fallacies,Seen and Unseen,State of Macro | Comments Disabled

Here’s a letter to the Denver Post:

Tom Zwirlein, director of the Southern Colorado Economic Forum, says of this summer’s Waldo Canyon fire – the most destructive in Colorado history – that “There are some good things that could happen.  It could help us out quite a bit” (“Waldo Canyon fire could bring economic benefits [1],” Nov. 6).  Your report continues: “Rebuilding will generate about 436 net new jobs, $103 million in new income and $3.9 million in sales and use taxes for local governments over the next five years, the forum estimates.”

If destroyed homes and ruined infrastructure generate real economic blessings, then citizens of communities and countries with plentiful, excellent, and intact housing and infrastructure should lament their misfortune.  After all, by having on hand large stocks of productive assets that no longer need to be built, these people are denied the additional jobs, income, and taxes – the “economic benefits” – that the lucky citizens of southern Colorado will now enjoy, courtesy of a devastating fire.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

(HT Ross Kaminsky and Frank Stephenson [2])

Making matters worse, the Denver Post report identifies Tom Zwirlein as an economist.  Sigh.

But perhaps it’s time that we here at the Cafe remove our Bastiatian blinders and come to see that destruction really is a serious source of economic benefits.  Blinders removed, we see that there is no need to wait for nature (such a mercurial mistress!) to deliver economic blessings in the form of hurricanes, floods, wildfires, and the like.  We can, with our superior understanding that the chief source of wealth is spending money, help nature along.

Let’s begin by rewriting building codes.  From now on, all such codes should penalize builders who construct homes, offices, warehouses, and other buildings to last longer than, say, a year.  Builders guilty of the crime of constructing buildings that withstand damages from the likes of spring rains and autumn breezes should be fined in order to ensure that all Americans have ready access to economic blessings of the sort delivered by the Waldo Canyon fire.

Also, voters – always wise, for vox populi is indeed vox dei - should demand of their government that every road, bridge, tunnel, harbor, and other piece of infrastructure built from here on in be designed to crumble as soon as possible.

The economy will benefit.  Must be so, for that is what we are repeatedly told.

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URLs in this post:

[1] Waldo Canyon fire could bring economic benefits: http://www.denverpost.com/wildfires/ci_21936416/waldo-canyon-fire-could-bring-economic-benefits

[2] Frank Stephenson: http://divisionoflabour.com/archives/2012_11.php#008078

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