More bad economics. Bad logic leads to bad conclusions. There are some claiming that the destruction will cause an increase in jobs but this fallacy was described over 150 years ago by Bastiat. Williams tries to set it straight….. again.
As reported in "Gas Crisis Looms" (Aug. 31, 2005), written by CNN/Money staff writer Parija Bhatnagar, Mr. Chan said, "Preliminary estimates indicate 60 percent damage to downtown New Orleans. Plenty of cleanup work and rebuilding will follow in all the areas. That means over the next 12 months, there will be lots of job creation which is good for the economy."
Bastiat wrote a
parable about this which has become known as the "Broken Window Fallacy." A shopkeeper's window is broken by a vandal. A crowd formed sympathizing with the man. After a while, someone in the crowd suggested that 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 repairing the broken window. What's unseen is what the shopkeeper would have done with the money had the vandal not broken his window.
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