Gene Callahan is irritated with those of us who complain about all the talk of how hurricane Sandy might well have positive economic benefits – or, at least, how that natural disaster might spark positive movements in conventional economic variables that are used to gauge the vigor of economic activity. Gene writes:Most economists who write a “There is a silver lining” op-ed are really doing no more than is a preacher who tries to raise the spirits of his flock after a disaster: if we all pull together, we can come out of this even stronger! Really, must those croaking “broken window fallacy” appear, like an army of grim spring peepers after the first thaw, every time an economist tries to be not entirely dismal?
Economics is about the real world – or at least non-economists who hear or read pronouncements from people called “economists” will assume that these economists are making statements about the real-world.
So when economists speak to the general public, they are duty-bound to be cognizant of the public’s biases and to communicate in ways that do not reinforce those biases but, instead, have some prospect for correcting those biases.
So economists who communicate with the general public in ways that reinforce the general public’s biases are performing a grave disservice ..
Morici and many other pundits are telling the general public that natural disasters have some fine economic benefits .. the general public hears people titled as “economists” reinforcing the atavistic biases that swarm in most non-economists’ minds: anything that revs up spending makes the economy better off! And because significant natural disasters will rev up spending significantly, lo and behold we might actually be made economically richer over time by such natural disasters!
If Peter Morici and like pundits are preachers seeking to comfort people in harsh times, they are doing so with an utterly flawed, misleading, and destructive creed. That’s a religion that deserves to lose its congregation.