In a desperate attempt to fabricate any good economic news, The Times has put forth one of the oldest and easily refuted notions in economics. LINK:
The deadly tornadoes and widespread flooding that have left a trail of death and destruction throughout the South and the Midwest have also disrupted dozens of local economies just as the unsteady recovery seemed to be finding a foothold.Apparently neither the writer nor his editor have heard of the term Opportunity Cost or the Broken Window Fallacy.
But a new phase is slowly beginning in some hard-hit areas: reconstruction, which past disasters show is typically accompanied by a burst of new, and different, economic activity. There is no silver lining to a funnel cloud, as anyone who survived the tornadoes can attest, but reconstruction can help rebuild local economies as well as neighborhoods.
