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Destruction Is Not A Stimulus

Destruction Is Not A Stimulus

I’ve been hearing and reading—supposedly from “experts” who should know better—that the silver lining in this horrible natural disaster that has settled over the Eastern Seaboard is a rise in demolition, construction, and repair jobs. “Contractors are loaded with work,” one newscaster breathlessly intoned.

But destruction doesn’t engender growth. The money has to come from somewhere and it was not budgeted. These aren’t new homes and roads being built or new jobs created that will last. This is a temporary surge for some people who happen to have certain skills and careers.

One estimate is that Sandy caused $50 billion in damage and will knock a half-point or so off our annual growth rate. We’re not talking about some silver lining here, or some light at the end of the tunnel. I wouldn’t try telling that to the poor people in two-hour lines to get gas; without power and water and heat; displaced from their homes; who lost businesses; and who lost loved ones.

We will get through this disaster as we always do, but not without huge and often permanent loss. This is no blessing in disguise, no hidden benefit. Make no mistake about it. Destruction is not a stimulus.

© Alan Weiss 2012

Written by

Alan Weiss is a consultant, speaker, and author of over 60 books. His consulting firm, Summit Consulting Group, Inc., has attracted clients from over 500 leading organizations around the world.

Comments: 12

  • Wes Trochlil

    November 2, 2012

    See Frederic Bastiat.

  • Alan Weiss

    November 2, 2012

    Maybe you could summarize what you find interesting about him, so I don’t have to spend the afternoon doing research!?

  • Wes Trochlil

    November 2, 2012

    Bastiat wrote an essay called the parable of the broken window, in which he explained that destruction is not an economic benefit to society. Also known as the broken window fallacy, the idea being that if you break windows, then that’s good because you need to employ a windowmaker to replace it. This ignores the opportunity cost of that money NOT being spent on something else.

    • Alan Weiss

      November 2, 2012

      Thanks for the Cliff’s Notes, I’m in good company!

  • Dennis Snow

    November 2, 2012

    Silver lining comments usually come from those not truly effected by the disaster. A friend of mine says, “Nothing is impossible for the one who doesn’t have to do the work.”

  • Alan Weiss

    November 2, 2012

    I think Hemingway said, “When you’re cold, don’t expect sympathy from someone who’s warm.”

    • Paul Gibbons

      November 2, 2012

      I think that was Solzhenitsyn, in “One Day in the Life of Ivan Denisovich”

      • Alan Weiss

        November 4, 2012

        I just looked it up in my quote collection and you are exactly correct! Nice job, and thanks!

        • Joseph

          November 4, 2012

          Just curious: how do you manage your quote collection. By now, it should be a huge one.

          • Alan Weiss

            November 4, 2012

            I have to have read or heard them personally. I use Filemaker Pro, and I cross-index them by category. Very simple.

  • Peter McLean

    November 3, 2012

    Undoubtedly the same kinds of people who report in the NY Times (and from the White House) that a rise in unemployment from 7.8% to 7.9% is an indication that the US economy is growing and is a positive sign of recovery. Sheesh!

    Hope you and your families are all well over there on the storm front.

    • Alan Weiss

      November 3, 2012

      We’re all well, thanks. I don’t know how politicians can look at anyone with a straight face. Everyone has a plan, but no one has results.

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