is Sandy good for the economy?

[trailmonkee]

I am not an economist in the slightest.... But i do know that a lot of work was had in my Colorado neighborhood after we were hit by a destructive hail storm.... Seemed like there were a lot of insurance dollars released into the community.... And those that didn't have insurance had to replace their roofs by pulling cash that would have been left untouched if it weren't for the storm.

Obviously, on a much grander scale, wouldn't the same thing be true as a result of Sandy? Mostly by banked dollars being released into the economy via insurance companies and individuals? Also through additional labor needed to repair, replace and rebuild?

[elleng]

1. No, she's a 'net' drag, as are all such disasters.

Jobs 'created' to remedy the mess, but loss of existing jobs outweighs those. (Heard it discussed.)

[Iggy]

5. What existing jobs are (permanently) lost?

if you're talking retail jobs, I'd say that's not much of a "loss" since most pay min wage,
or slightly above min wage.

as one retail business closes or struggles with re-opening, others are opening, and the
retail workers who may have lost jobs due to the storm are there to fill these jobs.

[NoOneMan]

2. "I am not an economist in the slightest"

Good. You are one step closer to getting it.

Basically, only if the work done to repair outweighs the loss of work the region was capable of (over some time), then it would be a boon. Every disaster is different, but I would suggest that any that damage the most amount of personal properties with the least amount of infrastructure damage would have the best chance of coming up on top (commerce is then disrupted the least and the most amount of people are able to contribute to production via insurance disburstments). Sandy seems to have dismantled everything.

[Scootaloo]

3. Well, there's a few ways to approach it.

if you go purely by GNP, hell yeah, Sandy's awesome. So is a nuclear meltdown and a sudden outbreak of smallpox. Anything that generates some sort of commerce is "good for the economy" if you measure by GNP, including disasters.

[TreasonousBastard]

4. Nah. Other comments have the right idea...

Probably a quick jump in monthly output, but that could be undermined by all the business lost in damaged areas. Personal and business buying will be high replacing things and moving around, but that's just less money that will be spent elsewhere, probably for Christmas. And the stuff businesses buy will be replacing product they already bought but were never able to sell.

The net result after all the real losses are taken into account will probably be a GDP bump but an actual economic loss when everything is taken into account.

BTW, that insurance money... much of it will be reinsurance from around the world. Insurance companies pay big bucks for catastrophe reinsurance, and the premiums are part of the trade loss, but when they come back in claims will figure as a trade gain and reduce the expected annual trade loss.

[HiPointDem]

6. By that rationale, we should all go out and vandalize something.

[baldguy]

7. This is the "broken window" fallacy.

All of the economic activity needed to replace a broken window would be better used to create a second window instead, if the first had not been broken.

http://en.wikipedia.org/wiki/Parable_of_the_broken_window

[Prometheus Bound]

8. Thank you for clarifying that.

I cringe when people try to argue this is a good thing for the economy.

[trailmonkee]

11. thanks

[Festivito]

9. I say, sadly yes it is good for the economy.

Understand, it is not good for human progress. It means less for research, that is less for health, less for understanding, less for improving our condition. But, these things are not measured when we use the word economy.

What this sad event will do for a short time is take money out of the hands of our overly-rich and put it into the hands of those who work and toil to do good things for us. These many workers will frequent restaurants, buy cars and buy supplies changing our current rich-poor economy to a slightly-less-rich slightly-less-poor economy for a short time.

The loss of progress will not be measured and therefore not counted as loss.

[MrScorpio]

10. I don't subscribe to the economic theories of Jean-Baptiste Emanuel Zorg

Instead, I think that "Chaos, disorder and destruction" brings exactly that and only that.

[trailmonkee]

12. thanks