{SPAM 01.8} Re: [FoRK] In the face of record profits and disaster

James Tauber jtauber
Thu Sep 1 19:48:37 PDT 2005


On 02/09/2005, at 9:41 AM, Russell Turpin wrote:

> Beberg:
>
>>> GPD growth for the 4th quarter will be great. ..
>>>
>
> James Tauber:
>
>> Go read Bastiat[1]. Spending after disasters doesn't help the  
>> economy as a whole..
>>
>
> And what does that have to do with GDP?

Well Adam's next line was 'If anything, this "disaster" has saved the  
economy.'

He may have been being satirical but a lot of people who are saying  
things like this aren't. Keynes is alive and well.

> Bastiat
> correctly points out that repairing a window diverts
> resources, had that window otherwise not been
> broken. This is an argument not from opportunity
> costs, which always are present, but about the
> importance of counting capital.

It does show the importance of counting capital, but I maintain it's  
still primarily about opportunity cost.

> GDP doesn't do
> that. To the extent that Bastiat is correct, the
> GDP counts wrongly.

Agreed. And to the extent that Beberg was pointing this out, I agree  
with him and take back my buzzer.

James



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