August 24 2011
Krugman on the Earthquake
Yesterday evening, Paul Krugman posted the following message to his Google+ profile, in reference to the Great DC Earthquake Disaster of 2011:
“People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.”
- Krugman is correct in his assertion that Michael Bay-scale natural disasters usually spur economic activity as reconstruction takes place…
- …but he is wrong to call this activity "growth" in the real sense of the term. National statistics may show nominal growth in GDP, but…
- …no actual wealth or would be created, and people would be worse off than before the disaster.
At least we can be encouraged by the number of comments calling Krugman out on his bad analysis - many of which received more “+1” votes than Krugman’s original post, even!
See also: Broken Window Fallacy, The
(H/T: Jim Harper)
UPDATE: New information suggests that the Paul Krugman causing a stir on Google+ isn't the real Paul Krugman after all. In the words of the spoofer:
I am not ashamed of what I have said in Paul Krugman’s name on Google+. It is but an example of the many misguided beliefs that Paul Krugman holds, defends, and espouses on a daily basis. It is a shame that based on Paul Krugman’s reputation, I can write a statement about the East Coast earthquake as I did above and many of Krugman’s supporters would defend it and share it with others.