Make No Mistake About It: Hurricane Sandy Was Not Good for the Economy

There seems to be a dangerous myth circulating around the media in the days following Hurricane Sandy.

A Yahoo! Finance poll asked readers whether the effects of Sandy would hurt the American economy, benefit it, or prove negligible. The most popular answer by far, with 47% of the vote, was that the economy would benefit from the destruction.

Here's what some other commentators had to say.

Derek Thompson at The Atlantic says, "More significantly, the aftermath of the storm requires 'replacement costs' that raise economic activity by forcing businesses and government to rebuild after a destructive event."

Derek, do you lose things on purpose so you can pay the replacement costs?

Here's Peter Morici of The Street: "Disasters can give the ailing construction sector a boost, and unleash smart reinvestment that actually improves stricken areas and the lives of those that survive intact."

Really Peter? How about New Orleans post-Katrina? Or any other disaster area, for that matter?

On Wednesday night, Susie Gharib of PBS's The Nightly Business Report posed the question to Mark Zandi of Moody's Analytics, saying: "People often hear that when there's a disaster like Sandy, it's a boost for the economy. Is that going to be true in this case?"

Zandi set her straight, responding simply, "Well, no, this is a natural disaster, and disasters are bad for the economy."

Thanks, Mark.

Of course, some businesses benefit, as happens whenever the normal balance of supply and demand is skewed. Stocks of home improvement retailers like Home Depot (NYSE: HD  ) and Lowe's (NYSE: LOW  ) rose a few points on Wednesday, while generator maker Generac (NYSE: GNRC  ) jumped 20% on Wednesday. Well, duh -- they make generators, which become immensely more valuable when the power goes out.

But the real problem with this misconception is that it reveals a fundamental misunderstanding of the basic tenets of capitalism. Free markets work because they value the efficient use of labor and capital above all else, which in turn encourages innovation and raises the standard of living for everyone as consumers choose the products and services that offer them the greatest benefits at the lowest costs.

Economic activity for the sake of economic activity does nothing. If disasters like Sandy actually benefited the economy, then we could just go out and destroy houses on our own. There's no need to wait for Mother Nature.

Part of this misconception is tied to an over-reliance on GDP and the obsession with "jobs" as indicators of a healthy economy. GDP is a strict measure of economic activity and does not take into account issues like quality, inefficiency, or corruption. The estimated $50 billion in losses from the storm, between property damages and closed businesses, will not be subtracted from GDP, although the costs paid to repair property will be added to the figure. Harvard Business Review columnist Umair Haque once quipped, "Hey, if you want to boost GDP, go out and break your neighbor's arm."

Similarly, jobs are only good for the economy when they represent an efficient use of labor. Replacing or repairing something already in existence might be necessary, but we'd be better off avoiding it in the first place.

This misconception also seems to have a historical origin. Many Americans believe that World War II was what really got us out of the depression, but that notion oversimplifies a much more complex series of events. Our government borrowed a record amount of money to pay for the war, which acted as a stimulus to jolt us out of recession as the war provided jobs that were previously unnecessary. We were able to avoid destruction on our shores, while Europe and Asia lay in ruins, which left us the world's unscathed free-market superpower. This allowed us to evolve into a manufacturing powerhouse and thus enjoy the prosperity of the '50s and pay back that massive debt. The war only "benefited" the economy in the context of a much larger chain of events.

So with the election just a few days away, this seems like a good time to step back and recognize what's actually good for the economy. Innovation and efficiencies that raise the standard of living and productively grow the economy are good. Natural disasters are bad. Employment alone is not a sign of a healthy economy. After all, our ancestors had their own word for employment. They called it survival.

Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend The Home Depot and Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On November 03, 2012, at 12:07 PM, sharpx2 wrote:

    >>Free markets work because they value the efficient use of labor and capital above all else, which in turn encourages innovation and raises the standard of living for everyone as consumers choose the products and services that offer them the greatest benefits at the lowest costs.<<

    The first thing to understand is that 'free' markets don't always work. Problem number one: most of these markets are not free; they are controlled by a handful of companies that ply politicians with money so that their selfish agenda can be promoted.

    Second, the interest of capitalists is not always to act in the interest of the populace in general. You could say that Bain Capital uses capital efficiently, but they cause unemployment which contributes to spiraling the economy downward. Or drug companies use their monopoly position on patented drug formulations to milk the public (and the government) for out-sized profits. Sure they have R&D costs in the billions, but these don't make much of a dent in their net profits. So sick people are either denied access to such drugs, or somebody (you through your insurance policy) picks up the bill.

    So even though I love the sound of your high-flying free market model and your reasoning that disasters make for inefficient use of capital, I hardly think that an economy ruled by the so-called free market is going to run in the most efficient manner. In fact it will generate the most profit for investors, often at the expense of every-day people, who still do the heavy lifting in our economy.

  • Report this Comment On November 03, 2012, at 12:11 PM, maiday2000 wrote:

    Good article, but how could you write an entire essay on this subject and not even bother to mention the theoretical underpinnings for this ("the broken window fallacy") nor cite the Austrian theorist who penned it way back in 1850, Frédéric Bastiat? This foolish economic thinking has been around for a long time, and it is sad that supposedly "smart" journalists at publications like "the Atlantic" possess the ignorance to even utter stupid things like this.

  • Report this Comment On November 03, 2012, at 12:21 PM, akaluna wrote:

    Mr. Bowman you are right on. This was an excellent quick review of free markets.

    Sharpx2 forgot to mention that Bain Capital created a huge number of jobs as well through the free markets that you have so eloquently described.

    Only in America can a drop out become CEO of a large corporation! Long live capitalism!

  • Report this Comment On November 03, 2012, at 12:27 PM, JoeyPass wrote:

    Overall the perspective is spot on. One rationale left out however is that even though dollars are spent on the restoration efforts, this money is not put to use where it could have been used for more productive activities and the jobs created are only of a temporary nature.

    The comments on the free market not working and being controlled by only a select few who "ply politicians with money" is only true for certain sectors of the economy, By and large the free market does exist and works fairly well but there is room for improvement. I would like to see the comment maker offer up a better example in any large economy.

  • Report this Comment On November 03, 2012, at 1:02 PM, wonteach wrote:

    Mr. Bowman's comments would be correct in an economy that was already working at or ner capacity. But under the current circumstances, he's dead wrong. The resources that will be used to repair the storm damage will not be diverted from more efficient uses. They will be taken (directly or indirectly) from resources that are now sitting idle. They will be paid for, hopefully, with deficit spending - of which we need MORE, not less - and will put people to work - again, directly or indirectly - who have been unemployed for many months. The 47% (ironic isn't it?) in the Yahoo Finance poll were correct.

  • Report this Comment On November 03, 2012, at 1:29 PM, jc09058 wrote:

    @wonteach: More Deficit spending? That would be like living the rich and famous lifestyle on credit cards alone. At some point, you will reach a limit and it will all come crashing down. As I see it right now, there is no one out there willing to fund our country's rich and famous lifestyle by buying our debt.

    In fact, I seriously propose that we will start seeing a decrease people and countries will to buy our treasuries because they don't have the extra money to spend like they once did. Their own lifestyle caught up with them. Plus, this planet has a limited amount of space and people it can support and we will reach the tipping point for anyone's market expansion.

    A point is going to have to be reached soon to contract our deficit before we become a larger version of Greece, and as Greece did to the EU, so we will do to the world. Uncontrolled spending is not the answer now or in the future. It never was except in the minds of politicians wanting to buying the public vote.

    If you think the politicians have thought everything though about deficit spending, please take another look at how they have handled medicare, medicaid and social security so far. I, for one, am not impressed nor do I expect to see anything that I paid into come back to me as promised by those same politicians past and present.

    Time to reel in the deficit and the politicians as well. We can't afford them any longer.

  • Report this Comment On November 03, 2012, at 1:33 PM, wrenchbender57 wrote:

    Absolutely amazing that any news service would publish an article that states that any disaster is good for the economy. Should be obvious that this is money that is now NOT available for more productive purposes. The money spent may boost some local businesses for a while, but always at the expense of others that are doing regular, productive work.

  • Report this Comment On November 03, 2012, at 1:49 PM, jm7700229 wrote:

    Wonteach is correct. The US actually suffered a long recession after WWII, despite the backed up demand for housing, cars and other stuff. The non-communist European economies that were most damaged by the war boomed following it as they reconstructed (admittedly, this could not have happened without the boost of the Marshall Plan).

    Sharpx misses the point of efficient capital use. Bain did not buy efficient, well run, profitable companies. It bought inefficient, generally over-staffed and poorly managed companies that were on their last legs. By reducing the workforce and turning the companies profitable, it not only saved the jobs that would have been lost by the failure of the company, it created future jobs in the going concerns.

    But most of the people on the left in the US and Europe do not seem to understand that enterprise does not exist to create jobs for workers. It exists to create wealth for the owners. With the exception of certain co-ops, every attempt to change this reality has been met with failure. Look to all of the formerly socialist communist countries that have successfully embraced market economics. My favorite examples, though, come from England, which nationalized all of its big manufacturers, only to have to sell them off to their former colonies for them to survive.

    Katrina was a special case. It hit an area of overwhelming dependency populated by people who had forgotten how to help themselves. There has been an enormous amount of economic activity in New Orleans, but the locals have not been the prime beneficiaries because they have neither the means nor the desire to participate. Memphis makes a better example; by helping themselves, the citizens of the city recovered in weeks rather than years. I have a favorite example here, too. San Francisco was 90% destroyed in 1906 by the earthquakes and fires. One year later, it was 90% functioning again, despite nearly no aid from the state or the Feds, and despite the relatively primitive demolition, cleanup and reconstruction tools available to them.

    The issue is almost infinitely more complex than the author presents.

  • Report this Comment On November 03, 2012, at 2:15 PM, Hibiscusanole wrote:

    I loved the article, but jm7700229 has a strange perspective on New Orleans. Over 3,000 dead people may not seem able to help themselves in terms of rebuilding the city. Those who mourned them and fled certainly had not forgotten how to help themselves, either. You had to see the actual destruction that occurred, the water marinated neighborhoods that were never rebuilt because they would still be in danger of flooding, endangering human life. The scope was tragic.

    Economically, it boosted the high salaried activity of cardiologists, as heart attacks were up by a third. However, my dentist never returned, and could not even be located. The city undoubtedly lost some traumatized high earners who wanted to live long lives.

  • Report this Comment On November 03, 2012, at 2:24 PM, wrenchbender57 wrote:

    @sharpX2: Any market mechanism needs some kind of regulation and/or control. There is not such thing as an ideal political or market system. Thus Capitalism, of course, needs to be regulated and controlled to some extent. And corruption needs to be stamped out as much as possible. However, even with all of that, there is NO other system that is more efficient or has produced more wealth for the average citizen than the American Democratic, Captialistic system. I challenge you or anyone to name just one that is more efficient or more "democratic". As Winston Churchill once said: "Democracy is the worst form of government, except for all the others". A similar statement could be made about Capitalism.

  • Report this Comment On November 03, 2012, at 2:59 PM, wonteach wrote:

    I suspect that those who rail against deficit spending are either much younger than I, or are simply ignorant. If you remember the 60's or 70's you might recall that deficit spending was decried by the economic illiterates who accused the spenders of "saddling" future generations with debt that they would never be able to pay off. Well here we are - we are those future generations. And are we paying it off? No, we're running up MORE debt.

    And what has been the result? Is the government finding it hard to borrow money? Obviously not - interests rates are the lowest in my (66-year) lifetime. Is the value of the dollar declining in the face of excess money in the system? No, inflation has been well under control for a long time, and has seen little or no correlation with the deficit or level of outstanding government debt.

    The deficit "problem," at least for now, is a mirage. No one can point to a single economic difficulty being experienced by our country that can be linked with any intelligent honesty to the deficit. It is something that may well have to be addressed in the future, but right now it is a red herring that prevents us from addressing the serious unemployment and underutilization problems.

    Perhaps the worst aspect of the situation, politically, is that the President, who should know better, has so little backbone that he's been unwilling to stand up to the Republican demagogues and panderers to ignorance, and he's allowed the entire discussion to be conducted on the Republican side of the field.

  • Report this Comment On November 03, 2012, at 3:14 PM, Melaschasm wrote:

    Great article, even though it is extremely sad that people actually believe disasters are good for the economy.

    When you destroy valuable assets, total wealth decreases, even if they are replace by something more valuable.

    A millionaire who loses a $250,000 uninsured house can go out and buy a $500,000 house, but his net worth has still decreased by $250,000.

    The same is true at the national level. We can replace the 50 billion dollars of assets that were destroyed with stuff worth $100 billion, but our country is still $50 billion poorer.

  • Report this Comment On November 03, 2012, at 3:34 PM, foolhardy7 wrote:

    Katrina is not a valid comparison. Most of that damage was flooding from failed levies, and a high percentage was not insured or not covered because of the cause issues. Insurance involvement will be much greater in repairing the damage in New York, New Jersey, and beyond, because most of the flooding was wind driven, and that makes a difference under many insurance policies. It is likely that a higher percentage of people in the affected areas are insured as well.

    Will financial institutions and other Wall Street businesses have uninsured business interruption losses? Yes, of course, and those are big numbers. But those businesses don't put the middle class to work. So while the premise that disasters are not good for the "economy" is correct, disasters that have a high percentage of insurance protection can increase all sorts of construction related and skilled worker jobs. Do we all pay for them in premiums? Yes. Should we question whether we should be living so close to the coasts as the climate changes? Yes. Do you want to do this every year? No.

    But will there be some benefits in sectors of the economy that have needed work for some time? Yes. And at least that part is good.

  • Report this Comment On November 03, 2012, at 5:32 PM, BCanuck wrote:

    From the article,

    'Our government borrowed a record amount of money to pay for the war, which acted as a stimulus to jolt us out of recession as the war provided jobs that were previously unnecessary.'

    Hmmm ... this is treading very close to the absurd myth that WWII provided some economic benefit. Borrowing trillions of dollars and then using the money to build capital goods that are used to kill people and then see the same goods blown up or sunk to the bottom of the ocean is insane.

    National defence is (unfortunately) necessary. Defeating murderous dictators is (unfortunately) necessary to preserve democracy. But the US and every other country would be far better off if it wasn't necessary to plough real resources and wealth into arms.

    Imagine if the trillions spent on the war were spent on public infrastructure, basic research and education?

    Imagine if the trillions borrowed by the govt weren't borrowed at all and all that capital was left for individuals to invest in productive enterprises?

    Wars are NEVER good for any economy. Period.

    Not to mention all the dead people.

  • Report this Comment On November 03, 2012, at 6:21 PM, mdrwolfe wrote:

    The immediate bounce from money spent to repair damage is to a great extent not incremental value added, but just maintaining the status quo...and the use of such resources removes them from the inventory of resources available to incrementally add real benefit (growth) to the economy. As others have replied, if natural disasters benefited the economy, all we need do is destroy a few billion dollars of 'stuff' every week and replace it with a few more billions of 'stuff', and we can keep everybody working, except on balance we have created nothing but reduced net wealth equal to the value of that which was destroyed...and this is the principle behind much of the deficit spending we have created over the past 12 years.

  • Report this Comment On November 03, 2012, at 6:57 PM, ostreger wrote:

    This article is neither wholly right nor wholly wrong. You don't replace last year's - decade's? - model, you buy something modern and better, and more closely matched to your current needs. And, yes, it's expensive and deprives you of the capability to do something else with your cash.

    Of course you could have changed it anyhow - but you hadn't. And politicians are worse, they need a hurricane to break the logjams that stultify every government everywhere, that are of their creation and can be overcome by them.

    Nonsense? How else could America go to the moon, with the technology of the mid-20th century and inside a decade?

  • Report this Comment On November 03, 2012, at 8:30 PM, jfrankh57 wrote:

    You are right that it isn't good for the economy unless it is something that happens to another economy and we can ride in, save the day and make some money out of it. The loss inside of our economy is not offset by the activity generated due to the damages! Yes, people end up modernizing their homes and businesses replaced but at what cost...too much. Not only does the home/business owner have to rely on insurance (if they have flood insurance), they also have to pay deductibles, incidentals, overhead beyond insurance coverage, time-off/lost productivity from work, distraction, and whatever health issue develop from event generated tension. Then you look at the so-called income lost by the insurance (US Gov/actually US Taxpayer) company.

    BCanuck: Wars are never good (You are right.), but are worse for those who are attacked and unprepared to defend themselves. Just because you fight on someone else's soil, doesn't always mean you started anything, You are delusional if you think the USA is warmongering as many altercations are instigated by sources outside are country. Do our elected officials act stupidly at times...yes, they are human and they will wield power indiscrementally if we allow them...

  • Report this Comment On November 04, 2012, at 1:54 AM, LoadDrive wrote:

    Just a "Heads-Up" for the people that are posting on here about how Bad the Free-Market is, You may want to plan your need vacation (and take your family with you too ) to some of the Great countries that are Not doing the Free Market thing.

    The first country that come's to mind...is Cuba. Have a Good Day!

  • Report this Comment On November 04, 2012, at 4:36 AM, brittlerock wrote:

    Am I the only fool here who believes that context defines the appropriate course of action? Deficit spending is good and deficit spending is bad; it depends on the bigger picture. Capitalism is good and capitalism is bad; it depends on the bigger picture. Socialism is good and socialism is bad; it depends on the bigger picture - I won't run through all the scenarios, if you can't think of some of them, you need some serious study of history and economics. One other thing, these actions and isms are not diametrically opposed and mutually exclusive. For example, you can have capitalism (e.g. plumbing supplies and services) and socialism (e.g. municipal water treatment and distribution) simultaneously operational and both providing benefit to society.

  • Report this Comment On November 04, 2012, at 11:20 AM, mooonguy wrote:

    Any time a change occurs there are winners/loser, pluses and minuses. Yes, the storm is a net negative because there is a lot of destroyed value.

    However, Mr. Market has gone depressive without much of a reason. In two years, heck maybe 3 months, this storm doesn't mean a thing.

    Always entertaining to watch the east coast media panic and multiply the significance of things they can see outside their window.

  • Report this Comment On November 04, 2012, at 3:58 PM, 48ozhalfgallons wrote:

    Appreciated the article, Mr. Bowman. "How about New Orleans post-Katrina?" That's a great example; not even the music has improved since Katrina.

  • Report this Comment On November 04, 2012, at 6:51 PM, fiftyone49 wrote:

    This really doesn't make any sense. Whether you agree with the morality of it is one thing, but the fact that certain companies will benefit by the increased demand for generators is just fact.

  • Report this Comment On November 04, 2012, at 7:19 PM, volcan357 wrote:

    You are right of course. Having something destroyed is not a benefit. Rebuilding will create jobs but the money could have been spent on something more beneficial if the disaster hadn't occurred. The country could have spent the money on better infrastructure rather than repairing the damage caused by the storm. My other comment would be that there is too much construction on sites subject to flooding. Better planning could reduce the damage from future disasters.

  • Report this Comment On November 04, 2012, at 8:18 PM, Shyolee wrote:

    Don't know where the people talking about Katrina are from. Think should take a look at the economy in Louisiana. Believe it is a little better than most of country. The money that people have "saved" in the insurance companies was put into the economy. Yes there have been ups and downs, but the money was spent and helped. Yes, the trinkle down works. Here it came from the insurance company. The only difference between Obama and Romney is where the trinkle down comes from. Big government or private companies. Which one works better. Private insurance insists on getting paid before and not on credit. Have some insurance stock and worried when several hurricanes hit Florida. Read article to not worry. The insurance companies would just use the data to raise the rates on policies. Yep, stock is higher now than was when hurricanes. There will be a bump in the economy in the Northeast as money is pumped in. Rates were increased by the insurance companies. With the government, it will have to be taxes. Which do you think is more effiecient? I may not break something just to get another, but if I have money sat aside for a new one it is my choice. The maker of the axe or whatever is goning to be happy. The car manufacturers are very happy to replace our cars either because we want one or dinged the fender. To sum up, the local economy in the northeast will improve, at least temporarily, due to Sandy. Yes, it is a hardship. I am not going to have a car wreck to get a new car, but if I have insurance that I have paid for I will be okay.

  • Report this Comment On November 05, 2012, at 10:46 AM, DaveGruska wrote:

    maiday2000 - I was waiting for a "parable of the broken window" reference as well in the article (http://en.wikipedia.org/wiki/Parable_of_the_broken_window) (not to be confused with the "broken windows theory", which states that places that aren't kept up basically invite crime (http://en.wikipedia.org/wiki/Broken_windows_theory)).

    In any case, the commenters above have discussed well the gist of this parable, and also it's main criticisms.

  • Report this Comment On November 05, 2012, at 12:55 PM, Darwood11 wrote:

    I agree with the premise of the article. On October 30 I posted this as part of a comment on the economic losses:

    ".... Part of these losses will eventually be made up by reconstruction activity, but it would be naïve to put forward the view that a hurricane is in some sense a stimulus for the economy. There’s no guarantee that reconstruction activity will be extra activity, on top of what would otherwise have occurred, rather than a substitute for that activity."

    The above was from IHS Global Insight economists Gregory Daco and Nigel Gault in a piece by David Wessel in the online WSJ today on "Sandy and the economy,"

  • Report this Comment On November 05, 2012, at 12:55 PM, Darwood11 wrote:

    @sharpx2. I disagree. Problem number one: most of these markets are free; they are influenced by politicians so that their selfish agenda can be promoted. It seems that Obamacare may also have the undesired effect of shifting some workers from full employment to part time. I'd suggest you keep an eye on the U6 employment statistics.

  • Report this Comment On November 05, 2012, at 1:33 PM, Milligram46 wrote:

    I wrote about this in METaR before Sandy hit. Figure the whack to 4Q2012 GDP is 2% to 2.5%. Could even see negative growth in 1Q2013 and 2Q2013 and a shallow recession because of Sandy. The economy is weak and just can't absorb a potential $100 billion hit (which would be about 3% to 4% of annual GDP right off the top at the start of the year)

  • Report this Comment On November 05, 2012, at 2:38 PM, superbinvesting wrote:

    At some point we have to step back and put humanity before profitability. The financial crisis of 2008 taught us all that the Gordon Gekko mentality of capitalism simply doesn't work. In the end we are all losers. Disasters are never good for the economy because of the damage they inflict on peoples lives, period.

    www.ingeniousinvesting.com

  • Report this Comment On November 05, 2012, at 3:45 PM, hbofbyu wrote:

    I think the left views Hurricane Sandy as similar to a giant cash-for-clunkers program (which was an ingenious way to buy union votes).

    As was mentioned earlier, the objective of an economy is to create wealth, not create jobs. If jobs were the objective we would all still be engaged in manual labor - but fully employed.

  • Report this Comment On November 06, 2012, at 10:21 AM, kirkydu wrote:

    The first thing to understand is that there is no such thing as a free market.

  • Report this Comment On November 09, 2012, at 2:37 PM, Freemarketof1 wrote:

    Hurricanes are bad! Economic activity is good! While it is obvious that a great amount was destroyed by hurricane/super-storm Sandy, one often overlooked piece that is usually created is a strong human desire to regain what was lost. Bolster this with the renewed sense of faith that comes from surviving a tragedy and i think you have all the ingredients for a long term net positive for the economy. Besides, wealth that is just sitting in a bank is of no value to the economy unless it can be used in the economy. When i need, i spend. If I spend, it must be replaced. To replace it i must work. If i work i am producing something that someone needs (or wants). That is the most basic economic cycle.

  • Report this Comment On November 09, 2012, at 5:18 PM, TMFHobo wrote:

    @Freemarketof1:

    Ask someone in Long Island who hasn't had power in their home for nearly two weeks about a "renewed sense of faith."

    The capital sitting in banks is in a constant cycle of being deployed to the most worthy investments it can find. That's how the economic cycle works.

    Replacing something that was destroyed is by no means a net positive. At best, it's a wash, but you have to remember that the capital employed could've been better spent elsewhere.

    -Jeremy Bowman

  • Report this Comment On November 10, 2012, at 12:15 AM, Freemarketof1 wrote:

    @TMFHobo

    Talking about the potential positive economic effects of Super storm Sandy is not an endorsement of disasters.

    Short term obstacles created by the storm will be overcome and people will embrace the resolve needed to rebuild their homes and lives.

    I have more faith in the basic economic cycle i described of the individual to provide benefit to the economy than I do in large banks. I would pose the question, "if banks were so good at constantly deploying capital to the most worthy investments, why did they require one of the largest examples of government welfare in history?"

    I made references to the human desire to regain what was lost and also to a renewed sense of faith that comes from surviving a tragedy as being net positives to the economy. These generate economic activity over and above replacing what was destroyed.

    Durable goods spending is a very stable and reliable use of capital. It's only speculative to say that it could've been better spent elsewhere.

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