This article was
selected because it shows the prevalent effect of the broken window economic fallacy
on the economy of the United States. The broken window fallacy explains why the
destruction of property is not a benefit to society even if someone repairs
said property. In this article the writer addresses the effects of the Hurricane
Sandy stating that it will actually help the economy.
The broken window
fallacy basically says that if a boy breaks a window in a town, the town is not
better off because this window can be repaired. In fact the town is worst off
because the money and materials that would otherwise be used elsewhere are
wasted on reaping the broken window. Similarly Hurricane Sandy devastated and
destroyed lots of houses. Overall the country is obviously worst off. However
people perceive reconstruction as a benefit and ignore the fact that capital
has been lost forever.
This makes one wonder
how is the general public is mislead and mistaken on their perception of economic
realities. To be perfectly honest, a small part of me dies a little when I read
articles like this. This is mass hysteria at its best in my view.
