Though Hurricane/Tropical Storm Irene was not as devastating as expected, it took several dozen lives and has cause billions of dollars of damage. Some economists have tried to argue that the storm is a net gain for the economy—think of all the jobs that will be created by the clean-up and rebuilding! But treatment of the storm by the mainstream media has been surprisingly honest and nonpartisan, and their unguarded coverage is instructive.
ABC News reports that economic losses due to slowed commerce over the next week to ten days could be as much as $20 billion, which is more than the direct damage done by the storm. (Amusing twist: one of the economists cited in the ABC story is the guy claiming the new trees and roofs needed along the eastern seaboard constitute an “economic renewal,” although ABC seems to have decided to spare him the mockery by excluding that nonsense from its story.)
The media’s frank admission that a hurricane-forced suspension of business cannot be declared economic growth invites comparison with what is said when, for example, a snowflake falls on Hilda Solis’s eyelash as she walks into work and the Department of Labor is sent home at noon. Why does no one talk about the economic losses then? Where are the stories of systematic collapse? When the Department of Labor is not on the job! Oh, wait…
Men and women—their ideas and their hard work—are the only producers of wealth, but an economics that isn’t correctly based on human nature can pretend otherwise. As Henry Hazlitt, author of Economics in One Lesson, said,
No man burns down his own house on the theory that the need to rebuild it will stimulate his energies.
Deep down, even the Washington press corps knows that natural disasters don’t create jobs, and regulation doesn’t drive growth. It takes an Act of God to get it out of them though.