Viewers of FoxNews and CNBC know University of Maryland economist Peter Morici. Morici is an affable and clever man but lately he has come under attack from a fellow economist, George Mason University's Don Boudreaux. In a CNBC post Morici wrote;
"However, rebuilding after Irene, especially in an economy with high unemployment and underused resources in the construction and building materials industries, will unleash at least $20 billion in new direct private spending-likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive."
Morici feels as does former Enron advisor Paul Krugman that tearing down and rebuilding a more or less modern infrastructure and replacing it with a newer infrastructure is economically simulative and therefore hurricanes and earthquakes are good for the economy. Morici's post was followed by a post from Don Boudreaux on Cafe Hayek, "An Open Letter To Peter Morici which states;
"I hereby offer my services to you, at a modest wage, to destroy your house and your car. Act now, and I’ll throw in at no extra charge destruction of all of your clothing, furniture, computer hardware and software, and large and small household appliances.Because, I’m sure, almost all of these things that I’ll destroy for you are more than a few days old (and, hence, are hampered by wear and tear), you’ll be obliged to replace them with newer versions that are “more economically useful and productive.” You will, by your own logic, be made richer.
Just send me a note with some times that are good for you for me to come by with sledge hammers and blowtorches. Given the short distance between Fairfax and College Park, I can be at your place pronto.
Oh, as an extra bonus, I promise not to clean up the mess! That way, there’ll be more jobs created for clean-up crews in your neighborhood."
Perhaps this video explains
Don Boudreaux reasoning.
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