March 11, 2011

Earthquake good for Japan's economy

From the Wall Street Journal:

Insurer Swiss Re's Asia chief economist, Clarence Wong, said he doesn't expect the earthquake to have a severe impact on Japan's exports at large, given that many production lines of electronics producers have already been moved to other Asian countries.

However, he said domestic consumption will likely be hurt by the impact of the quake, "but post-crisis reconstruction will help drive gross domestic product upwards due to the increase of government spending."

A natural disaster can be good for the economy? In that case, why don't we drop bombs on downtown Wilmington and spur Delaware's economy? Or start a fire that burns down most of New York City? Wouldn't those rebuilding efforts be good for the economy?

The broken window fallacy never seems to die.

Posted by PaulSmithJr at March 11, 2011 06:43 PM | TrackBack

Comments  (We reserve the right to edit and/or delete any comments. If your comment is blocked or won't post, e-mail us and we'll post it for you.)

Haven't you driven up Second Street? It looks to me like a has been dropped on Wilmington! It's just a slow-motion bomb, is all.

Posted by: Dana at March 12, 2011 07:04 AM

It is kind of the same principle as mobsters providing you the service of burning down your property so you can collect on the insurance.

Posted by: The Maryland Crustacean at March 12, 2011 09:52 PM

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