Hurricane Sandy was an invader, one that splashed ashore with as much destructive power as any foreign (or perhaps interstellar) invader could hope to bring to bear against our coasts. Thus, in the opinion of economist Paul Krugman, the storm should help boost the American economy.
“If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months,” the Nobel Prize winning economist declared on CNN in 2011. “And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better [off].”
Krugman’s managed to sum up Keynesian economics in 30 seconds. This theory holds that massive amounts of government spending -- even on something unnecessary, such as a program to protect against Space Invaders -- can boost the economy. Speaking again of invaders, Krugman added at a conference this summer: “we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.’”
Well, Hurricane Sandy swamped cities, killed dozens, left millions without electricity and could cost $20 billion. Rest assured that estimate will only climb. To an economist such as Krugman, that must sound like great news. All those repairs and rebuilding jobs will force American companies to stop hoarding cash, which they’ve been selfishly doing.
“Today, American companies have nearly $2 trillion sitting on their balance sheets,” Barack Obama told the Chamber of Commerce last year. “And I know that many of you have told me that you’re waiting for demand to rise before you get off the sidelines and expand, and that with millions of Americans out of work, demand has risen more slowly than any of us would like. We’re in this together, but many of your own economists and salespeople are now forecasting a healthy increase in demand.”