Specious Rule Wrote:
Nov 14, 2012 10:24 AM
Rick, Walter Williams is talking about the fact that during a disaster wealth is destroyed before the jobs come. In order to replace that wealth it is necessary to allocate resources away from other uses to restore what was lost. In other words we lose the original wealth that was destroyed and what might have been created with the resources that are allocated to rebuilding. This is not a new line of thinking but one that is taught in every basic economics course. Frederic Bastiat wrote a great essay on this in the 19th century called The Broken Window ( http://bastiat.org/en/twisatwins.html ) from a series of articles dealing with that which is seen, and that which is unseen. That link has the entire series and is a fun and often funny.