I'm always amazed by political pundits who tell us that there is a bright side after some natural disaster or in the case of civil unrest in some country. They tell us that after the damage has been done, just think of all those people who will be employed rebuilding it all? I disagree with this concept, because I understand free-market capitalism and how economies actually grow and operate. Disruptions, especially large-scale disruptions as we witnessed in late October of 2012 with Hurricane Super Storm Sandy, hurt commerce, supply chains, and took a big bite out of the Big Apple and out of our economy.
On October 31, 2012 there was an interesting article in Reuters titled; "Storm Keeping Millions From Work May Slow Economic Growth," by Jeff Kearns which stated; "Sandy may cut U.S. economic growth as it keeps millions of employees away from work and shuts businesses from restaurants to refineries in one of the nation's most populated and productive regions. The storm may cut by $25 billion in the 4th quarter. That could reduce the fourth quarter pace of growth to a range of 1 percent to 1.5 percent, from the earlier estimate of 1.6 percent."
Do you remember when France had those big riots, where everyone was taking Molotov cocktails and burning all the automobiles in some 400 different cities? There were protests and riots lasted for almost 90-days straight. The autoworkers of France told the government not to do anything about it, because they realized they would have lots of people wishing to buy more automobiles, new ones, which would help them stay gainfully employed building.
Look, the way to increase economic productivity, and spur on economic growth and employment is not to tear down your civilization and society as it is. Super Storm Sandy was no godsend for economic growth or to help with unemployment figures. Those left-leaning political pundits who think otherwise are sadly mistaken, but they are all over the news every time there is a large disaster whether it is a big tornado, hurricane, earthquake, or some other calamity. While there is opportunity in crisis, generally speaking the overall crisis takes its toll on the economy, so there is no net gain.
Nine times out of 10, it is a severe net loss. In this case, it will hurt us in the fourth quarter of 2012, and we still might be feeling some pain into 2013. This was a big event, and not only a natural disaster, but in many ways an economic hit right when we did not need it. Please consider all this and think on it.
Lance Winslow has launched a new provocative series of eBooks on Economic Realities. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net/
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