LIBERTARIANS JUST PROCEED FROM ERROR TO ERROR:

Do natural disasters stimulate economic growth? (Drake Bennett, 7/08/08, The Boston Globe)

Traditionally, analysts have cautioned that Chinese growth figures should be greeted with skepticism, but according to one school of economic thought, there may be something to the idea that the quake served as a brutal stimulus. In fact, some economists argue that despite the widespread destruction they leave behind, hurricanes, earthquakes, floods, volcanic eruptions and ice storms can spur economic growth.

Rebuilding efforts provide a short-term boost by attracting resources to the region, economists say. By destroying old factories and roads, airports and bridges, the disasters allow new and more efficient infrastructure to be built, forcing the transition to a sleeker, more productive economy in the long term.

"When something is destroyed you don't necessarily rebuild the same thing that you had," said Mark Skidmore, an economics professor at Michigan State University. "You might use updated technology, you might do things more efficiently."

Studies have found that earthquakes in California and Alaska helped spur economic activity there, and that countries with more hurricanes and storms tend to see higher rates of growth. Some of the most recent studies have found a link between disasters and subsequent innovation.

The baker is too lazy to care how much antiquated technology costs him.

Posted by Orrin Judd at July 9, 2008 3:52 PM