What what
(I’d say a Hazlitt shoutout while dissing Krugman is close enough)…
Paul Krugman and Earthquake Economics:
All of this is a basic economic fallacy, which goes to show that the Nobel Prize in economics is worth about as much as the Nobel Peace Prize these days. This is the Fallacy of the Broken Window.
The fallacy was memorably explained in Henry Hazlitt’s classic introduction to economics, Economics in One Lesson. Suppose a young hoodlum throws a brick through the window of a store. At first this seems like a destructive act, but soon the bystanders reflect that it will create work for the glass-maker who is called in to install a new window. So the young hoodlum has actually “stimulated” the local economy.
Hazlitt points out that a genuine economist, by contrast, would take into account the other uses for the money that will now have to be spent fixing the window.
For more on the Krugman-earthquake issue, see here.