Class Summary 10/5

"Broken Window Fallacy" 

1. I wouldn't have bought the roof (i.e. consumer product)
2. Before the storm I have $1,000 and a roof. Post storm I have $0 and a roof.
3. But.... what if roofers were idle/unemployed/we're in a recession? 
4. Costs are subjective, the value you place on options is the cost you make on decisions.
5. Marginal thinking "little bit" 

Looking at consumer preferences you did NOT want the roof before the storm, so did you want it after? NO. When you think logically about what the world looks like before and after destruction it is clear that destruction is NOT good for our economy. Although there are arguments against this...
-We're willing to trade jobs today and look at the future later.
-The government itself has no ability to create resources.
-After destruction, although we create jobs today, we are destroying jobs of tomorrow.

TO THINK ABOUT: How was WW2 good? Yes, GDP increased, but 15 million people died, how is that good? The same argument can be made for Hurricane Katrina and Tsunami in Asia. War and destruction is NOT good for economies!