Here We Go Again: The Broken Window Fallacy (Sandy Edition)

I suppose it was inevitable that someone would suggest that Hurricane Sandy - currently battering the Eastern seaboard of the United States - could benefit the economies of affected areas (video also here):

Tell that to the folks whose homes, cars, and livelihoods have been destroyed - and to the insurance companies who, instead of investing their resources in productive capital markets, must shell out funds to help those people rebuild. This, then, is one reason why GDP is such a lousy number when it comes to calculating actual prosperity.

And so, one more time, here's a quick explanation of "The Broken Window Fallacy," which explains why wars, terrorism, natural disasters, vandalism, government "stimulus bills" and other acts of destruction merely make us poorer (video also here):

I'm quick with this video, of course, because the Broken Window Fallacy never fails to make an appearance when disaster strikes, as evidenced by my posts on 2011 Christchurch earthquake in New Zealand and the 2011 tsunami/earthquake in Japan.