Sunday, May 1, 2011

The effects of tornados

A colleague at University of Alabama sent a note about the recent tornado:

It was very, very bad. The tornado cut all the way across town. Many communities were devastated and many businesses destroyed. The town will recover, but there is a great deal of rebuilding to do.

Our prayers and thoughts go out to Tuscaloosa, especially those who lost loved ones.

As the community rebuilds, income will increase. But no one would argue that the people of Tuscaloosa are better off. This fallacy (?) features prominently in the Keynes vs. Hayek debate, round 2:

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