Over the past week, the mainstream media has been wholly obsessed with the effects of Hurricane Sandy in the northeast, complete with the usual troop of Keynesian economists telling us that although loss of life is always tragic, this hurricane will surely provide long-term economic benefits as the region is forced to rebuild. As a result, the pro-freedom websites and Austrian school economists have been hard at work thoroughly discrediting the incredibly foolish broken window fallacy.
It is clear that rebuilding from hurricane damage will in fact increase construction spending, that much is seen. But the unseen includes everything that might have been purchased instead of new construction and repairs had the hurricane not occurred.
Stories about the hurricane have somewhat pushed aside the former top-story and media obsession, a disaster of a somewhat different nature, but equally extreme in magnitude, the U.S. presidential election. Yes, in this election, we have seen the perfect storm of economic illiteracy, corporatism, and an utter disregard of human rights. We’ve also seen nonstop media coverage, and hundreds of millions of dollars donated to and then spent by the two campaigns. All of that spending is seen. But, in context of the broken window fallacy, I find myself asking, what about the unseen?
Isn’t a Presidential election between two men who agree on 99% of the important issues a complete waste of time, effort, and money? Think of the actual, relevant news stories that could have been reported on had the media not been wasting all this effort on the election. Think of what the hundreds of millions of dollars in donated funds might have purchased. Think of the opportunity cost of the time spent by all of the intelligent people in the country caring about this meaningless exercise. Think of that which is unseen.