This week, in the midst of Sandy's mayhem on the East Coast, John W. Schoen of CNBC wrote in The Fiscal Times: “it's not all bad news...what the economy loses in the short term can often be made up in the cleanup and rebuilding afterward.” In a similar vein, Doug Spiron, head of Home Depot's storm response told Schoen: “ it's good for the economy, absolutely. ” And John Challenger, CEO of Challenger, Gray and Christmas also assures us that “the cleanup and rebuilding will bring an employment surge in construction, and increases will follow in business and consumer spending as companies and homeowners replaced damaged equipment and household items.”
Dumb–ass chatter like this is the epitome of the “disaster is good for the GDP” assertion, and it points to the heart of what's wrong with our current ‘neoclassical’ economic paradigm. Most mainstream economists don't know how to factor climate change into their models, nor they cannot tell you whether we are moving forwards or backwards. Now more urgently than ever, as climate change tipping points hover ominously on the horizon, we need a paradigm shift in the theoretical foundations of economic science. Check out this 30-second video mindbomb and then throw it at some CEO, economics professor, or policy wonk you know.