Fires and the Broken Windows Fallacy

[RottedOak]

You are correct that insurance companies will pull most of their payout funds from other areas (definitely a net loss globally). However, not all losses are insured, and not all insurance funds will be spent locally. Some of the insured will take the money and leave. And the insurers will make up for their payouts with rate increases that will drain money from the area. Nor is the economic disruption limited to “this week.” All of the effort that goes into rebuilding over the next several years — the arguing with insurance companies, the permit processes, hiring contractors, etc. — is a diversion for the homeowners. Some of that (all the overhead for dealing with insurers and government) is pure loss with no net production. If you focus narrowly enough, you can find “winners,” but even with a temporary inflow of insurance money, I doubt the long-term result will be a net gain for the region.

[drunkle]

money is also coming from state and federal “emergency relief”.

increased rates means the cost is spread out over time. vs the immediate, lump sum influx.

it’s money coming in that wouldn’t have otherwise. it’s money that would otherwise continue to sit in concentrated hands.

[drunkle]

money is also coming from state and federal “emergency relief”.

increased rates means the cost is spread out over time. vs the immediate, lump sum influx.

it’s money coming in that wouldn’t have otherwise. it’s money that would otherwise continue to sit in concentrated hands.

[drunkle]

money is also coming from state and federal “emergency relief”.

increased rates means the cost is spread out over time. vs the immediate, lump sum influx.

it’s money coming in that wouldn’t have otherwise. it’s money that would otherwise continue to sit in concentrated hands.

[kicksavedave]

I cannot believe that some people are suggesting that overall this is good for the local economy. It’s not. Its going to be good for a tiny segment of the workforce who deal directly with the rebuilding process, but most everyone else will be effected, for the negative.

The money coming in, will be insurance payouts, which almost never equal the total net loss. Paying to rebuild a structure still leaves the homeowner footing the bill for a huge gap for things that insurance doesn’t cover. So the homeowners who lost property are mostly all net losers here.

A few businesses which sell items needed for reconstruction will see a short term bump. But many businesses which depend on things like tourism, or discretionariy spending, will be hurt because homeowners trying to rebuild won’t be going to Legoland, or buying boats, or taking vacations.

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes? Yep… And just exactly who pays for those? Every taxpayer, including local San Diego tax payers. Either their taxes will go up, or that money will get diverted from other projects, to pay for the fire efforts. The bridge and sewer companies who were slated to win jobs in 2008, might have to wait until the budget recovers before they can start their projects. That’s not profit, that’s diversion of money to pay for lost opportunity.

If you thought there were no buyers for SD property before, what do you think will happen now? All those houses untouched by fires, just lost a definite percentage of potential buyers. Sales will slow even more than before the fires.

Not to mention how many people who lost how many man hours of work and various productivity due to time spend evacuated… that money will never be returned. Many small business lose revenue that won’t be replaced.

Carpenters, roofers, contrators and Home Depot will win in the short term. Almost every one else loses in the long term.

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

[kicksavedave]

I cannot believe that some people are suggesting that overall this is good for the local economy. It’s not. Its going to be good for a tiny segment of the workforce who deal directly with the rebuilding process, but most everyone else will be effected, for the negative.

The money coming in, will be insurance payouts, which almost never equal the total net loss. Paying to rebuild a structure still leaves the homeowner footing the bill for a huge gap for things that insurance doesn’t cover. So the homeowners who lost property are mostly all net losers here.

A few businesses which sell items needed for reconstruction will see a short term bump. But many businesses which depend on things like tourism, or discretionariy spending, will be hurt because homeowners trying to rebuild won’t be going to Legoland, or buying boats, or taking vacations.

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes? Yep… And just exactly who pays for those? Every taxpayer, including local San Diego tax payers. Either their taxes will go up, or that money will get diverted from other projects, to pay for the fire efforts. The bridge and sewer companies who were slated to win jobs in 2008, might have to wait until the budget recovers before they can start their projects. That’s not profit, that’s diversion of money to pay for lost opportunity.

If you thought there were no buyers for SD property before, what do you think will happen now? All those houses untouched by fires, just lost a definite percentage of potential buyers. Sales will slow even more than before the fires.

Not to mention how many people who lost how many man hours of work and various productivity due to time spend evacuated… that money will never be returned. Many small business lose revenue that won’t be replaced.

Carpenters, roofers, contrators and Home Depot will win in the short term. Almost every one else loses in the long term.

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

[kicksavedave]

I cannot believe that some people are suggesting that overall this is good for the local economy. It’s not. Its going to be good for a tiny segment of the workforce who deal directly with the rebuilding process, but most everyone else will be effected, for the negative.

The money coming in, will be insurance payouts, which almost never equal the total net loss. Paying to rebuild a structure still leaves the homeowner footing the bill for a huge gap for things that insurance doesn’t cover. So the homeowners who lost property are mostly all net losers here.

A few businesses which sell items needed for reconstruction will see a short term bump. But many businesses which depend on things like tourism, or discretionariy spending, will be hurt because homeowners trying to rebuild won’t be going to Legoland, or buying boats, or taking vacations.

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes? Yep… And just exactly who pays for those? Every taxpayer, including local San Diego tax payers. Either their taxes will go up, or that money will get diverted from other projects, to pay for the fire efforts. The bridge and sewer companies who were slated to win jobs in 2008, might have to wait until the budget recovers before they can start their projects. That’s not profit, that’s diversion of money to pay for lost opportunity.

If you thought there were no buyers for SD property before, what do you think will happen now? All those houses untouched by fires, just lost a definite percentage of potential buyers. Sales will slow even more than before the fires.

Not to mention how many people who lost how many man hours of work and various productivity due to time spend evacuated… that money will never be returned. Many small business lose revenue that won’t be replaced.

Carpenters, roofers, contrators and Home Depot will win in the short term. Almost every one else loses in the long term.

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

[(former)FormerSanDiegan]

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

However, the fact that there are disasters must be good for your personal economy, sinc eit is evidentally your field.
Curious: What area of Disaster Recovery ?

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes?

This equals dollars coming from Sacramento and Washington, DC to Southern California that otherwise would have been spent other places for other things.

FWIW, longer term, I think the economic impact is small either way, relative to the overall regional economy.

[(former)FormerSanDiegan]

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

However, the fact that there are disasters must be good for your personal economy, sinc eit is evidentally your field.
Curious: What area of Disaster Recovery ?

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes?

This equals dollars coming from Sacramento and Washington, DC to Southern California that otherwise would have been spent other places for other things.

FWIW, longer term, I think the economic impact is small either way, relative to the overall regional economy.

[(former)FormerSanDiegan]

I work in the Disaster Recovery industry, so trust me, I know. Natural disasters are not good for the local economy.

However, the fact that there are disasters must be good for your personal economy, sinc eit is evidentally your field.
Curious: What area of Disaster Recovery ?

Who is going to pay for the cost to fight the fires? FEMA? The Feds? State and Local taxes?

This equals dollars coming from Sacramento and Washington, DC to Southern California that otherwise would have been spent other places for other things.

FWIW, longer term, I think the economic impact is small either way, relative to the overall regional economy.

[sdduuuude]

If it’s good for the economy, shouldn’t we just let it burn everything? Why spend the money fighting the fire if it just lesseens the damage, and thereby lessens the economic boost?

In fact, lets light an annual “help the economy” fire just to make sure we all prosper.

[sdduuuude]

If it’s good for the economy, shouldn’t we just let it burn everything? Why spend the money fighting the fire if it just lesseens the damage, and thereby lessens the economic boost?

In fact, lets light an annual “help the economy” fire just to make sure we all prosper.

[sdduuuude]

If it’s good for the economy, shouldn’t we just let it burn everything? Why spend the money fighting the fire if it just lesseens the damage, and thereby lessens the economic boost?

In fact, lets light an annual “help the economy” fire just to make sure we all prosper.

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