Mainstream economists, corporate executives, politicians, and pundits are still totaling up the windfall boost to the nation’s GDP, but most agree that the benefits from this week’s savage “Frankenstorm,” which brought the Eastern seaboard to its knees, will surely propel President Obama to reelection victory.
“Consider it a sign from heaven,” said Nobel Prize-winning economist and former Enron adviser Paul Krugman. “It’s God’s intention that the economic policies of the last four years continue; he sent us this storm to generate a final burst of shovel-ready reconstruction projects before we go to the polls.” (Relax you libel lawyers out there, this is SATIRE.)
Fed Chairman Ben Bernanke wasted no time dispatching bales of freshly printed $100 bills to stuff into sandbags to protect coastal towns and villages from flooding. “Operation QE Levee sends a clear message to Chinese monetary authorities that the United States Federal Reserve will stop at nothing. Let them think twice about trying to maintain their manipulative currency peg.”
Supermarket chains across the region reported record sales of bottled water and paper towels, while stores across the states of Virginia, Maryland, Delaware, Pennsylvania, and New Jersey sold out of emergency generators. “Another storm like this and we may not have to lay off all those people the White House asked us not to dump until after the election,” said General Electric CEO Jeff Immelt.
General Motors CEO Daniel Ackerson announced that thousands of unsold Chevy Volts were washed away from dealer lots—which means insurers will now pay for all those cars consumers didn’t want. “Thanks to mother nature it looks like we may meet cash flow expectations after all.”
Power outages across Maryland and New Jersey gave Krugman some hope that enough food spoilage would cause farm prices to rise. However, he lamented, “It’s too bad there are no nuclear power plants at the water’s edge. Think of how much economic activity would be generated if we had to clean up our own Fukushima –style meltdown!”
Yes, the insurance industry faces up to $100 billion in damage payouts. But as Krugman points out, as long as the money is spent and not saved, it is all net positive when calculating GDP. “It doesn’t matter where that money came from, or whether you repair something that was destroyed rather than built something new,” the bearded sage advised. “Macroeconomics is not encumbered by the foolish hobgoblin of consistency, which is why it is so useful for developing government policy. It’s as if double-entry bookkeeping was never invented!”
“Have I gone mad? I’m afraid so, but let me tell you something. The best people usually are.”
Sharing Krugman’s ebullience, the Bureau of Labor Statistics announced that it would begin applying a new seasonal adjustment to all future economic reports. Dubbed the “Sandy in Your Eyes” coefficient, it states that all unemployment reports tabulated during a hurricane that falls one week before an election will be based not on the statistics that are actually collected, but on the average unemployment rate for months that have an R in them over the past 16 years.
Not all the economic news was positive, however, since presidential campaigning was temporarily suspended due to the inclement weather. With less than a week until Election Day, there is a genuine risk that both campaigns will miss their billion-dollar spending targets. Yet both candidates agreed that this is a small price to pay for the “aggregate demand stimulation” delivered by the devastating storm.
Bill Frezza is a fellow at the Competitive Enterprise Institute and a Boston-based venture capitalist. You can find all of his columns, TV, and radio interviews here. If you would like to have his columns delivered to you by email, click here or follow him on Twitter @BillFrezza.