Macroeconomics and the Broken Window

My macroeconomics professor is convinced that a war or an earthquake will boost GDP.

This may be true of the numbers temporarily. But the numbers don’t take into account the wealth that is destroyed. It’s incredibly myopic not to see this (Broken Window Fallacy) He advocates government spending as a means to boost GDP, but, what he doesn’t understand is that government must first take or borrow from the private sector in order to purchase or do anything. When I brought this to his attention, he literally scoffed at me, and was amazed I’d even bring it up. He must have thought of me as one of those “conservative economists” or “right-wing” economists he’s trashes during some lectures.

Government is a taker, not a producer. It creates no wealth, it can only hinder wealth creation. He is a firm believer that government stabilizes the economy. In fact, the FED does the exact opposite, it’s been proven many times.

He’ll also never miss an opportunity to bash private business, like when he blamed the 2008 crash on banks, not once mentioning the CRA, HUD or Fannie and Freddie.

Basically, my macroeconomics teacher doesn’t know where wealth comes from. And I’m paying for this!

The best part is, he’s smug, egotistic and thinks he’s brilliant.

End rant

 

– Will Ricciardella

 

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Filed under Political Economy, Political Philosophy

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