Friday, February 5, 2010

How to Make Money by Breaking Stuff

I have to say up front that this is not an original idea. Even with all the brilliant minds behind the ideas at Howtomakeadollar, none of us is smart enough to make this kind of thing up. You probably wouldn't think so, but pillaging, plundering and burning stuff to the ground is actually good for the economy.

In econo-babble, pillage and plunder is called "reducing the supply," and it is actually, completely seriously, not joking, a real economic theory that intelligent PhD. economists believe in. This theory was advanced by a dead guy named John Maynard Keynes in the 1930s, and is very popular with politicians for some reason.

Keynes was a well-respected economist in the 1930s, and he believed that a good way to make the economy grow was to kill farm animals and burn cities. This would cause prices to go up, which would cause businesses to produce more goods, which would be good for business. Now, as I said, Keynes was pretty smart. If you write a big book about the virtues of destruction, mayhem and burning, no one will take you seriously. Change it to "reduce the supply" and you become a world renowned economist. It also helped that he was working during the 1930s, when the economy had sunk so much that no one knew where it was. So you can see why he understood it so poorly.

Somehow, against all common sense, his ideas caught on, and the U.S. government gave it a try. They slaughtered thousands of pigs to see if it would make meat prices go up. It did! Great! High pork prices! Just what the economy needs more of. They call it the Great Depression, but it wasn't that great.
Nonetheless, some economists to this day still adhere to these theories, and nowadays every time a hurricane or an earthquake destroys something you will hear people saying that it is actually good for the economy because of all the rebuilding that will happen.

Here is an example from USA Today: "Although natural disasters spread destruction and economic pain to a wide variety of businesses, for some, it can mean a burst in activity and revenue.
For that reason, economists tallying the numbers expect that hurricanes will be neutral in their effect on the U.S. economy, or may even give it a slight boost... "There's real pain," says Steve Cochrane, director of regional economics at, a consulting firm in West Chester, Pa. "But from an economic point of view, it is a plus..." (read the rest of this nonsense here)

There you have it! Some guy at is pretty sure that  hurricanes are good for the economy. (he has a website, so he must be an expert!) I apologize for my skepticism.

Now lets list some of the vital things that hurricanes do. 
1. Bring communities together under the same pile of rubble that used to be someone's roof
2. Increase the supply of contaminated water
3. Decrease the number of standing telephone poles, which are ugly
4. Create jobs for looters
5. Knock trees over, freeing numerous kittens who climbed too high to get down.
Yep, all those things are good for the economy.

Thanks to brilliant reader C. W. for giving me the basics on Keynes.


  1. Your simplification of Keynesian Theory is insulting to your own intelligence. Please take as much time to learn the basics of this economic theory as it did to take you write this travesty, and maybe you'll actually learn something about how our government has looked at fiscal policy for the last half century.

  2. Dear Anonymous
    Howtomakeadollar offers its sincerest and most humble apologies to you for simplifying Keynesian Theory too much! We did not intend to write a travesty. As you probably know, Howtomakeadollar is an extremely respectable institution, and we have never written anything even mildly irresponsible or inaccurate. We strive for factually driven ideas, and never resort to broad generalizations or dubious claims. We apologize for this insulting blog entry, and we will never write any more travesties like it again. I can assure you that the writer of this entry has been subjected to shame and was pelted with many rotten potatoes. Thank you for pointing out our error and intellectual shortcomings! I hope you get a promotion, a raise, and many well-groomed pets.


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