Friday, September 02, 2005

Broken windows

A lot of people see the construction of a new stadium as a positive for the community, usually for economic reasons (jobs, etc.) We have discussed this in previous posts, for example "A question about jobs created by a new Yankee Stadium" which you can read by scrolling down.

While following links related to a COMPLETELY graver situation I found a perfect explanation of why the idea that building a new stadium is economically good for our community and city is hogwash:

"In Economics, this is referred to as the "Broken Windows fallacy". The fallacy states that destruction creates real growth.

"I'll not write a full article debunking the fallacy, but think like this. Suppose I don't like you, and so I completely destroy your car. You need to buy a new one, so you buy a new car (that someone has to produce).

"Is this new car considered "growth"? You had a car, now you have a car. The growth is zero. And worse, the person that produced your car could have produced something else, or maybe a car for another person that didn't have a car in the first place - your money could be used to buy a fancy telescope to watch the stars, for instance, and then you'd have both a car AND a telescope."

So, rather than destroying the real Yankee Stadium, only to build a Disney version on OUR parkland, we could use that money to renovate it, and still have money left over for things like, I don't know: housing, a new Metro North station, EDUCATION. You get the idea.


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