Hurricane Sandy Is Bullish for the Economy

NEW YORK (TheStreet) -- The usual thinking is that human genes must have been loaded with an aversion to crisis. But what's often not discussed is that we actually get excited about crisis.

We didn't get to where we are today by sitting on the couch and gulping beer; we survived countless crises big and small, collectively and individually, over the evolutionary scale and in everyday life.

Look at the media coverage of hurricane Sandy. You could see the sparkles in the eyes of politicians and newscasters when they talked gravely about it, nonstop.

People are excited about this. Despite the tragic loss of life and property that will happen in some areas, let's face it: Deep in our hearts, we don't believe whatever damage we incur will really matter.

Long-Term Economic Impact of Hurricane Sandy

There will be insurance. There will be emergency crews. There will be neighbors and community help. There will be government subsidies. It is, viewed in a cold-hearted but accurate way, just a big, collective roller-coaster ride. People are genuinely scared. People are also genuinely excited, if only secretly.

The meaning of crisis has gone through tremendous inflation in the developed world. Whereas it used to mean life-or-death or at least grave hardship, nowadays in the developed world it means a manageable inconvenience for most people involved. This must be why disaster movies are popular in the developed world but not so popular in the developing world; out there it's too real for comfort.

In an economy not constrained by resources, such as that of the U.S., limited crisis means only two things at the statistical level: stimulus to individual and government spending; and stimulus to jobs.

Hurricane Sandy Small-Business Disaster Loans

Insurance companies will suffer in the short term, of course. But even they likely will benefit in the longer term as crises make people value the products they sell even more. Furthermore, since Sandy has been so hyped for so long, if it does not live up to the hype, even insurance companies will get a boost.

In other words, in the economic sense, destruction is constructive before reaching the resource-constraint boundary. It is no different from a boy's old, beat-up toy car finally getting totaled; as long as his parents can buy him a new one without meaningful impact to the family's lifestyle, it's a good thing, again not considering the emotional/sentimental aspect.

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