Good Question!

Could the Oil Spill Help the Economy?

Heather Horn 44 Views Jun 16, 2010

Despite its devastating effects on the Gulf region, could the oil spill wind up having positive effects on the national economy? The Washington Post's Ezra Klein and The Washington Independent's Annie Lowrey both note a report showing that the oil spill cleanup is functioning--in the short term--as a stimulus, increasing the country's GDP as the formerly unemployed are hired to help clean beaches and run boats.

Of course, this result doesn't mean the spill will prove a net positive for the economy. Lowrey sensibly comments that "five years from now, there won't be anymore clean-up workers ... [b]ut ... the fishing industry and the tourism industry will still be suffering." Klein makes a broader point:

This is a nice object lesson in the inadequacy of GDP as a measurement of societal well-being. I could blow up the biggest building in every city in the country and the resulting reconstruction effort could mean a big temporary increase in GDP. But blowing up buildings is not a sustainable way to grow your economy.

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Heather Horn

Sources

Could the BP Oil Spill Increase GDP?, Ezra Klein, The Washington Post
Oil Spill as Stimulus, Annie Lowrey, The Washington Independent

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Topics: U.S. Economy, Oil Spill

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