The Painful Reality Behind the Tennessee Fires

This past week, my community experienced a tragedy that is unprecedented in its history. In the midst of a long drought, wildfires were becoming prevalent in our area. For a couple of weeks, the wildfires were confined to fairly remote areas, amounting to little more than a nuisance for our daily air quality. Last Monday night, however, the fires had reached the outskirts of Gatlinburg, TN, and a new fire was ignited just a mile from my own home in Wears Valley.

1,413 structures, 17,000 acres and 13 lives were destroyed. Fueled by hurricane-force winds, the fires spread rapidly and unpredictably. Chaos, fear and destruction dominated our world over the next few hours. All that could be done was watch as the flames devoured more and more of the Great Smoky Mountain’s iconic scenery. I stood in a state of total disbelief in a church’s parking lot as I saw the fire engulf one of the cabins that were scattered across the mountainside, the first of many. Shortly after this, news arrived that the city of Gatlinburg was properly ablaze. Our community’s only hope lay in the early arrival of a rainstorm that was forecast for that night. The hours waiting for that rain were some of the most painful imaginable.

By the time the rain arrived and the wildfires were, for the most part, neutralized, 1,413 structures had been damaged or destroyed and 17,000 acres burned. Thirteen lives are confirmed to have perished as of this writing.

Tragedy Brings Fallacy

Seeing the full devastation the following morning, both in person and on television, was surreal. The area I have called home my entire life had been scarred. The last thing on my mind at that moment was the state of the local economy, beyond the clearly devastating losses that were incurred. Then, while watching a local news network, the inevitable happened. With complete seriousness, a pundit said that the fire would boost the local economy in the long run.

I knew someone, somewhere was going to make this comment. One must wonder if the correlation between tragedy and economic ignorance was some inexorable law of nature described in Newton’s Principia. After seemingly every event of large-scale destruction, the fairy tales of economic growth emerge as visions of boosted GDP figures dance in the heads of Paul Krugman and his disciples. This happens so frequently that a good economist can quickly become numb to this broken window fallacy. Refuting it almost turns into a reflex rather than a feat of purposeful thought.

This time was different, however. I didn’t passively dismiss this display of foolishness. My typically Stoic demeanor failed; I became angry. Unlike all of the various other hurricanes and earthquakes that trigger the use of the broken window fallacy, this disaster didn’t take place in a region far away, but instead in my own backyard. I saw for the first time what it meant for real people in real life, and it wasn’t as innocent as a broken window in need of replacement.

Theory Meets Reality

The concept this lady and many others on my television regularly espouse is fairly simple. The damage brought about by the fire must be repaired. This is unquestionable. In order for these repairs to happen, construction jobs will be required, as will the purchase of building materials and transportation for both. Obviously, this will cause a boom for the construction industry. Our county’s GDP could rise and jobs will be created, so the community will be wealthier because of this, right? Just think about all of the required spending!

I certainly wasn’t thinking about all the spending. I was thinking about one of my friends from high school. She and her family lost everything. Everything this family had worked their entire lives to obtain was reduced to piles of ash in a single day. The home she grew up in, every material possession and every remnant of her childhood that was inside, had been eviscerated. Very literally, only the clothing they were wearing that day remained.

For hundreds of families throughout the Smoky Mountains the case is tragically the same, and, in some instances, fatally worse. The results of decades of human labor and effort were eliminated. Countless scarce economic resources and capital were destroyed. A lifetime’s worth of wealth and value, both physical and mental, vanished. All of it will have to be re-accumulated through hard work, saving, and personal sacrifice.

The Economy Is Human

In the mainstream economists’ attempts to replicate the mathematical success of Newton’s sciences, they have lost touch with reality, and, in cases such as this, humanity. The replacement of destroyed wealth may very well mean that economic measurements such as GDP could show economic “growth,” but these brutish statistics always conceal the real economic truth. Clearly, the increase in the numerical account of production will not actually represent the creation of greater wealth, but the re-creation of wealth that had already previously existed. Labor and other resources must be redirected to replace the wealth that was lost, rather than elsewhere in the economy.

The economy is made up of real people, in the real world, with real needs which must be met. The true measure of an economy’s success is the well-being of the people that compose it, something which can never be translated into a numerical value. How could anyone look the victims of this fire in the eye and tell them that their lives burning down in front of them meant that the economy was now better off?

There is one thing everybody knows and agrees with, however. Gatlinburg will rebuild, and it will recover. There can be no doubt of that.

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