The Economic Consequences of Katrina

[Sikander]

Originally posted by germanos


This is why I have never understand Economics:
a desaster like this could in fact be a boost to the economy.

Does this mean that wealth and well-being has nothing to do with economics? In fact that wealth and well-being are opposites of a healthy economy?

It's complicated for sure. New construction will be to better codes, which means that it is likely to be more energy efficient etc. Old businesses will go bankrupt, but newer businesses will come into being, perhaps with a more vigorous model etc. So even if we don't take into account the fact that rebuilding is part of the economy, we'll see some advantage from that money as some of it will actually improve things compared to how they were before the disaster.

[Solly]

This is good the economy in a way that digging a hole and then filling it in is good for employment.

[Guynemer]

Oh christ.

I agree with PA.

Life is no longer worth living.

[Krill]

Damnit, same here Guy.

[lord of the mark]

Originally posted by Park Avenue
This is good the economy in a way that digging a hole and then filling it in is good for employment.

Only the extent there was macro slack in the economy. While we werent yet at full employment, we were growing and unemployment was dropping. A sudden surge in make work was NOT what this economy needed. In any case, the loss of jobs from shut businesses in NO will more than offset reconstruction jobs for some time, I think.

[Kidlicious]

The problem is lack of capacity in the short run. That's going to affect prices and how many of these displaced persons get jobs right away.

[Dis]

sure we get revenue from rebuilding. But we are losing the revenue of an entire city. This is a major city that contributes taxes. And people not making money cannot buy products. Just divide the population of new orleans into the population of the U.S. that percentage is the amount the U.S. economy will decline- roughly. Yes I realize many people will get new jobs. I'm not sure if we can find many jobs. Esp. for the unskilled or low skill workers. Those with construction skills will of course have a job for sure.

[chequita guevara]

Originally posted by Sikander
It's complicated for sure. New construction will be to better codes,

How much you wanna bet that a good quarter of the new buildings will not be to code, but will be of shoddy workmanship. I'm just extrapolating from Florida, where we have had a housing boom. With every contractor in the U.S. seeking to make a quick buck in the Gulf Coast, I can see a lot of corners being cut.

On the flip side, the NOLA diaspora could have some interesting cultural effects on the U.S., as NOLA cooking, music, and customs are dispersed thoughout the U.S. Mardis Gras everywhere!

ATLANTIS
Donovan

The continent of Atlantis was an island
which lay before the great flood
in the area we now call the Atlantic Ocean.
So great an area of land, that from her western shores
those beautiful sailors journeyed
to the South and the North Americas with ease,
in their ships with painted sails.

To the East Africa was a neighbour, across a short strait of sea miles.
The great Egyptian age is but a remnant of The Atlantian culture.
The antediluvian kings colonised the world
All the Gods who play in the mythological dramas
In all legends from all lands were from fair Atlantis.
Knowing her fate, Atlantis sent out ships to all corners of the Earth.
On board were the Twelve:
The poet, the physician, the farmer, the scientist,
The magician and the other so-called Gods of our legends.
Though Gods they were -
And as the elders of our time choose to remain blind
Let us rejoice and let us sing and dance and ring in the new
Hail Atlantis!
Way down below the ocean where I wanna be she may be,
Way down below the ocean where I wanna be she may be,
Way down below the ocean where I wanna be she may be.
Way down below the ocean where I wanna be she may be,
Way down below the ocean where I wanna be she may be.
My antediluvian baby, oh yeah yeah, yeah yeah yeah,
I wanna see you some day
My antediluvian baby, oh yeah yeah, yeah yeah yeah,
My antediluvian baby,
My antediluvian baby, I love you, girl,
Girl, I wanna see you some day.
My antediluvian baby, oh yeah
I wanna see you some day, oh
My antediluvian baby.
My antediluvian baby, I wanna see you
My antediluvian baby, gotta tell me where she gone
I wanna see you some day
Wake up, wake up, wake up, wake up, oh yeah
Oh glub glub, down down, yeah
My antediluvian baby, oh yeah yeah yeah yeah

[Zylka]

I don't even want to believe this is happening. Have fun with it, America

[CapTVK]

Man! I never knew so many Americans were closet-fatalists. What happened to that famous "Can Do" mentality? A disasters happens and they're reduced to whining about it on an internet forum.

Some of you guys should take an example of Alan Atkisson at World Changing. At he least he dares to dream and plans for a better city. Take a look at some of the points he makes for the new "New Orleans".

1. Work with nature, and technology, to protect the city from future worst-case scenarios*
2. Use rebuilding to lift the poor to safer economic and social ground
3. Create an economy of creativity
4. Become a clean, green showcase
5. Dare to dream

*Also interesting that he points out that the Dutch have to get involved in the engineering effort

http://www.worldchanging.com/archives/003425.html

Dreaming A New New Orleans, Version 1 | Alan AtKisson
Features see all posts in this category

The full measure of the catastrophe in The Big Difficult has yet to be taken; indeed, the catastrophe is still worsening.

There will be, as soon as the city can be re-opened, many funerals. Mardi Gras -- should there even be one next year -- will undoubtedly have a special theme of mourning. I am in mourning already.

As one who has at various phases of life called the New Orleans region both "home" and "client," I have a special love for the place that has sometimes expressed itself irrationally. Helping people escape from rationality has always been one of the city's unique talents. One does things both in New Orleans, and for New Orleans, that one would be unlikely to do in, or for, other places. The city inspires a freedom of spirit, which in turn creates a fierce loyalty.

It is no wonder then that city leadership was already talking about rebuilding, even before the destruction was complete. Something like three-quarters of the city's residents are, after all, native-born. New Orleans is home, period, often over many generations. And those who are not native tend to quickly feel a similar sense of belonging there.

So take it for granted that New Orleans will be rebuilt. If the economics look daunting, if the physical challenge seems staggering, if the news reports of the day speak of chaos and disaster, if the idea of rebuilding a city in a basin placed in between a huge lake and big river seems foolish, count on emotion and passion to overwhelm these counter-arguments. And the United States, as a nation, is not likely to allow a major city -- especially one so strategically placed -- to be abandoned.

Massive resources will be mobilized, first to care for the victims, then to clean up ... then repair and rebuild. Where to begin with such a gargantuan task? How can it be done in such a way that something like this never happens again ... and in a way that helps lead the world toward a generally better future?

What follows are very preliminary thoughts on principles for eventually creating a "New New Orleans," one that is more environmentally secure, more economically successful, and more socially healthy and equitable, while retaining the culture that made it world famous. As the news reports continue to create a picture of the city's horrible descent into hell, such an exercise feels a bit foolhardy; but there is so much dreaming to be done, to restore this great and wondrous city, that the dreaming must begin now.

These thoughts build on the earlier work of a consortium of regional leaders, which I and my colleagues had the privilege of supporting over the last few years. The results of that work seem, in many ways, even more relevant and urgent now.

When the Worst Has Already Happened

A scenario like the one that played out with hurricane Katrina was certainly known to the region's leadership. Even National Geographic had recently written about the threat to New Orleans from a monster hurricane (October 2004 issue), and that was just one of the most visible in a torrent of similar articles, popular and scientific, both inside and outside the region.

Indeed, the very first indicator in the 2002 "Top 10 by 2010 Regional Indicators Report" is called "Coastal Erosion, Storm, and Flood Damage." It shows rising insurance costs over time, from more frequent flooding, caused by a combination of factors that included disappearing coastal lands and more frequent and intense hurricanes. (Framing the issue in terms of dollars ensured that it got everyone's attention.) The report notes that:

Taken together, these threats have raised serious, and difficult, questions about our long-term future. And the data from the last 10 years -- showing a steady increase, punctuated by the enormous spike in costs from the May 1995 flood -- confirm that the threat is not merely academic; it is economic, as well as social and environmental.

The 1995 "spike" of over half a billion dollars in damages now seems, of course, like nothing. But in retrospect, there was probably no way for the city to avoid the fate that has now befallen it. Yes, awareness of the problem was rising. Even very conservative business leaders had noted to me privately that they were worried about global warming and getting hit by "the big one"; they were just proscribed politically, they said, from talking very much about it. One went so far as to draw up plans for me, on the back of a napkin, showing his vision of a tremendous sea wall and causeway across the Gulf, complete with casinos and beach resorts.

But in the technical language of sustainability theorists, "respite time was shorter than response time." That is, the signals had come too late. Awareness of the threat had finally reached some key decision-makers in a convincing way ... but not in time for them to overcome various kinds of resistance -- economic, political, psychological -- and begin to respond. It turned out that the clock on the time-bomb, the amount of "respite time" left before irreversible catastrophe struck, had only a few years left on it. This was insufficient time to make, or even to convince people to start making, the massive investments that would have been required to avoid this catastrophe.

In other words: Even if the regional leadership, from the moment some of them had truly understood the nature of the threat, had begun mobilizing all of the available resources and willpower to try to protect the region from such a storm, and even if they had started a frantic process of rebuilding lost landscapes (which buffer the region from storm and storm surge), raising levees, redoubling the pumping infrastructure and the like, it would probably not have had time to avoid most of what Katrina has now done to New Orleans.

So, the worst has happened. The city has, in functional terms, been destroyed. Fatalism has had its ultimate day.

From here forward, New Orleans can choose its own fate.

[chequita guevara]

Actually, this was not a worst-case scenario. A worst-case is a cat-5 with a 25-foot storm surge hitting the city from the SE.

[Koyaanisqatsi]

Some of you guys should take an example of Alan Atkisson at World Changing. At he least he dares to dream and plans for a better city. Take a look at some of the points he makes for the new "New Orleans".

1. Work with nature, and technology, to protect the city from future worst-case scenarios*
2. Use rebuilding to lift the poor to safer economic and social ground
3. Create an economy of creativity
4. Become a clean, green showcase
5. Dare to dream

And given how quickly the WTC site has been redeveloped, this should come true in what, a century or so?

[chequita guevara]

Unfortunately, we lack the effective leadership to make NOLA a better city.

[CapTVK]

And given how quickly the WTC site has been redeveloped, this should come true in what, a century or so?

Well, if everyone has that sort of snarky attitude, certainly not in your lifetime.

[CapTVK]

Originally posted by chegitz guevara
Unfortunately, we lack the effective leadership to make NOLA a better city.

So you give up by default?