Re: Irene disaster funding
AskAsa
9/2/2011 8:46:27 AM
You're right. There is an initial bipartisan push for help in the affected areas. But we're already hearing how politicians outside the areas of impact are balking, It'll be an interesting thing to watch over the coming months.
Irene disaster funding
ProfR
9/2/2011 8:40:24 AM
There is already bickering going on in Congress about where money will come from to fund money going into the disaster areas caused by Irene. This will get more interesting.
Re : Devastation's Silver Lining
yalanand
9/2/2011 2:24:08 AM
If there's an upside, it's that destruction leads to construction -- and that means jobs.
@John, I agree with you that destruction leads to construction and that means jobs. Infact similar opinions were aired when Japan earthquake happened. Infact many people suggested it whould help Japan to grow its economy. Needs to be seen how this destruction will impact US economy and unemployment.
I also doubt that Irene can bring benefits to the struggling economy, even in the long term. It is true that specific group may benefit a little from the Hurricane, but the whole economy will be at a loss.
I would agree with you on negative gain, and that any gain at all will be spread out over years.
On the upside, there might be some businesses that will not reopen that might not have been doing that well, that will open up new space for new business with new opportunity for growth, maybe.....
Re: loss vs gain
ProfR
9/1/2011 3:38:08 PM
I agree - the net of all this will take months if not years to play out. Overall I think this will have a negative impact. I think some businesses will never reopen and some people will move out of the area.
John,
All three of the questions at the end of your article are looking to government for solutions.
Given how the last several years have been, maybe it's time we stopped looking to Congress, the President and the rest of the government for solutions to all of our problems. Maybe government is part of the problem -
If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand."
--Milton Friedman,
American economist and Nobel Prize recipient
loss vs gain
tokyogai
9/1/2011 1:22:28 PM
Although there will certainly be jobs gained in the rebuilding, that has to be weighed against all the losses the businesses and other incurred. Insurance does not pay 100% because of deductables and all loss may not be covered. Many of the businesses will lose the Labor Day Weekend business which can be a big loss. I don't think we can look at the situation and be certain of whether the overall effect is a loss or a gaion at this point.
In the long term, there may be modest gains--although certainly not for people in parts of New Jersey where repeated flooding has made their properties virtually worthless.
As Peter Morici notes, rebuilding after Irene will unleash at least $7 billion in new direct private spending-likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive. He explains:
Consider a restaurant with inadequate patronage-its owner invests the insurance settlement in a new more attractive business. On the shore, older smaller homes on large plots are replaced by larger dwellings that can accommodate more families during the summer tourist season. The outer banks of North Carolina saw such gains several decades ago after rebuilding from a storm of similar scale.
All of this is not to discount the direct costs to individuals by temporary and in some cases permanent displacements; however, when government authorities facilitate rebuilding quickly and effectively, the process of economic renewal can leave communities better off than before.
Interesting way to look at things.
Having a lot of friends in both VA and the New England states, I know for a fact that there will be a lot of construction going on over the next few months as a result, and I am sure tree service companies wont do that bad ether.
But overall I think that the economy will take a hit in those areas, more buisness will be lost than gained.
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