Jobs?
ProfR
9/1/2011 9:10:11 AM
Interesting article. I live in New York and have seen some of the devastation in this area. Although there may be some construction jobs generated in this area, Irene caused some other businesses to close or cut back. Also, many people who were going to vacation in the Jersey shore and other places have cancelled. So not sure this really helps the economy.
You're right. The article's intent was mainly to say that the storm will create some jobs for the beleagured construction industry.
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.
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.
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.
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.
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.....
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.
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
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.
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: 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.
Re: Irene disaster funding
John Jordan
9/2/2011 8:48:09 AM
Rep. Nan Hayworth, whose district includes areas that got ravaged by Hurricane Irene, is getting a lot of flack for her stance that any funds given to replenish the FEMA disaster fund, including monies that will go to repair homes, roads and businesses in her district, come from funding cuts in other non-defense areas of the federal budget.
Common sense
BigJim
9/2/2011 8:50:41 AM
Don't mean to sound like jerk, but when are people going to take enough responsibility to 1) stop building in flood zones; 2) ignore the need to buy hurricane coverage; 3) ignore the need to buy flood insurance, no matter where they live?
If I'm too cheap or lazy to buy the right coverage, why should I expect the federal government to repair my water damaged home? It's not fair to the people who do buy the insurance.
Jim,
This is one of the main reasons premiums are so high. The 80/20 rule in full effect. I would not be surprised if 80% of legit and consistent paying policy-holders only get about 20% of the real-world benefits of insurance. It's the 20% that abuse the system and get most of the payouts.
As much as I'd like to say you were being too hard on people, Jim, I can't. We should stop bailing out people -- whether the people are corporate entities or individuals -- and shift the responsibility to them to help themselves.
Bottom line: Buy the flood insurance. Get the hurricane coverage. I know your budget is tight, but so is mine, and I did.
Re: Common sense
Broadway
9/4/2011 9:08:06 PM
When businesses fail to buy proper coverage and calamity hits, you can be certain they won't get ant handouts. They'll go under. And thats the way it should be. Just wait until a big quake hits Cali. The takeup rates for quake insurance is ridiculously low.
Drivewaygirl,
Truth. It's easier to play ignorant then ask for help than it is to actually take the time and resources to plan and anticipate certain dangers in life. Most people do the former and EXPECT help. This needs to stop and people will learn that, much like the rules of the road, ignorance of the potential dangers is NOT an excuse.
Re: Common sense
driven
9/6/2011 7:12:44 AM
That's my perspective too. You have to have personal/corporate accountability. There are some things you can't anticipate (9/11), but you should be evaluating the liklihood of a quake, hurricane or flood.
riding the pines
AskAsa
9/2/2011 1:03:47 PM
While many members of building trade labor unions have been riding the pines (benched) from lack of work - entrepreneurial contractors have been riding their pickups from around the country to come here and be part of the rebuilding process.
Some of these are scavenger contractors who chase destruction. But many are ambitious workers who want to earn a share of the millions that will be spent from insurance settlements etc.
These workers don't wait for a shop steward to assign them a federally funded project. They do watch the weather channel to see where the next big job might come from.
It's a whole different mindset and labor tradition that is admirable in many ways.
Re: riding the pines
mInvestor
9/2/2011 4:14:36 PM
AskAsa
Gald that you noticed those entrepreneurial people. That's our hope at this difficult time. I believe only this kind of entrepreneurial spirit can save us, and pull us out of this mess (Hurrican and recession).
Rep. Hayworth position on storm aid
John Jordan
9/3/2011 9:12:26 AM
For accuracy sake, Rep. Nan Hayworth has clarified her position and says that aid for Hurricane Irene will not be tied to budget cuts.
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