Thursday, September 01, 2005

Economic Impact of the New Orleans Disaster

A Topical Story from the Washington Post

It occurred to me this morning (I'm slower than the average bear) that there are impacts to the greater US economy outside of the obvious. First, the obvious - New Orleans doesn't, and won't for many months, exist. For all intents and purposes the city is dead in the water (excuse the pun). Any business that once flowed from and/or to there has now stopped and must find an alternate route.

But, just to take ONE example, New Orleans was a shipping hub. The ships will need to find a new place to dock. This may sound easy, but N.O. already had the employees and infrastructure in place to handle such a volume; whatever city gets that motherload will struggle to keep up with demand, requiring more employment of a fairly specific skill that may not exist in that community in the requisite numbers. This could have two impacts: first, some other city will find the employees and the shipping business will expand, causing the city to expand, and some city will reap great rewards; the other impact is that the city will struggle, the shippers will cast about looking for other docks that CAN handle their business, or they will find alternative, and cheaper (because now you have dock-search costs, plus extra labor costs for the extra days it days it takes, etc.) alternatives to move their wares from point A to point B - most likely plane or train or truck (all of which require lots of gasoline). In any event, once the shippers settle on a method, the city of N.O., once it is back up and running, may never get that business back. And even if they could, there is a high likelihood that the dock workers never moved back from Houston. And this is just a partial impact of ONE industry.

Which brings me to my second point. The outflux of people from N.O. While some of them may move back, many of them will not. Since none of them have jobs right now, the unemployment in Houston has just shot through the (Astrodome) roof. Indeed, unemployment all over the South will be at all-time highs. The most significantly impacted will be the lower and lower-middle-classes - those who couldn't afford to move somewhere else or get relocated to a different headquarters. Conservatively, there are 50,000-100,000 additional people out of work, mostly in Houston, but spread all over the South - where are they going to get jobs?

In any event, over the next few months we will begin to see the true impact to the US economy - and it probably will not be good.

6 comments:

Pete said...

I agree: this is going to be ugly. I continue to be amazed at the failure of local, state, and federal authorities to mitigate the severity of this disaster. The death toll, I heard earlier, is expected by at least some to climb into the thousands. The economic ramifications of losing a city (!?!?), and the fourth largest port in the world (in terms of tonnage, so I hear) will be terrible to see.

Jeff said...

The really interesting thing is: they DID try to mitigate damages. They moved some supplies down there before the hurricane and followed protocol regarding impending hurricane activity - and it was just ridiculously over-matched (obviously).

I was listening to NPR yesterday and they had the director of the National Emergency Relief Board, or something like that, and he was in New Orleans coordinating National Guard and other relief efforts and he was completely unaware of large groups of un-assisted people. It honestly sounds like the whole city is just a bunch of chickens with their heads cut-off and in complete and utter disarray. Which, to be fair, is probably a pretty reasonable situation to be in given the circumstances.

It could have been handled better; but really, there's just no way to have foreseen the damage. (except without better long-term planning - but that's another discussion for another day because, at least from what I've heard, the powers-that-be have been aware of this scenario and had chosen not to do anything about it).

Pete said...

I think the key here is the lack of planning: you're right that of course there was some preparation, but not for the combination of hurricane plus post-hurricane flooding, even though there were warnings that this was possible, even likely (eventually). Many folks did what they could to help in the immediate aftermath, but what was missing was precisely the kind of organizational structure, not to mention the brute resources (helicopters, fuel, food, etc.), that was needed, and that ought to have been provided quickly by the federal government (since state and local were unable) and it wasn't. Thousands died because of the delay, by several days, in reaction time.

This, of course, is just my read on what went on, but I guess we'll get a better picture in the days and weeks to come. Once the actual emergency is less severe, I'm sure many people will be examining just how it could have been as bad as it was (and still is, though now the situation seems to be improving).

Anonymous said...

Okay you Fools,

Both of your are wrong as usual, and I have come to point out why. There is nothing that can be done to stop such destruction. All the planning and even money in the world can't help the situation. It is a natural disaster, the earth every now and then when it gets a little heavy on one side or another, gets rid of a couple thousand(or HUNDREDS of THOUSANDS) of people.

If we had infinite resources (which we do not) and experienced personnel (which we do not) maybe a hundred less people would have died but in the grand scheme of things its no big deal, except now the only people that will show me their tits for beads are you two fools.

Does it suck? yeah. Should we give support any way we can? Yes. Should we try to blame people for whether this could have been prevented/mitigated/better-handled? Hell No. Having trained for disaster scenarios, personally it's a joke.

Also, to all you non-atheiests out there who pray to God/Allah/Whoever-the-Fuck and give father "pee-pee-toucher" your hard earned money/devotion ask him/her why this happened? Better yet save your money for the rest of your life and donate it here and now to noble/well-respected charities and make a difference for the world around you today.

And I'm Out,

Aveh

Pete said...

ALright then.....

Can we prevent hurricanes? Nope. But here's what we CAN do: get the people who survived the natural disaster food, shelter, health care, and general security. Did we? Nope, not until much later that we should and could have. The stories coming out about what went on in the superdome and convention center are horrific: little kids getting raped in the bathroom (or whatever area of the plumbing-less arenas served as such), teenagers running around unopposed with firearms shooting people, lack of food, lack of medical assistance, etc. etc. etc. Couple these facts with the lackadaisical attitude and even condescending remarks on the part of the oh-so-compassionate executive branch of government (and their wives), and I'm PISSED. The head of FEMA said he didn't even know there were people IN the convention center (oh, wait, this is more than a day after video was being broadcast on CNN); and let's remember who told all those people to GO to the convention center (Trebec answers, the question is: "Who are the authorities?"). It's that kind of crap that I'm talking about. I mean, c'mon, it's just absurd.

Jeff said...

Talk about freaking out though.

French Quarter to re-open Sept. 26.

Basically, 126,000 get to move back in the next week or so. Yeah, a lot of people have been displaced, but the administration in New Orleans and Louisana in general should be pointed at for freaking out and losing their calm in their time of calamity. Yes, I understand that the proverbial shit hit the proverbial fan. But, come on - that Parish President FLIPPED OUT on NATIONAL FUCKING TELEVISION for God's sake. Granted, he had a reasonable explanation for doing so; but still, get some composure. But the Mayor of the city has no excuse. He constantly berated the National Government and his state government. He told anyone that would listen that everyone not helping is a bad person. He predicted casualties in excess of 10,000 based on absolutely no evidence and for the sole purpose of rousing sympathy for his poor city. Yeah, I feel bad. But shit happens dude. Get some composure, figure out the next step and then act. Don't start bitching and pointing fingers because YOU were ill prepared.