August 31, 2005

Katrina Eats Gulf Coast

The New York Daily News is calling New Orleans the lost city, swamped, being looted and now under martial law. The disaster is being compared to the 2005 Asian tsunami, Hiroshima, and Pompeii. In terms of property damage, this is surely reasonable, though the fact that there was significant advance warning and a concerted evacuation effort will hopefully mean that the loss of life will be nowhere close.

Eighty percent of New Orleans is under water along with both airports and the flood waters are expected to rise further through the broken levees. CNN just reported that the 12-15,000 people in the Superdome may be stuck there for up to a week without working plumbing or air conditioning.

Mississippi's coast and its casinos have been flattened and thousands in Alabama are without utilities.

Corporations are stepping in, with Geico suspending billing and advertising its contact information on the radio and the big three automakers are allowing customers to defer car payments for up to 90 days. Obviously, people without mail service are going to need to be proactive about making contact with the companies as phones become available.

As of this posting, these are some of the latest situation reports. Also here's a little preview of the gathering vultures and a classic example of why economists are so easy to dislike:

... "Apart from refineries, some pipelines may also have been damaged," said Englund. "Companies can switch over production to other refineries but it's not a quick process. It's very likely that we could have a short-term gas crunch which will keep prices elevated."

Hidden benefits lurking?

J.P. Morgan senior economist Anthony Chan agrees that higher energy prices will curb both regional and national economic growth in the near-term.

"I think a 0.2 percent decline in economic growth due Katrina's impact on oil and the regional economy is a realistic assumption," Chan said. Longer-term, Chan believes hurricanes tend to stimulate overall growth.

Said Chan, "Preliminary estimates indicate 60 percent damage to downtown New Orleans. Plenty of cleanup work and rebuilding will follow in all the areas. That means over the next 12 months, there will be lots of job creation which is good for the economy."

Prof. Doug Woodward, with the Division of Research at the Moore School of Business at the University of South Carolina, has researched the economic impact of hurricanes.

"On a personal level, the loss of life is tragic. But looking at the economic impact, our research shows that hurricanes tend to become god-given work projects," Woodward said.

Disasters are good for the economy, he said. Within six months, he expects to see a construction boom and job creation offset the short-term negatives such as loss of business activity, loss of wealth in the form of housing, infrastructure, agriculture and tourism revenue in the Gulf Coast states.

In a note late Tuesday, Standard & Poor's estimates that Katrina could "shave a few points off our forecast of 3.7 percent growth." ...

Oil hit a new peak at over $70/barrel and who knows where it will stop:

... At least seven oil drilling rigs were adrift in the Gulf of Mexico yesterday and two companies said they couldn't find their rigs and platforms after Katrina plowed through the area.

... Katrina closed the Louisiana Offshore Oil Port, which usually handles about 1 million barrels of crude oil a day, or 11 percent of U.S. imports. It consists of mooring buoys, platforms and pipelines.

The port will not resume oil shipments until power is restored, scheduling manager Mark Bugg said. Entergy Corp., which provides power for the pipeline system connecting the port to refineries, said it will take weeks to rebuild its electricity network in Louisiana.

Shell, Europe's second-biggest oil company, said its Capline crude oil pipeline connected to Gulf of Mexico offshore production was shut because of power failures after the storm. ...

DKos: Pictures and more. ColdFusion04 talks about the ebb and flow of media coverage and the spreading PTSD. While the disaster was slowly sinking in yesterday, the president decided to play guitar, though he's now made the huge sacrifice of cutting his vacation short by two days to 'oversee' the cleanup, which I guess means that he'll be looking at it from a lofty perch and figuring out how to get on with his life.

Donation information here.

Posted by natasha at August 31, 2005 03:08 AM | US News | TrackBack(1) | Technorati links |

Best microcosm I've seen of the disaster so far (from a wire report somewhere): "Little islands of red ants floated in the gasoline-fouled waters through downtown." What an observant reporter, and what a viscerally disgusting image!

Posted by: sean at August 31, 2005 07:31 AM

They should put the thousands of refugees from New Orleans in hotels, not in the Astrodome. People need to be able to live like human beings, not like animals. The Superdome was a safe bet kind of shelter for temporary refuge from high winds and high water. It was a great place for 75,000 people to watch a football game, but not for tens of thousands to live in (even if the power, water and sewer were still working). Same thing would apply to the Astrodome.

Posted by: Richard Pope at August 31, 2005 05:36 PM

Good for the economy??? These people are insane. Hey, why not burn down every city in the country? The rebuilding required then would produce an economic boom the likes of which the world has never seen.

The money for reconstruction has to come from somewhere. If it exists, why not use it for constructive projects immediately, instead of waiting for a disaster and using it to merely rebuild what we already had?

Posted by: felice at August 31, 2005 09:09 PM

I retreat from previous comment. Looks like every hotel room within at least 500 miles of New Orleans is occupied by hurricane refugees already. So the Astrodome is a halfway decent temporary solution. And at least Houston is dry and functional.

It isn't going to be easy for find temporary housing for over a million people and build permanent replacement housing for several hundred thousand (maybe over a million) people.

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