We've had plenty of major disasters in the US. All have their role in affecting the US economy, but for one natural disaster to drive the country into recession, it'd have to smack one *very* large linchpin area.
Already the IEA response to release reserve oil into the markets has started to calm speculation fears about oil prices. Now it would be nice if those soothed nerves showed up at the pump...
Make visible what, without you, might perhaps never have been seen. - Robert Bresson
I was watching a business programme yesterday which was focussing on this issue. The experts (although I'm always suspicious of anyone that calls themselves an expert) thought that the worst economic damage would be a 1% drop in growth, but the economy should return to its base rate of growth within a couple of quarters. Generally western economies bounce back well from natural disasters, mainly because of large amounts of disaster-recovery money being channelled into the area.
While that's good news for the economy, one concern is exactly who this growth will benefit. While those involved in the building industry will do ok (and the owners of construction companies will do very well indeed) it could be quite a while before the poorer residents get back to what they would call a normal quality of life. Hopefully there will be the much talked about "trickle-down effect" and the rebuilding will provide employment for enough people.
The other main factor which concerns economists is the damage done to oil refineries in the area. Often when refineries are flooded they cannot be repaired and need to be almost rebuilt from scratch. This will mean higher petrol prices for a while, but the economy should be able to cope with this for a while, especially if the government frees up some of it's reserves. [ September 06, 2005: Message edited by: Dave Lenton ]
There will be glitches in my transition from being a saloon bar sage to a world statesman. - Tony Banks
Half of the crap that we experience here is due to self-fulfilling prophecy.
Somebody says something in jest, a new team crafts a story, or some guy at the water cooler has a theory and all of a sudden, we create the same situation that was mentioned. Someone mentions a fuel shortage and everybody runs out and fills up every SUV, car, boat, weed wacker, and go cart they have and... oh look here... A SHORTAGE.
Well lookie here Ma, we gots ourselves one uh dem der shortages jus like em smart guys in da news said we wuld.
That's one thing about petroleum shortages that's nice, actually; it's hard to hoard a lot of gasoline. If somebody says there'e going to be a sugar shortage, some half-wits will run out and buy 100 sacks, and indeed, it's a self-fulfilling prophecy. But even if I fill up my weedwacker (actually, mine's electric, but I digress...) I've only got room for so much gasoline.
Re insurance companies ... The strong ones will be just fine. Investors are still buying stock in the one that pays my bills. We've contributed millions to aid and waived any penalties or suspensions for folks who can't pay premiums for a few months. The losses will be big numbers for folks like you & me for sure but that's what the companies are there for.
I do hope that the focus on the gap between rich & poor has some effect, as well as the great fossil fuel scare.
A good question is never answered. It is not a bolt to be tightened into place but a seed to be planted and to bear more seed toward the hope of greening the landscape of the idea. John Ciardi