When you listen to the media about recessions, crime or other calamities, they have all the stats. They forget that those words mean little if you lost your job. You are in depression. If your house was robbed or car hijacked, you are in depression. If your house gets flooded, you are in depression. I just had another sad thought, consider anyone that had fate meet them in the recent hurricanes. Now, you need money to eat, another car to find or drive to work and a place to sleep. I don't want to get off topic, but this reality drives home a point about the Federal Reserve. In their formula to engineer life, they do not count under inflation all those things that we need: fuel, food and shelter. This is why I cry, End the Fed!
Anyway, I am looking at those hurricanes even though there are other serious problems out there like the earthquake in southern Mexico or the wildfires out West.
Katrina v. Harvey
A decade after the devastating hurricane hit New Orleans, the city is still in a rebuilding mode. Yes, it takes that long and as you will see, many businesses and people never recover. It gets worse. Just last month a normal rain downpour caused flooding in New Orleans. Why? The cities water pumps went offline, malfunctioned or had cutbacks in maintenance. Point? They are not ready for anything over a summer shower.
In any event, the city was spared from Harvey, however here is some data that will relate to Houston to Texas and to the nation. New Orleans lost a sizeable chunk of its population. Keep in mind that geography and demographics plays a part in the results. There are 90,000 fewer people living there. It lost 95,000 jobs and this equates to $2.9B in loss of wages and also a loss of revenue for the city and state. We know from historical tendencies that after a disaster 40% of small businesses never come back. By the way, New Orleans has jobs available. There are 12.5% vacancies in jobs that need to be filled and sadly, this is the most vacancies in the US. This is a BS stat. Businesses refused to spend money to train workers and now, they complain that they can't find skilled people...Back to N.O.
New Orleans has limited entry and exit roads. It also was losing population long before Katrina. The city is smaller, but it has good local transit services. It has a strong port and it is central to transportation of goods by the Mississippi River.
Houston is much larger and spread out over the terrain with great access roads. It has been growing in size and population for a long time. It has poor local transport services, however the city is economically diversified and it too has a strong port.
In the immediate month after Katrina, New Orleans lost tourists jobs, health care and port jobs. The same will happen in Houston. One big positive for Houston is that it had a large number of rentals. This will help smooth over any loss in population. One big negative is the loss of an estimated 500,000 cars. In a sprawling city, a car is a necessity. Maybe the government will do another "clunker" vehicle program?
At this time I like to remind you that in natural disasters, water can be the destructive force and at the same time, the most important need to survive. If my water concept had been utilized, the estimated 27 trillion gallons of water to hit the city would have had different results. There would have been less damage and up to two-thirds of the water captured for future use like for drinking and agriculture, but then again, I'm just a blogger, a nobody.
"Take another little piece of my heart..."
- Janis Joplin
The news did a nice job in getting down to street level with the reporting of Harvey. It revealed many kind and generous acts. It is great to hear all the good Samaritans, but the news does a terrible job with insurance agencies. Just this past Sunday, 60 Minutes had a story on insurance fraud relating to hurricane Sandy. Yes, it takes this long for some real truth. It gets worse. FEMA directed many agents to the effected areas and the people who they used, lowballed almost every citizen that they were to serve. It gets worse than worse. It was later discovered that insurance companies rewrote claim figures and estimates to cheat customers. Last year, there was 1,400 arrests nationally due to fraud in the US. With this event filled hurricane and wild fires season, those numbers could explode. The only thing that could hold down the numbers is due to the limited agents working on an overloaded cases.
Costs:
Katrina cost $160B in today's dollars. It was actually $106B then. It is another example of how the Fed has destroyed the purchasing power of the dollar. Harvey has early estimates touching $140B. Irma's early call was overblown at $250B. Fortunately, it didn't hit Tampa hard The sad part is that many small farms like in the tomato capital of Immokalee will never return. This will cause more imports and only add to our national debt.
Jose? Let's hope the good Lord turns it out to sea, however costs will rise due to two factors. One, the sea is rising and thus, storm surge will be worse. Secondly, people like to live near the sea. It is therapeutic. Who would not like to spend their last years taking walks on sandy beaches with fishing, boating and swimming? The concentration of homes along with it being prime real estate drives up the costs. This would not change even in a gold standard. It is life. It is the way we are made up. The only problem is who pays when it goes wrong? Our insurance companies need an overhaul. They take the money in good times, but seek loopholes when the fat lady sings. In addition, the federal government almost insures every property in coastal areas and this is wrong. If you cannot afford to pay for your good like, then you are not ready for it. Taxpayers subsidize your lifestyle. Who subsidizes the rest of us? Don't misunderstand me, each should stand on his own two feet. I feel for you if you are standing in two feet of water, but maybe this is the time to reevaluate your life. Come stand in two feet of snow with me. Shoveling is good exercise and there is no danger of tornadoes or hurricanes, however I can't rule out quakes. Peace.
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