Hurricanes can cause tremendous destruction and terrible fatalities. But in the U.S, with its massive and diversified economy, their impact is tough to see from the macro level. Citi:
– In the aftermath of hurricane carnage of historic scope in the highly populated U.S. mid Atlantic, a huge impact on living conditions in New York and New Jersey should be expected for at least some weeks. At the same time, history shows little discernable macroeconomic impact from hurricanes. Even hurricane Katrina is difficult to recognize in macroeconomic activity measures and the latest severe example in Sandy is unlikely to prove different.
– Storm preparations and repair alter categories of spending, weakening discretionary activity for a time while boosting “staples.” The destruction impacts wealth and boosts output measures through reconstruction over several quarters, though even in the latest case this may be difficult to measure across macro statistics and industry-level data.
– Labor productivity and incomes are weakened for a time and non-labor costs for business rise as transportation and other bottlenecks arise in affected areas. But unlike the earthquake in Japan, there appears to be no lasting damage to major U.S. production facilities that would severely harm U.S. output potential.
The U.S economy also appears to be RECOVERY PROOF…This from John Taylor:
In his article “A Slow but Steady Climb to Prosperity” in today’s Wall Street Journal, Alan Blinder argues that “The U.S. economy is improving.” I wish he were right, but the data—even much of the data he mentions—do not support that view.
First, he admits that real GDP growth—the most comprehensive measure we have of the state of the economy—is declining; that’s not an improvement.
Second, he admits that, according to the payroll survey, job growth isn’t faster in 2012 than 2011; that’s not an improvement either.
Third, he mentions that the household survey shows employment growth is faster, but that growth must be measured relative to a growing population. If you look at the employment to population ratio, it is the same (58.5%) in the 12 month period starting in October 2009 (the month he chooses as the low point) as in the past 12 months. That’s not an improvement.
Fourth, he shows that the unemployment rate is coming down. But much of that improvement is due to the decline in the labor force participation rate as people drop out of the labor force. According to the CBO, unemployment would be 9 percent if that unusual and distressing decline–certainly not an improvement–had not occurred.
He then goes on to consider forecasts, saying that there are promising signs, such as the housing market. The problem here, however, is that growth is weakening even as housing is less of a drag, because other components of GDP are flagging.
If you want to look at forecasts, consider this chart of the Fed’s (Federal Open Market Committee’s) forecast for real GDP growth in 2012. It is a depressing picture of a worsening outlook, meeting after meeting, not an improving outlook.
Dr Amartya Sen , the noted economist, pointed out the strange fact that, wheresas the occurrence of natural disasters does not discriminate between politics and wealth in nations, one outstanding trend emerges over the past 50 years.
The casualties in lives is inversely correlated with national wealth to a degree, but is spectacularly reduced in countries with freedom of expression, a free press, and a democratic government.
Cynics might say that this is due to the lack of tolerance for rulers who allow famine or hardship to be any greater than possible- wheresas authoritarian regimes are more indifferent to their subjects( no democratic come-back for failure) Be that as it may, the fact is that no reasobaly affluent free country has experienced mass famine since World War 2. Mass Famine, it seems, requires the active assistance of malevolent or callous despots.
It is small wonder that Green advocates of widespread reduction of population ( De-Peopling) or living standards are now openly calling for abolition of democratic freedoms- admitting that the kind of policies they propose would never survive scrutiny by elected politicians or a free Press!
The call for authoritarian rule cannot be justified ,both for moral and ethcical reasons, and on grounds of its proven failure.
It is now an axiom that authorititarian/ dictatorial rule causes more woes than the problems it presumes to address.
Hold fast to that simple fact, and our children may yet escape the jaws of Hell
Dr Amartya Sen , the noted economist, pointed out the strange fact that, whereas the occurrence of natural disasters does not discriminate between politics and wealth in nations, one outstanding trend emerges over the past 50 years.
The casualties in lives is inversely correlated with national wealth to a degree, but is spectacularly reduced in countries with freedom of expression, a free press, and a democratic government.
Cynics might say that this is due to the lack of tolerance for rulers who allow famine or hardship to be any greater than possible- whereas authoritarian regimes are more indifferent to their subjects( no democratic come-back for failure) Be that as it may, the fact is that no reasonably affluent free country has experienced mass famine since World War 2. Mass Famine, it seems, requires the active assistance of malevolent or callous despots.
It is small wonder that Green advocates of widespread reduction of population ( De-Peopling) or living standards are now openly calling for abolition of democratic freedoms- admitting that the kind of policies they propose would never survive scrutiny by elected politicians or a free Press!
The call for authoritarian rule cannot be justified , both for moral and ethical reasons, and on grounds of its proven failure.
It is now an axiom that authoritarian/ dictatorial rule causes more woes than the problems it presumes to address.
Hold fast to that simple fact, and our children may yet escape the jaws of Hell