The Debate on Economic Impact from Weather
New York, New Jersey, Boston Philadelphia
The question of economic impact from severe weather occurrences stirs a lively debate. The increase in these weather occurrences and the pressures on our economy have increased the debate even more.
As Stu Ostro, Senior Meteorologist, states in his August 10, 2011 blog post on weather.com, “My preliminary tornado count (including the actual tornado counts through April and my best estimates subsequently) is 1,476 tornadoes through July 31. That’s the most on record for the first seven months of the year, beating out 2008 which had 1,397 in that period.”
And the cost of these severe weather occurrences continues to be staggering. CBS News reported that “Early estimates suggest the damage wrought by Hurricane, and then Tropical Storm Irene upon the East Coast will cost the U.S. economy $7 billion.”
Although the devastation of loss of personal property is immeasurable, there are those that believe there is a positive impact on the regional economies following a disaster. The possible positive impact comes from the rebuilding effort. Now certain economists have stated that the work being done to rebuild is merely a transfer of work that would have already been in progress. That may be true in an economic period of full employment. But, these economic times do not have robust activity in the building trades.
As stated in the Economist on March 17th, 2011 “Reconstruction itself, of course, also helps to offset the negative impact of a drop in output in the aftermath of a disaster. Business booms for builders and producers of capital goods. Disasters probably do not actually stimulate the economy because additional production in some sectors may be displacing spending elsewhere, though this is less of a worry in an economy with a lot of spare capacity.”
As this debate continues, it may be less argued that homes and buildings are rebuilt better and with more forethought, so as to avoid the same destruction occurring again. As stated in the New York Times “When something is destroyed you don’t necessarily rebuild the same thing that you had,” said Mark Skidmore, an economics professor at Michigan State University. “You might use updated technology, you might do things more efficiently.”
In rebuilding, we should improve preparedness by using materials that will withstand a reoccurrence of the disastrous event. Areas to be considered are installing windows that resist flooding and windows that can stand up to high winds and projectiles in the cases of tornadoes and hurricanes.
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