The power outages and shuttered airports may stop the engines of commerce for several days, but Hurricane Irene might have provided some short-term economic stimulus as billions of dollars will likely be spent to repair the damage to the East Coast over the weekend.
Cumberland Advisors Chairman David Kotok saw the storm as likely jolting employment in construction, an industry paralyzed by the bursting of the real estate bubble in 2008.
“We are now upping our estimate of fourth-quarter GDP in the U.S. economy,” he said in an email Sunday. “Billions will be spent on rebuilding and recovery. That will put some people back to work, at least temporarily.”
Kotok expects GDP growth — which limped along at less than a percentage point for the first half of the year — to exceed 2 percent in the last three months of the year and potentially reach 3 percent.
Mark Merritt, president of crisis-management consulting firm Witt Associates, said the hurricane should provide a bump in economic activity over the next few months.
“After a disaster, there’s always a definite short-term increase,” Merritt said. “There will be furniture bought, homes repaired, new carpet, new flooring, all the things affected by flooding.”
Nonetheless, Merritt noted that the increase could be short-lived, as insurance and utility rates should eventually rise to cover the losses associated with the hurricane.
Embedded within those projections are questions about whether Congress and President Barack Obama can set aside recent hostilities to make sure there is sufficient cash for the Federal Emergency Management Agency’s disaster relief fund. After blizzards struck last winter and tornadoes this spring, the fund has less than $1 billion available, which means that Congress might have to approve supplemental appropriations.
“Washington may set aside the usual destructive and divisive partisan political wrangling and act in the interest of the nation,” Kotok said. “That means there will be a flow of federal financial assistance to the disaster areas. We also suspect there will be a rapid response rather than Katrina-type delays. FEMA lives under a microscope these days.”
Obama convened a video teleconference on Sunday morning to make sure that federal officials coordinated with their state and local counterparts on the storm’s impact on critical infrastructure for energy and transportation.
Irene struck at a delicate moment for an economy that seems close to teetering into recession for the second time in four years. Policymakers seem trapped by the need to reduce the national debt while simultaneously finding ways to boost job growth. Consumer confidence has plunged as the unemployment rate has hovered above 9 percent.
At first glance, Irene would appear to be another body blow to a delicate economy. The storm raced up the Carolina coast this weekend to New England, its autobahn-speed winds, punishing rainfall and flash floods shredding houses, buildings and roads.
Well things need to be rebuilt thus in the end this will boost the economy in the 4th quarter. Infrastructure spending is one of the BEST economic boosters around.
All of the damage estimates in this story are going to be found to have been too high. The storm dumped a lot of rain, but the damage has been much less than forecast.
Meanwhile, the economic impact of a lost shopping and vacationing and gambling weekend will be in the tens of billions. People heeded the calls to evacuate -- and they did. The Atlantic casinos alone estimated they lost over $40M just in one night from no business.
A better guess is that whatever "benefit" might be gained from replacing carpets and furniture and power lines will barely make up for the lost economic activity from having millions of people home and not consuming.
Looking on the bright side Obama won't be able to use this storm as an excuse for his failure to create jobs...However, any jobs created cleaning up after the storm are only temporary.
We don't expect much help from FEMA...didn't get any help from FEMA after the devastating tornados in Alabama and Georgia several months ago. People are still sitting on the side of the road waiting for Obama to come through as he said he would do when he made his photo op among the devastated natives.
He talks a good game but there's no action. As they say down here...all hat and no cows. He made it clear he didn't give a rat's behind that Texas was on fire earlier this year. Never sent one bit of help. Not one drop of rain...I'm beginning to doubt his diety claims...you know "We are The One we have been waiting for" (What ever the heck that means).
Wow Politico, ever read Frédéric Bastiat's "What is Seen and what is Unseen"? If this creates economic stimulus, why don't we take this a step further and pay people to beat up cities. We'll give them jobs and others jobs repairing the damage.
#4Aug. 28, 2011 - 5:07 PM EST
Wow Politico, ever read Frédéric Bastiat's "What is Seen and what is Unseen"? If this creates economic stimulus, why don't we take this a step further and pay people to beat up cities. We'll give them jobs and others jobs repairing the damage.
Right on..maybe we could provolk Iran to attack us and we could create millions of jobs trying to save our arses and rebuild our cities.
How much did Bloomberg cost NY city with his panicky response? Why did the entire subway system have to be closed, instead of just service to low lying areas?
Some will blame Obama's Hurricane Irene and Perry will blame his God for the failed economic policies. ( http://www.youtube.com/watch?v... ) Thank goodness the Centrist Independent voters will decide the 2012 election.
Be that as it may, MLK, a conservative Christian, would not even vote for Barack Obama a second time. IMO
Looks like a good job prospects for illegal aliens for a few months, they can even steal tossed furniture and take it back to Mah-eh-co. They'll be able to send billions of untaxed dollars home once again too....along with the killing a few worthless Americans by their standard tried and proved practice of drunken driving. Sure why not? The Liberal N'eatern Governors will protect them from prosecution.
If a hurricane is a boost, why don't we just start tearing up stuff. Makes as much sense as the Obama stimulus boondoggle.
Looking on the bright side Obama won't be able to use this storm as an excuse for his failure to create jobs
I'll take that bet.
Did Perry force girls to take a vaccine in Texas? Did Perry lie to the families? google: Gardasil, Rick Perry, HPV-vaccine, reactions
Did young Obama play with drugs?
The president once went to Nantucket He had work but decided to duck it So he just made a speech Then he went to the beach So if you had any hope you can chuck it
From Nantucket, he left in great haste Towards DC the president raced It's not the hurricane From which the worry came But the risk of a crisis left to waste
He spoke of great and historical pain From Carolina to the coast of Maine But the gap between us and DC Is we live in the world we see Where the president protects us from rain
Obama takes control of Hurricane Command Center
These Irene victims should only get help from the government if there are equal cuts to their Medicare and Social Security to balance out the spending. Thus sayeth Eric Cantor , the heartless SOB. Otherwise they can freeze in the dark. Or sweat in the dark. The U.S. Government has to tighten it's belt. We are all teabaggers now so get on the team and come on in for the big win. The win for TEAM U.S.A.. Our best days are ahead of us. hahahahaha lololol. (This country has become a heartless cesspool. So glad I'm not 20 years old today. I lived here while life in this country was still good. 20 somethings will inherit the wind). Enjoy the future with Cantor, Ryan and Boehner and Rick Perry, America !!!!
What damage??? So far, there has been no major damage reported! 0bama's unnecessary FED interference plus Bloomberg's idiocy in closing down Manhattan and the entire transit system will cost BILLIONS in losses to businesses!
Obama and his minions are STILL referring to this tropical storm as a 'DISASTER'!!! They will stop at nothing to manufacture their lies!
Every year, CA suffers worse rain storms, flooding, week-long power outages, homes lost in mudslides, lives lost...not to mention horrendous fires. Cuomo is out there whining about 1m New Yorkers without power - well guess what...L.A. has had up to 5-10M residents without power at any one given time! We don't complain - we live with it! We don't get FED aid for rain - only eathquakes! FEMA doesn't show up on our doorstep - most of us clean up our own property damage! Hillside areas do not even offer flood ins.!
FEMA doesn't send CA body bags when we have rain storms - when are they going to pick up the 75 body bags they dropped off at Cape Hatteras??? How much did those body bags cost No. Carolina???
Thanks to Obama's political campaign stunt gone awry, taxpayers are going to be on the hook for BILLIONS! Let's hope he doesn't pull this crap the next time a CAT 1 shows up on the radar!
Loved Obama's name placard at his FEMA photo-op; like maybe people wouldn't know who he was.
Or his job either. You're right- that's hysterical.
Obama takes control of Hurricane Command Center
Bwahahahahahahahaha! Very nice.
The power outages and shuttered airports may stop the engines of commerce for several days, but Hurricane Irene might have provided some short-term economic stimulus as billions of dollars will likely be spent to repair the damage to the East Coast over the weekend.
Can you see Obama meeting with AxelPlouffe and asking how to create more hurricanes?
Enjoy the future with Cantor, Ryan and Boehner and Rick Perry, America !!!!
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