Economic costs of Katrina
Charlie Stross goes for the worst case scenario:
The actual estimates for insured structural damage caused by Hurricane Katrina are currently around US $25-30Bn. The current loss of life estimates are in the hundreds (although I’d be unsurprised if the eventual death toll does not eventually top 9/11 by quite a margin). But the economic damage from closing the Port of Southern Louisiana for up to three months is huge — plausibly equal to 5% of the US balance of trade with the rest of the world. I can’t put a figure on that total, but I’d be surprised if it isn’t an order of magnitude more than the $25-30Bn insurance costs, and possibly even higher than the cost to date of the Iraq war and occupation ($200Bn). A couple of hundred billion here, a couple of hundred billion there — pretty soon we’re talking real money.
What are the likely consequences (locally and globally) of blowing a 5% of GDP sized hole under the waterline of the US economy?
Course, if the port is closed for that long a time, other US ports will take up the slack, so the damage to the US economy as a whole might be less than these figures suggest. Locally though the picture must be bleak. The larger the damage, the more people will become unemployed because either the business they’re working for was destroyed by Katrina or it went bankrupt in the aftermath… Having the port out of comission for 3 months means no work for the people who’d normally work there. Not a pleasant vision for people who already may have lost possessions, their house or relatives…