Tuesday, October 7, 2008

Real Hurricane Damage

Surfside Beach, Texas, has electricity again.

The sewer system is “still up and down.” And water? That will come later. They won’t be able to repair many of the leaks until more storm debris is moved.

Surfside Beach was well away from the center of Hurricane Ike as it made landfall near Galveston, Texas. On the right side of the storm, whole towns were effectively leveled by the 4-meter storm surge. Houston is finally back in school, but still watching to see which of its businesses will be able to reopen.

I wrote yesterday about the importance of the real economy and how the financial crisis could lead us to overlook things that are more important. The hurricane damage that is still being repaired in Houston, along most of the Texas and Louisiana coasts, at least as far inland as Missouri, and also along most of the length of Cuba, is an example of the real economy at risk.

The Federal government basically blew off the hard-hit greater Houston area, providing only the most minimal assistance for its hurricane disaster recovery as it sought to save its money to bail out Wall Street. That was almost a month ago. Now as Washington obsesses over a few small businesses that allegedly may have short-term layoffs because they ran out of money and can’t get short-term loans, the unemployment statistics are starting to pile up from Texas on north. It seems safe to say that more than a million people are or were temporarily unable to work because workplaces were not ready to operate. Sometimes all they are really waiting for is electricity.

The U.S. government has spent, I believe, over a billion dollars on recovery efforts from Hurricane Ike, and more for Hurricane Gustav before it. That is a lot of money. But it pales in comparison to the $3 trillion it has sunk into financial markets in the past three weeks — apparently over $1 trillion yesterday alone. All that money is being put out there to get the economy moving again. But one of the most powerful ways to get the economy moving again is to clear debris from roads and restore electricity so that people can go back to work and back to school. It matters how quickly that happens, and it would take a lot less than a trillion dollars to speed up the recovery by a matter of weeks.

The President claims to be a resident of Texas, but his recent misplaced priorities show that his real home is on Wall Street. Ultimately, the U.S. economy does not live and die by what happens on Wall Street. In the meantime, we still do not know how many people died when Hurricane Ike hit the Texas coast.