Katrina and Economy

Hurricane Katrina was one of the most devastating hurricanes the United States has seen. It has affected the United States in many different ways. The costs to repair the damages from Katrina are an estimated $70 billion to $130 billion. Katrina has had an unusual impact on the U.S. job market. Because of Katrina many of our oil refineries in the region hit by Katrina are down. Although Katrina has had so many negative effects on the U.S., some still argue that Katrina had a few positive effects on the U.S. Do the positive effects outweigh the negative effects? Or is it the other way around? Ultimately, how has the devastation from Hurricane Katrina affected the economy of the United States?

Many people argue how badly Katrina affected the nation’s oil supply. In “Energy Lessons from Rita and Katrina,” by Bill Prindle states, “Katrina’s economic and energy impacts put the nation’s unsustainable appetite for ever more costly oil and natural gas in stark relief.” He goes on to state, “This disaster is a wake-up call for fundamental and sweeping changes in U.S. energy policy,” (Prindle). He argues that in order to resolve the issues on limited oil and natural gas Congress must place stricter fuel efficiency standards on cars and trucks (Prindle). Others like Mark Zandi believe that

this situation could be worse. “Some 5% of the country’s oil production is off-line now. You’d need something like twice that-- 10% of production shut down across the country-- to seriously disrupt the economy,” (Zandi). He goes on to say that even if this did happen we would only experience a brief recession (Zandi).

Hurricane Katrina has also had an impact on the U.S. job market. According to USA Today, between 280,000 and 400,000 jobs were lost due to Katrina (Hurricanes’). Right after Katrina struck, the damage by Katrina on jobs was thought to be much more than what information was gathered. David Wyss of Business Week Online states, “…the payroll and unemployment-rate numbers are nearly worthless because of the data-collection problems created by Hurricane Katrina,” (Wyss). Wyss believed this happened because “Both the payroll and unemployment data are collected by surveys -- of businesses and households, respectively. The former occupants of New Orleans weren't responding to surveys in the week of Sept. 12, when the Bureau of Labor Statistics was taking its readings,” (Wyss). Rick MacDonald of Business Week Online seems to agree with Wyss. MacDonald states, “We would also note that the Bureau of Labor Statistics' unusual treatment of the distortions in September… the BLS prepares the monthly jobs report. In September, any business the BLS couldn't reach in the affected areas was assumed to have zero employment. This likely depressed the September payroll figure by more than was actually the case,” (MacDonald).

A few people disagree on how badly