In Human capital remains intact, an article in the Lake Charles American Press, reader and email correspondent Dr. Michael Kurth details some of the economic realities of Hurrican Katrina - in the final analysis, we will rebound.
Unfortunately, from another email referencing an unofficial estimate from a government employee, I've learned that the number of dead in and around New Orleans could be approaching 10,000.
But Dr. Michael Kurth, head of the Department of Accounting, Finance and Economics at McNeese State University, said if he could put an economic headline on the event, it would be, “We’ll bounce back.”
Read the rest - includes a picture of an oil platform washed ashore.
“That’s not to say they weren’t dealt a severe blow, but the stuff that really matters is the human beings and what we call the human capital — their education, their skills, your institutional infrastructure, and your market system, your economic system. All that’s intact. You don’t have to touch that. So you are basically rebuilding physical structures, and that will be accomplished over time and actually very quickly.”
“When you get a catastrophe like 9/11 or an earthquake in California or a hurricane in Louisiana, you are wiping out physical capital. But in a place like the United States, our physical capital really accounts for a relatively small proportion of our prosperity, and it can take surprisingly little time to actually rebuild it.” However, Kurth said, in the meantime, the economic blow to the New Orleans area as well as the state will be significant.
“This is a big chunk of the whole state,” Kurth said, adding that it could have tremendous effect on the state budget of Louisiana as well as Mississippi. “It’s going to be a long time getting a lot of economic activity up. We are really going to have to see the total damage assessment, and it will probably take a week or more to see just how bad the damage is and just how long everything will be down.
There has been concern about the effect that Hurricane Katrina will have on oil and gas supplies, and some say that the hurricane caused a disruption in oil and gas production at the worst possible time. There are nearly 700 million barrels of oil stored in underground salt caverns along the Texas and Louisiana Gulf Coast, but the big problem is refining capacity.
Refining capacity has dropped significantly — even within the past two months after fires, explosions and Hurricane Cindy resulted in unscheduled down time. Then Hurricane Katrina forced eight refineries along the coast to shut down. President Bush is expected to tap into those emergency petroleum stockpiles to help refineries that have been affected by the storm.
Kurth said even the oil and gas concerns that are a direct result of Hurricane Katrina may be short term. The bulk of the petrochemical industries stretch from Baton Rouge to Houston, and most of those industries are built to withstand strong storms, he said. The Gulf of Mexico — the center for offshore oil and gas production — accounts for one-fourth of the United State’s oil output. More than 950 oil rigs operate in the Gulf of Mexico, and the United States produces 5.3 million barrels of crude oil a day.
I wonder how far the rigs that came ashore (or 'abridge') traveled?
Is there still one missing?
Posted by: clintcarter | Thursday, September 01, 2005 at 12:16 AM