In the wake of Hurricane Irene, I am noting that many principles of economics are applicable to the aftermath.
Due to the hurricane, towns will need to be rebuilt, according to the article, “With Help, Towns Rebuild” in the September 1st Wall Street Journal. This job will require the construction trade (lumber, workers, concrete, etc.). Since these resources will be in demand, I expect that their prices will increase, and the resources will eventually become scarce.
Government intervention will also play a role in the reconstruction. According to the article, “Relief Crews Tally Damages” in the August 31st Wall Street Journal, the Federal Emergency Management Agency is providing funds to rebuild many towns and cities. In addition, the Department of Health and Human Services is aiding hospitals and health centers in affected areas. Clearly, government intervention can improve society’s welfare when cities do not achieve efficiency.
Additionally, business is affected by Irene. According to the article, “River, at 100-Year High, Ravages New Jersey City That Once Thrived on It,” in the September 1st New York Times, the immense flooding has damaged businesses in Patterson, NJ, as well as along the East Coast. In addition, thousands of people have been evacuated from their homes. Flooding and evacuation hurts business because stores and plants are shut down, and people cannot buy their products. Therefore, businesses and individuals are hurt as they are not able to receive income, as one person’s spending is another’s income.
On a personal note, my Grandmother, who resides in Long Beach, New York, was evacuated from her home due to the immense flooding that threated her safety. In Long Beach, the water from the Ocean has flooded streets, as well as my Grandmother’s basement. As a result, she had to evaluate the opportunity cost of fixing her home. She decided to hire workers to pump the sea water out of her basement. She is now in Massachusetts, sipping wine, while visiting her sister.
No comments:
Post a Comment