Economic Impact of Katrina

Andrew Samwick reads the CBO's rapid analysis of the economic impact of Katrina:

Vox Baby: Significant but not Overwhelming: So says the Congressional Budget Office in its preliminary report on the likely economic impact of Hurricane Katrina on economic growth. Quoting from the opening paragraph of the report:

Katrina could dampen real gross domestic product (GDP) growth in the second half of the year by ½ to 1 percentage point and reduce employment through the end of this year by about 400,000. Most economic forecasters had expected 3 percent to 4 percent growth during the second half, and employment growth of 150,000 to 200,000 per month. Economic growth and employment are likely to rebound during the first half of 2006 as rebuilding accelerates.

How do they get these numbers? Start with an overestimate of the affected areas:

The gross state product of Louisiana is about 1.2 percent of U.S. GDP, and that for Mississippi is about 0.7 percent. If half of that product were lost for three months (September to November), the level of real GDP would be lowered by about 1 percent from what it otherwise would be, cutting about 1.3 percentage points from the annualized growth rate for the third quarter and about 2.7 percentage points from the fourth quarter.

They then argue that production of the key industries in those areas will be unlikely to be affected for that long, putting the impact at about 1 percentage point (off an annualized growth rate) in each quarter. They then conduct an analogous exercise to estimate the loss in jobs:

Employment for September will decline significantly—estimates of the impact range from 150,000 to half a million—as a direct consequence of the hurricane. The Bureau of Labor Statistics (BLS) may or may not be able to estimate the size of this effect when it releases the September data on October 7. Employment will increase in subsequent months, as workers return home and businesses reopen and as reconstruction activity gathers steam. The large-scale relocation will generate additional demand for workers in receiving communities; some of those jobs will be filled by the evacuees themselves. Once New Orleans residents are able to return home, the net effect on the level of employment will be positive, as reconstruction activity continues.

A reasonable first pass at the questions they were asked. It is not CBO's fault that rebuilding after a natural disaster is one of the more obvious times when GDP--as a measure of economic well-being--comes up short.

I'm now guessing that we are down $100 to $200 billion in total national wealth (i.e., two to four times the predicted total loss-of-GDP shortfall).

What scares me is that hurricane season is only half over.

Comments

[Bruce Ferguoson]

A free market economy would not rebuild New Orleans. Environmentalist would not rebuild New Orleans.

[Ridigita]

A free market economy built New Orleans. A free market ecomony needs New Orleans. New Orleans is part of one of the Worlds biggest port systems.

"New Orleans is not optional for the United States' commercial infrastructure. It is a terrible place for a city to be located, but exactly the place where a city must exist. With that as a given, a city will return there because the alternatives are too devastating. The harvest is coming, and that means that the port will have to be opened soon. As in Iraq, premiums will be paid to people prepared to endure the hardships of working in New Orleans. But in the end, the city will return because it has to." George Friedman, "New Orleans :A geopolitical prize", Stratfor , http://www.stratfor.com/news/archive/050903-geopolitics_katrina.php

I am not quite sure of the environmental reasons for not re-building New Orleans however humans have been living river deltas since we learned to fish. As for building in Hurricane belts even with category 5 hurricanes there is huge body of knowledge, there must thousands of Philipino /Japanese/Costa Rican/Australian/Cuban etc engineers and architechs who know how to build in these zones.

[marquer]

>"...the net effect on the level of employment will be
>positive, as reconstruction activity continues."

Sigh. See Bastiat's parable of the broken window and the glaziers.

Destruction is not profit. When, when, will they learn?

[Coriolis]

"How do they get these numbers? Start with an overestimate of the affected areas:The gross state product of Louisiana is about 1.2 percent of U.S. GDP, and that for Mississippi is about 0.7 percent."
Excuse me, but isn't everyone upstream and downstream also affected? (No pun intended.) The lost opportunity for relieving city folks of travel dollars in Michigan on the labor day weekend alone is in the millions. (URL below.) I think the affected area is global. Free trade and all, ya know.
Has the CBO been politicized while Coriolis was busy?

[dsquared]

it seems curious to me to frame an assessment of the economic impact of a hurricane in terms of *Gross* (ie gross of depreciation) Domestic Product, when the depreciation of capital assets is exactly what the hurricane caused.

btw, if a free market economy does not want to rebuild New Orleans it is going to find things rather inconvenient as the Mississippi does not meet the sea anywhere else.

[Randolph Fritz]

Remember, please that a substantial portion (IIRC, 30%) of the US oil refining capability has been affected by Katrina. There's going to be a ripple effect. Best case, I think, we are going to see six months of high fuel prices: that's global--no-one else has refining capacity to take up the slack. Worst case, some refineries (how many?) will need to be completely rebuilt or moved. That takes four years, assuming that all the siting, environmental impact, and permitting issues are already resolved. We may get to try some of our alternative energy technologies sooner than we planned.

Now, all this is a fairly uninformed opinion. Anyone have some solid information?

[rdb]

sciam.com/print_version.cfm?articleID=00060286-CB58-1315-8B5883414B7F0000
Scientific American's 2001-10-01 Drowning New Orleans talks about Coast 2050
and Millenium Port

The second step: rebuild the southern barrier islands using more than 500 million cubic yards of sand from nearby Ship Shoal. Next, the Corps would cut a channel in the narrow neck of the river delta at about halfway down. Ships could enter the river there, shortening their trip to interior ports and saving them money. The Corps could then stop dredging the southern end of the river. The mouth would fill with sediment and begin overflowing to the west, sending sand and silt back into those longshore currents that could sustain the barrier islands.

The channel plan might be integrated into a larger state proposal to build an entire new Millennium Port. It would provide deeper draft for modern container ships than the Port of New Orleans and its main channel, the Mississippi River Gulf Outlet (MRGO, pronounced Mr. Go), which the Corps dredged in the early 1960s. The outlet has eroded terribly--from 500 feet across, originally, to 2,000 feet in places--and let in a relentless stream of saltwater that has killed much of the marsh that once protected eastern New Orleans against gulf storms. If the channel or the Millennium Port were built, the Corps could close MrGo.

www.coast2050.gov

Any likelihood of the plans mentioned in the article happening?

[anne]

http://www.nytimes.com/2005/09/08/opinion/08herbert.html?ex=1283832000&en=bbfe64c34e38f391&ei=5090&partner=rssuserland&emc=rss

September 8, 2005

No Strangers to the Blues
By BOB HERBERT

The tragedy in New Orleans did not occur in a vacuum. There is no way, even in the face of a storm as violent as Katrina, that a great American city should have been reduced to little more than a sewage pit overnight.

The monumental failure of the federal government to respond immediately and effectively to the catastrophe that resulted from Hurricane Katrina was preceded by many years in which the people of New Orleans (especially its poorest residents) were shamefully neglected by all levels of government.

New Orleans was not a disaster waiting to happen when the screaming winds of Katrina slammed the city with the force of an enemy attack. The disaster was already under way long before Katrina ever existed. The flood that followed the storm, and the Bush administration's ineptitude following the flood, were the blows that sent an already weakened city down for the count.

The public school system, for example, is one of the worst in the nation. Forget about educating the children, 96 percent of them black. School officials, enveloped in a bureaucratic fog and the toxic smoke of corruption, do not even know how many people are employed by the system. The budget is a joke. Money had to be borrowed to pay teachers.

The classroom environment has been chaotic. About 10,000 of the 60,000 students were suspended last year, and nearly 1,000 were expelled. Half of the high school kids fail to graduate in four years. To get a sense of the system's priorities, consider the following from a Times-Picayune editorial last fall:

"When it was still unclear which way Hurricane Ivan would go, school system employees on school system time driving school system vehicles using school system materials were sent to board up the superintendent's house."

That superintendent left (and not a moment too soon), but the abject neglect of the young remained. Long before the hurricane, the children of New Orleans had been failed by the adults responsible for them, starting in many cases with their parents and going right on up through their teachers, city officials, state officials and a national administration that sees the kids mostly as objects - totems - to be hugged during campaign photo-ops....

[monkyboy]

I agree that the economic impact will be bigger than forecast. Of course, the port facilities will be rebuilt somewhere near NO, but what about all the marginal small businesses?

How many people have to move back to a neighborhood before the local barber shop, diner, landscaper, etc. can reopen and be profitable? How many small businesses relied on old capital equipment that they can't possibly replace with shiny new equipment?

And not to sound like a broken record, but..looks like Rove stopped the relocation flights today. Washington State, where the last governor's race was decided by about 100 votes was due to get 2000 refugees, flights cancelled. Ohio, where 60,000 Demo votes would have meant President Kerry, was due for another large group of refugees...flights cancelled.

Who is in charge of gerrymandering the Katrina victims?

[anne]

http://www.nytimes.com/2005/09/07/national/nationalspecial/07home.html

September 7, 2005

Putting Down New Roots on More Solid Ground
By SUSAN SAULNY

HOUSTON - In her 19 years, all spent living in downtown New Orleans, Chavon Allen had never ventured farther than her bus fare would allow, and that was one trip last year to Baton Rouge. But now that she has seen Houston, she is planning to stay.

"This is a whole new beginning, a whole new start. I mean, why pass up a good opportunity, to go back to something that you know has problems?" asked Ms. Allen, who had been earning $5.15 an hour serving chicken in a Popeyes restaurant.

For Daphne Barconey, Hurricane Katrina disrupted plans for a grand house to be built on a $150,000 lot that she bought in eastern New Orleans just months ago.

Now, just eight days after the storm, she has a job in a hospital here, a year's lease on a four-bedroom apartment near the Galleria mall and no plan to return to New Orleans.

Jason Magee is a golf pro who says now is the time to move away from his native New Orleans. "I had been looking for an excuse to leave, and this is it," he said.

From across the economic spectrum, whether with heavy hearts or with optimism, the hundreds of thousands of people who fled the wrath of Hurricane Katrina in New Orleans are already putting down roots in new cities. If even a fraction of them decide not to return, the migration threatens a population crash that could be nearly as devastating to the New Orleans area as the storm itself.

And city officials know it. After days of asking, then demanding, now practically begging the residents of New Orleans to leave, they have mentally if not publicly changed gears and are devising strategy behind the scenes about how they will accomplish a titanic shift - in effect, a reverse evacuation....

[spencer]

The CBO estimate is a reasonable first pass.

But it neglects the impact of significantly higher prices, etc., on consumer confidence and spending.

It raises the risk that X-mas will come in below expectations -- afterall back to school was disappointing -- that could be just as big an impact as the direct economic output loss from Katrina.

[anne]

Spencer's point about secondary effects is important and a little ominous. We are suffering a fearsome tragedy, and there is no telling how readily the effects are shaken away.

[anne]

http://www.nytimes.com/2005/09/08/opinion/08thu1.html

September 8, 2005

Bring Out Your Pork

Fair warning to the suffering Gulf Coast masses: Congress is already talking of concocting "economic stimulus" and "job creation" packages as hurricane recovery tools. That sounds useful, but unfortunately those terms usually signal that the House and the Senate are about to use the crisis of the moment to roll out wasteful tax cuts for the well-off and pork barrel outlays for hometown voters.

The overwhelming need of the victims of Hurricane Katrina, coupled with the nation's shock at government ineptitude, should inspire members of Congress to sober up and become something approaching responsible policy makers. If they do decide to reform, there's an easy way to prove it. They could turn in their pork.

This summer, when Congress had to ignore only a war in Iraq, it passed the annual highway bill, repackaged as a job-creation measure. The legislation set a record of $24 billion in 6,371 "earmark amendments" - the route individual lawmakers take to lock in prized projects for their home districts, regardless of proven need.

The bipartisan boondoggles that made it under the wire included vanity highways, tourist sidewalks, snowmobile trails, a "deer avoidance" plan and a graffiti elimination program for New York. Those wishing to look for still more unnecessary spending can consider the White House's $130-billion-and-counting missile defense system, which remains thoroughly inoperable....

[me]

Brilliant ridigita

[Karlsfini]

I agree with me. (about ridigita)

AP notes that "Hurricane Katrina is erasing recent job gains and threatening an economic recovery that has been one of the few bright spots for President Bush."

Apart from the president being seen as the main victim of the hurricane, the surreal way economic news is reported...but I guess you've already noticed that. I mean, why can't we have a better press corps?

[kharris]

Angry Bear has put up a chart of New Orleans population changes which offers an interesting angle on rebuilding. While one doesn't want to assume that trends will endure forever, the population trend in New Orleans was already down. Ignoring the inertia toward rebuilding New Orleans, it is necessary to have some city near the Gulf oil and gas infrastructure, near the ports, near the fisheries (assuming the fisheries survive).

New Orleans is a special case. With good levees, it does better in routine tropical storms and hurricanes than inundated areas nearby. It will alway be vulnerable to becoming a toxic lake, though how vulnerable depends on how hard we think and how much we spend.

We ought to take a hard look at risks, costs, liveability and the like before setting our minds to reconstructing New Orleans, but that is not generally how things are done, so I can't see why it will be done this time.

[anne]

http://www.nytimes.com/2005/09/08/business/08farm.html

September 8, 2005

Alarm Growing on Storm's Cost for Agriculture
By ALEXEI BARRIONUEVO and JEFF BAILEY

CHICAGO - Two weeks from the beginning of harvest season, there is a mounting sense of alarm over a potential financial blow to American farming. Farmers in the breadbasket states rely on barges to carry their corn, soybeans and wheat down the Mississippi River, but cannot be certain that the Port of New Orleans, a crucial link to export markets that was badly damaged by Hurricane Katrina, will reopen anytime soon.

In the gulf states, the storm left farmers reeling from numerous other problems, including a lack of electricity to restore chicken and dairy plants to service, and a shortage of diesel fuel needed for trucks to save dying cattle stranded on the breached levees.

For all of them, it is a race against time.

Farmers in some states in the Midwest had already endured the worst drought in almost 20 years. The storm, moreover, flattened sugar cane and rice fields in the South. And farmers nationwide must pay more for fuel to bring the harvest in and transport crops, lowering the profit they will earn when they sell them. Now Hurricane Katrina is adding to the pain by threatening to curtail exports....

[nate]

"What scares me is that hurricane season is only half over."

Yeah, we do not need more shocks to the economy. Shocks can take a lot out of people. There is a drought in Illinois. News people are saying Katrina has dampened grain prices, which compounds the effect of the drought.

In addition to earthquakes... what if we get an earthquake, terrorism, or something else?

[nate]

previous post should say "In addition to hurricanes" and not "In addition to earthquakes".

[spencer]

I think we are already seeing a lot of indicator that many people will not be returning.

One of the interesting interview I heard was of a restaurant owner that had relocated in Little Rock.
The first thing he talked about was his child was now
enrolled in a great school he though highly of, and it was a public school! Moreover, he already had a good job in the restaurant industry until he was ready to open a new restaurant. So what are the odds that his new restaurant will be in Little Rock?

[mlhm5]

No one is talking about the environmental clean up that will have to take place prior to any rebuilding in NOLA.

Despite what the state EPA says, LA had some if not the weakest EPA laws on the book prior to Katrina and illegal dumping was rampart as well as toxic pools of chemicals not allowed in almost any other state.

Now NOLA sits in that toxic soup with not only bacterial pollutants but also chemical toxicants and heavy metals. All of which has become part of the structures and underlying land.

The toxic cleanup in NOLA is probably worse than Love Canal and no one lives at that site even today.

I cannot imagine private industry or LA paying for the cleanup so you might want to add an additional $200 billion to the rebuild total if you think the below sea level parts will ever be inhabitable.

[anne]

http://www.nytimes.com/2005/09/07/national/nationalspecial/07barbara.html

September 7, 2005

Barbara Bush Calls Evacuees Better Off
By THE NEW YORK TIMES

WASHINGTON - As President Bush battled criticism over the response to Hurricane Katrina, his mother declared it a success for evacuees who "were underprivileged anyway," saying on Monday that many of the poor people she had seen while touring a Houston relocation site were faring better than before the storm hit.

"What I'm hearing, which is sort of scary, is they all want to stay in Texas," Barbara Bush said in an interview on Monday with the radio program "Marketplace." "Everyone is so overwhelmed by the hospitality."

"And so many of the people in the arena here, you know, were underprivileged anyway," she said, "so this is working very well for them." ...

[Jason]

Just as an anecdote, I received word from some contacts that FEMA and related organizations are putting out for several hundred workers to begin the process of environmental cleanup at NOLA. The going rate I was quoted (pay for individual workers) was something like 70-80 USD per hour, plus per diem, and guaranteed minimum 80 hours per week. The word on the street is that the project is an "open book" in terms of funds, and that the work could go on for 2+ years (at those terms). Of course, the "golden rule" here is you have to know somebody to get the "gold": all this is being done on a word of mouth, who you know basis. Even with that, NOLA will never be cleaned up to "Green Fields" standards. The city will never fully recover, nor should it; the city could be rebuilt at half size, and would do just fine. The rest will be fenced in, walled off, dozed over, and sealed away in vaults/tanks.

[anne]

Oh dear....

http://www.nytimes.com/2005/09/08/opinion/08brooks.html

Katrina's Silver Lining
By DAVID BROOKS

Hurricane Katrina has given us an amazing chance to do something serious about urban poverty.

[FMguru]

New Orleans will continue to exist. The US needs a port at the terminus of the Mississippi River system, and it needs a central distribution point for petroleum extraction from the Gulf of Mexico. So the Greater New Orleans area will continue to be a place where important economic work is done. And as long as there are people there who load and unload ships and maintain the oil refineries and pipelines, they'll need a place to live, shop, eat, send their kids to school, etc.

Plus, the French Quarter survived complete inundation, and it can be repurposed as a tourist/party/jazz/historical location - Colonial Williamsburg, but with a 35-foot wall around it and drunken coeds flashing their tits.

"What scares me is that hurricane season is only half over."

I saw someone pointing out that Katrina made landfall on the 13th anniversary of Andrew's landfall - so we've already gotten 11 letters into the alphabet, while in 1992, we were still on "A". Hmmm.

[nate]

anne: what do you mean by "Oh dear..."

What are you saying about Katrina's Silver Lining By DAVID BROOKS

[anne]

There is no silver lining to tragedy; to such a tragedy. Hopefully this will lead to a change in our political lives leading us to remember again the legacy of Franklin Roosevelt; to remember Teddy Roosevelt who responded so well to the San Francisco earthquake and fires.

[anne]

http://www.nytimes.com/2005/09/08/opinion/08winchester.html

September 8, 2005

Before the Flood
By SIMON WINCHESTER

THE last time a great American city was destroyed by a violent caprice of nature, the response was shockingly different from what we have seen in New Orleans. In tone and tempo, residents, government institutions and the nation as a whole responded to the earthquake that brought San Francisco to its knees a century ago in a manner that was well-nigh impeccable, something from which the country was long able to derive a considerable measure of pride.

This was all the more remarkable for taking place at a time when civilized existence was a far more grueling business, an age bereft of cellphones and Black Hawks and conditioned air, with no Federal Emergency Management Agency to give us a false sense of security and no Weather Channel to tell us what to expect.

Nobody in the "cool gray city of love," as the poet George Sterling called it, had the faintest inkling that anything might go wrong on the early morning of April 18, 1906. Enrico Caruso and John Barrymore - who both happened to be in town - and 400,000 others slumbered on, with only a slight lightening of eggshell-blue in the skies over Oakland and the clank of the first cable cars suggesting the beginning of another ordinary day.

Then at 5:12 a.m. a giant granite hand rose from the California earth and tore through the city. Palaces of brick held up no better than gold-rush shanties of pine and redwood siding; hot chimneys, electric wires and gas pipes toppled, setting a series of fires that, with the water mains broken and the hydrants dry, proceeded over the next three dreadful days and nights to destroy what remained of the imperial city. In the end, at least 3,000 were dead and 225,000 homeless.

Everyone who survived remembered: there was at first a shocked silence; then the screams of the injured; and then, in a score of ways and at a speed that matched the ferocity of the wind-whipped fires, people picked themselves up, dusted themselves off, took stock and took charge.

A stentorian Army general named Frederick Funston realized he was on his own - his superior officer was at a daughter's wedding in Chicago - and sent orders to the Presidio military base. Within two hours scores of soldiers were marching in to the city, platoons wheeling around the fires, each man with bayonet fixed and 20 rounds of ball issued; they presented themselves to Mayor Eugene Schmitz by 7:45 a.m. - just 153 minutes after the shaking began.

The mayor, a former violinist who had previously been little more than a puppet of the city's political machine, ordered the troops to shoot any looters, demanded military dynamite and sappers to clear firebreaks, and requisitioned boats to the Oakland telegraph office to put the word out over the wires: "San Francisco is in ruins," the cables read. "Our city needs help."

America read those wires and dropped everything. The first relief train, from Los Angeles, steamed into the Berkeley marshalling yards by 11 o'clock that night. The Navy and the Revenue Cutter Service, like the Army not waiting for orders from back East, ran fire boats and rescue ferries. The powder companies worked overtime to make explosives to blast wreckage.

Washington learned of the calamity in the raw and unscripted form of Morse Code messages, with no need for the interpolations of anchormen or pollsters. Congress met in emergency session and quickly passed legislation to pay all imaginable bills. By 4:00 a.m. on April 19, William Taft, President Theodore Roosevelt's secretary of war, ordered rescue trains to begin pounding toward the Rockies; one of them, assembled in Virginia, was the longest hospital train ever assembled....

[nate]

the url below explains when i truly started to get The Onion confused with other publications...

http://tinyurl.com/7ndn4

[elliottg]

I don't think that you can easily estimate the potential impact. It seems to me that we have yet to comprehend the impact of this storm on the greater than 1 million middle class who successfully evacuated ahead of the storm; we have been so focussed on the 100-200,000 who stayed. These people's lives are destroyed. Even if their house is not damaged, the value of that house has dropped tremendously because of the negative network effects of the entire region being devastated. There are no jobs (or at least different jobs) there. For example, how does a lawyer quickly set up practice in another state? The ripple effects on gas prices and agriculture transport is not even being accounted for very well.

On top of this, what negative consequences are there associated with the drop in confidence (I think I saw that consumer confidence hit a low post-Katrina) on the economy. It think it's 50/50 that we get a recession.

[Randolph Fritz]

I think the thing we need most to be concerned with is the possibility that the economic impact of Katrina will burst the dollar bubble. The appallingly poor response of the USA to the disaster is going to be hard on the confidence of overseas investors, to say the least. Secondarily, I am most concerned with its impact on energy prices in the USA.

[Dave MB]

[conjecture that evacuee flights of presumed mostly Democrats
to swing states WA and OH were stopped for partisan political reasons]

I wouldn't put it past them, but by that reasoning they would have been
happy to have 2500 evacuees in MA, one of the bluest of states. But they
delayed/cancelled the deployment to Otis AFB, the stated reason being that
most evacuees did not want to go so far from home.

(Weather must also be at least a psychological factor for them. I still remember
a floormate from NO my freshman year at Amherst, who saw the first snow of
his life that November...)

[kharris]

Randolph,

Loss of regard abroad has implications for the dollar, but also for our place in the world. We have demonstrated repeatedly our ability and willingness to use violence as a tool in the world. We have demonstrated our willingness to ignore world opinion when world opinion doesn't suit our leaders. We have consumer far more energy per capita than any other major country, in an era when the risk from energy shortages are becoming clearer with every oil price increase. We went into Iraq, against the judgement of much of the world, but seem at a loss as to what to do beyond that. Having shot our way in, we now cannot very well shoot our way out. Now, the world gets to watch us fumble at protecting our own people.

What must the rest of the world think? What will the rest of the world do, the next time we begin strutting around waying our way is best?

[kharris]

...strutting around saying our way is best...

sheesh

[fubar]

How about deporting illegal aliens who are doing lots of the lower end jobs that the lower income groups from New Orleans could be doing?

[Randolph Fritz]

KHarris, no argument, but I sure wish we had a better economic analysis than the CBO's. Right now I have a bunch of intuitions and fears; a few weeks of work, perhaps less, could spell out the problems and the options we could use.

[azurite]

It's a bit difficult to see how you could build a city--an essentially static structure--that would co-exist successfully with as dynamic an environment as the interface between a huge river like Mississippi that carries a great deal of sediment (and fertilizer, pesticides, herbicides) and a saltwater body (the Gulf). Deltas keep building out as more sediment's deposited, the delta may change shape over time . . . Wetlands develop, are partially destroyed by storms, etc. An area like that doesn't have even the apparent stability (over time) of say, San Francisco. In "Life on the Mississippi" Mark Twain, a former Mississippi steamboat pilot, makes a number of comments (rather tongue in cheek) regarding the ability of what was then called the United States River Commission to 'tame' the Mississippi. There's also a few chapters on his visit to New Orleans, its landmarks, and its history. My edition doesn't list the original publication date--the 1880's perhaps? It seems that some things haven't changed much since the visit(s) the book is based upon.

Today's Wall St. J has an article on how farmers in Arkansas are suffering as they harvest a crop (wheat I think) several weeks before the midwest proper and usually theirs carries a premium price. But this year the farmers are rushing around looking for silos, as they can sell it for less now then they will in perhaps a month or two. Some of them are close to going under and will certainly cut back on purchases, etc., for this year, thus weakening the local economy(ies). The article stated that agriculture is one of the few sectors of the US economy in which exports exceed imports. But I don't know how much actual dollars are involved in terms of % of GDP.

An interesting note is that Hastert, who made the foot in mouth comments regarding why waste the money on NO? And perhaps it's time to stop paying out federal disaster money--was just on his way to DC to get More federal disaster/emergency money for Illinois--because of IL's drought. I guess it's different when it's your own state and your own agricultural sector. Or perhaps all the farmers,e tc., in IL are white.

[Bruce Ferguoson]

Tom Delay becomes a socialist.

"I know the American people, some of them are worrying about all this money," Mr. DeLay said. "Ladies and gentlemen, five million people, five million Americans, deserve us finding a way to make them whole."

[Randolph Fritz]

"It's a bit difficult to see how you could build a city--an essentially static structure--that would co-exist successfully with as dynamic an environment as the interface between a huge river like Mississippi that carries a great deal of sediment (and fertilizer, pesticides, herbicides) and a saltwater body (the Gulf)."

Sounds like a really interesting design question. Perhaps you could make the whole thing float? And we need to get rid of the runoff, but that will take decades.

[liberal]

kharris wrote, "Having shot our way in, we now cannot very well shoot our way out."

Reminds me of a headline in _The Onion_: "Bush Reveals Iraq Exit Plan: 'We'll Leave Through Iran'. "