Hurricane Gustav

Three days after the third anniversary (does everything happen in threes?) of Katrina, the Category 5 hurricane that left as many as 1,900 dead and an estimated $80 billion dollars worth of damage, the US is preparing for Gustav, the Category 3 hurricane that has killed 94 people while bearing down on the Caribbean. Gustav is currently making a beeline for the Gulf Coast, with all eyes set on New Orleans and is set to touch down this morning. Despite wavering between a Category 3 & Category 4 hurricane, meteorologists say that it will remain at Category 3 when it finally touches down, a fact that I can’t help but find myself at odds with, seeing as how most hurricanes pick up strength while passing through the Gulf of Mexico, due to the strong currents & warm waters, but what do I know?

The city itself has braced for this hurricane by taking every precaution possible. In the words of New Orleans Mayor Ray Nagin, “We cannot afford to screw up again.” This has been one of the largest mandatory evacuations ever and over 1.9 million have fled the Gulf Coast region, while mandatory curfews have been set in place for the remaining 100,000. Authorities are promising to arrest anyone caught shoplifting. I couldn’t help but think to myself, is that necessary? We all have vivid images of the devastation done by Katrina, so with most of the Gulf Coast evacuated, how much of an issue do you really think shoplifting will be, and how much of a priority are you going to make out of this? I hope you will turn your attention to saving people’s lives. That seems to me to be more important.

This will be the city’s first real test for the levees. The economic effects of Gustav will quite obviously rest upon the strength of these levees. What’s at stake includes: refineries and offshore petroleum production rigs, which will trigger an increase in gas prices, and the sugar fields (yes prices are likely to rise as a result of this hurricane season). For sugar fields, Gustav comes in addition to rising prices in fuel & fertilizer, as well as lower prices for importing sugar and a rainy season that delayed crops. Did you know that 20-25% of all domestic chemicals in the US are made in Louisiana? I shudder to think of the kind of damage Gustav will do to the environment when it hits these chemical plants. The ports appear to have learned their lessons from Katrina and are well equipped to handle Gustav, but the casinos might not be as lucky. Before Katrina, state law required the gambling portion of the resorts to be located on barges in the water. Twelve casinos were completely wiped out, and as soon as state legislators were able to reconvene, they called a special session, in which they decided to let the casinos build onshore. They did, pouring $1.7 billion into rebuilding efforts, often outpacing the surrounding communities, which is sad.

Those effects are only short term, the long term effects include a further dip in tourism, which was once New Orleans’ main source of income, bringing in $9.6 billion annually before Katrina hit. Tourism is making a slow come back, mainly due to the fact the French Quarter and convention center were spared from most of the serious flooding caused by Katrina, but any doubt in visitor’s minds that New Orleans is still unsafe, might send sales from tourism in another downward spiral. The labor field is also likely to take a large hit. If these levees don’t hold up, most are likely to pack up and leave for good this time.

It will be interesting to see the government’s response from a financial viewpoint. They are not as likely to be handing out money so easily this time around, seeing as how we are deeper & further entrenched in a recession that doesn’t appear to be receding anytime soon. Another interesting response to Gustav is coming from the government via the upcoming GOP convention in the Twin Cities, which is not far from where a certain someone goes to college, wink, wink.

Sources:
Gustav’s possible economic hit is widespread
http://news.yahoo.com/s/ap/20080831/ap_on_bi_ge/gustav_economy
by Alan Sayre, an AP Business Writer
& contributed to by Dave Carpenter an AP Business Writer from Chicago

The Gulf Coast waits: Will it be another Katrina?
http://news.yahoo.com/s/ap/gustav_gulf_coast
by Stacey Plaisance and Becky Bohrer, both Associated Press Writers

http://en.wikipedia.org/wiki/Hurricane_Katrina