Will Katrina begin the next great depression ?

[alkaline9]

You have to wonder with all the people now left homeless in New Orleans... And all the pollution in the water from these floods... And all the federal funding that will be required in the coming months to support Louisiana, Mississippi, Alabama...

Will this hurricane be the spark that ignites the flame? Is the next great depression on its way, at least partly because of this tragedy? Estimates in the billions for damage, but we all know that its going to cost the US a lot more than that: oil prices, millions more unemployed, hazardous fish, water (rain water too?), skyrocketing insurance rates for nearly all insurance to cover the fallout.... I'm sure many more ways too.

I know we have been focused on BushCo's policies as being the potential spark to start the next great depression (the foremost being the war in Iraq), but maybe this hurricane will actually be the straw that broke the economies back?

I wonder if this will change his views on the potential effects of global warming? Could you imagine a storm like this hitting a different US city each year for the next 50 years? How would we function, short of moving away from the coasts?

Your thoughts?

[etherealtruth]

1. George W Bush did

[alkaline9]

4. I don't disagree but...

...So far the economy has only been on the down slide. This hurricane however will push things much further into the downward spiral I think.

[etherealtruth]

14. I understand that Katrina IS a precipitous event ...

The Chimp has drained the governments coffers with his hare-brained war, his ill advised tax cuts ...

Katrina probably will be the straw that breaks the camel's already frail back ... but, when all is said and done, Chimpy has done more harm to the middle and working "class" than anyone. I hold him and the evil cabal responsible ... everything else is peripheral.

[shadowknows69]

2. my household

is already rapidly heading in that direction. $3.24 a gallon at a gas station in my hometown today.

[alkaline9]

7. ouch!!

gas prices by me (central NJ) jumped from 2.45 to 2.72 in 2 days and I thought that was bad...

[shadowknows69]

10. check them later today

and go fill up now. possibility of a 20+ cent raise before end of day.

[HadItUpToHere]

3. It may help AVOID the next depression-

they're already discussing the prospect of public works projects to put people back to work- it will also make it much harder for the pugs to make *'s tax thefts permanent.

[alkaline9]

12. I never thought about it that way...

... You're more optimistic than I am!

[babylonsister]

5. Katrina might spark it, but this admin

laid the groundwork.

[alkaline9]

8. agreed ... nt

[Mizmoon]

6. don't forget that there's no bankruptcy relief for anyone

anymore either.

[alkaline9]

9. how convenient...

... if I didn't know better I'd think they planned this all along!

[FloridaPat]

15. This rumor persists. If you have no income there is basically NO change

in the bankruptcy law.

[Hugin]

19. Oh? So it's aimed directly at those people in the middle class...

I guess I should quit my job.

[FloridaPat]

26. The main point of the law was that if you're income was at a certain

National Level (forget local), then you couldn't do chapter 7, you had to do chapter 13. Currently, you have a choice depending on what assets you want to give up.

So yes, the middle class gets the screwing. The good news is the middle class is fast disappearing, so it will be a mute point by the next presidental election.

[alkaline9]

28. how is the middle class disappearing good news???

[FloridaPat]

39. Less middle class = less screwing. Easier to go bankrupt with chapt 7

Just being sarcastic about it being good. Nothing * has done sinc he's been in office has been good.

[Hugin]

16. More than a few Dems responsible for that...

Let the chips fall where they may.

The only thing better than finding blame is finding a
way to repair. I don't trust the Repugs to do the repairing.

[Swamp Rat]

11. yes

at least for me

[oasis]

13. No FDR "New deal" . Ownership Society means "You're on your own".

Ayn Rand would be proud of the Chimp.

[alkaline9]

23. They may be on their own, but...

...they have to go somewhere. The people who no longer have homes will have to migrate somewhere to begin their lives again. Given the fact that they probably won't have jobs, and may very well be forced to live below their regular means, this will only increase the economy problems I think.

[CrispyQ]

30. And 'family values' mean

MY family is valuable, YOURS is not.

Last night on my local news they estimated the cleanup at $25 billion. That's 5 weeks of money for the Iraq war. The coffers are dry, the deficit is beyond comprehension, poverty rates are going up & the middle class is disappearing. All the while the moran-in-chief plays a guitar. Where is the outrage? How many of the sheeple will fall into line when the dimson visits the area on Friday?

We are headed toward a feudalistic state if we let this continue.

[spinbaby]

17. I wouldn't be surprised

Gas prices through the roof, a major shipping port disrupted, about a million homeless, unemployed people added to the economy--it could easily push an already struggling economy over the edge.

It will all be Clinton's fault, of course:sarcasm:

[superconnected]

18. nope. Bush.

[Zynx]

20. Another Depression, in the sense you think of, is nearly impossible.

What made previous depressions so severe was runs on the banks that wiped out enormous amounts of people's savings. Due to modern controls and protections, such an event is nearly impossible. A severe recession is possible and actually quite likely once housing, the great bubble in the economy at the moment, finally gives way.

[jobycom]

21. It coulds spark a recovery instead

Efforts to rebuild New Orleans and Mississippi will require a lot of money, and a lot of economic activity. This will create many jobs, and may have the exact effect that FDR's works pograms had. It won't be as efficient as FDR, because of privatization. FDR paid the workers directly, Bush will pay major corporations, who will pay the workers less, but even so, huge amounts of resources will be required, and that will boost production.

Also, a lot of services now will have to be stepped up to make up for the loss. Especially oil. Refinery and drilling will have to increase somewhere to make up the shortfall. Office services that were based in New Orleans for national corporations will be re-opened somewhere. This may draw a lot of people out of New Orleans. A lot will likely move and never return, given how long the city will be down. But moving these jobs may even drive up wages, as the cities which receive these offices and manufacturing jobs have to fill these positions.

Wherever the survivors go, whether to another city or back to New Orleans, they will need new housing, furniture, cars, etc. Financed by a combination of insurance money and tax dollars (both might wind up being wealth redistribution plans, in essence), they will pump a lot more money into the economy.

The two economic downsides will be inflation, as people compete for limited resources, and higher insurance prices, as insurance companies try to recoup their losses. Who knows, this may finally help to inspire insurance reform.

Just my thoughts. Could be completely wrong.

[spinbaby]

24. Massive rebuilding requires massive money

Where's it going to come from?

[jobycom]

32. Exactly. And that money will go into the economy

Where will it come from? Everywhere. The capitalist economy is a truly beautiful thing when it works. Money will come from insurance companies who have been hoarding it. It will come from tax dollars, running up the debt but also requiring reallocation of current spending (not just federal, but state and local). It may require a tax increase that will target the people who actually have money, and begin to reverse Bush's tax cuts. Remember, Bush Daddy and Reagan were both forced to sign massive tax increases to undo Reagan's tax cuts, and those tax increases inspired the economy more than Reagan's tax cuts.

Money will come from corporations who will tap into their funds to rebuild offices wiped out by the hurricane. Smaller businesses and entrepeneurs will invest time and labor and their savings into helping the rebuild, and this will create new businesses, and slowly, new jobs.

Look around. We don't have a money or wealth shortage in America. We have a distribution problem. Bush's tax cuts made it easier for rich people to hang onto their money. That's why wages and employment fell. This disaster, and believe me it's worse than it looks even, may allow capitalism, the good part of it, to finally distribute some of that wealth. As long as there is money to be made, corporations don't mind spending.

ANd finally, as New Orleans and Mississippi are cleared and rebuilt, better plans will be made. These are cities basically wiped clean. Imagine cities actually planned withnew energy technologies, new energy saving systems, better planned sewage and transportation systems.

I know this place. I know these people. I am one of these people, even though I've moved. This place will rebuild. And these aren't people who will settle for simple recovery. Once the horror of the thousands dead and the property lost begin to fade, these people will try their best to make this region better than it's ever been.

These two regions have been built the way they have largely as a response to disasters in the past. Mississippi's seawall and beaches were massive spending projects to rebuild from hurricanes. New Orleans' levees and dikes and pumps were responses to the many floods in their histories. This is nothing new for these regions. Tragic and more painful than you can imagine unless you've lived there. But still nothing new, in the long history of the regions. They will rebuild, and it will be impressive to see. Very impressive. People and money will flock to this region just to be involved.

One more point on the money. Reports have been everywhere that Mississippi is losing $500K a day in tax revenues from the casinos alone. Just taxes. Imagine how many millions a day in spending that is. And most of this is tourism money. That money is still out there. There is plenty of money. It just has to start getting spent.

[alkaline9]

37. I disagree on a few points

#1 I don't think they will rebuild ... who will insure them? The insurance companies won't risk insuring buildings without charging rates that are simply too expensive for most people to live there. If any rebuilding does occur, it'll be for those with LOTS of money to burn (casinos, huge shore homes, etc).

#2 The capitalists will not be willing to give up their money to help out the less fortunate, they will just horde their profits even more. The rich will continue to get richer (Walmart, Exxon, etc) and screw the poor people. Bush has turned this country into a great divide. The wealthy (like kings) have all the money/power and refuse to let the poor break out of their class. More people join "the poor" everyday in this country as we become more and more divided.

#3 If these cities are rebuilt, how long do you think it will take? Two buildings in NYC haven't begun being rebuilt after 4 years, and these are ENTIRE cities! People will have no choice but to move away ... to leave their homeland and heritage. Who moves back in once any construction is complete will be the ultra rich. Ever see any new houses being built with 2 or 3 bedrooms and one bathroom? Me either! They only build monster new homes anymore. The people who have been devastated by this hurricane will not be able to go back and live there EVER!

#4 The bigger picture is that, regardless of efforts to keep damaging storms away, they will continue to batter these lands and destroy. Global warming is paramount. It will eventually (sooner than later I believe) destroy the coasts. The pResident, as well as most major corporations, have no plans to actually DO anything about fixing the environment. Just as they have no care to feed the hungry, help the poor, etc etc.

Call me cynical, but this is just how I feel.

[alkaline9]

27. IMHO if this cabal continues the trickle down economics...

...we're DOOMED!!!

[jobycom]

33. trickle down will slow the recovery, that's very true

It would be a faster process under a Democrat. But capitalism will take over. The good part of capitalism, the one that actually helps the poor. Capitalism poors a lot of money into the pockets of the lower economic classes when there is growth. When there is stagnation, that money winds up locked in the safes of the rich. That's the bad side of capitalism, and the one Democrats try to fix. We need more Democrats.

[alkaline9]

34. if it was up to shrub, the poor would just die of hunger... nt

[jobycom]

35. Bush doesn't want to kill the poor

Just enslave them, to make them cheaper to hire.

[julialnyc]

22. maybe this will force the pendulum to swing

Helping the unemployed, searching for alternative fuel, seeing that our national guard is needed in our nation.

I wish this never happened, but maybe some good can come of it (I have to think like that our it is too damn miserable).

[Neshanic]

25. The economic greased slide just got new grease.

The real estate bubble. The Stock Market being held up by Herculean effort behind the scenes. The general anxiety over the war, and it's never ending horror. All these were in place to push the economy in the dumpster this October. Chimpy has failed in his effort to transfer wealth via the Social Security system to help Wall Street with am infusion of play money. He was playing the clock, and what he wanted should of happened early in the year, but everyone saw the Ponzie scheme it was.

Time is out. Now Katrina. All bets are off, and we are in the slide now.

[alkaline9]

29. BushCo greased up the slides...

...and the poor victims of this hurricane will have nothing to do but continue sliding down.

[leesa]

31. No. The GOP has kicked off the next Great Depression.

Just like they did last time.

Don't fall for the next bit of propaganda that the GOP is undoubtedly going to shill. Had our economy been healthy and our disaster preparedness not shredded by the GOP, we might have been OK.

DON'T play their game.

[liam_laddie]

36. Agreed!

The Port of Southern Louisiana, which is a fifty-mile stretch
of the Mississippi, may well be out of service for weeks or more,
Since this is the fifth-largest (in terms of tonnage, I think) port in the world, and handles much of our agricultural exports, the effect from Katrina may be disastrous, indeed enabling the depression a head start. Unintended consequence of concentrating such infrastructure. Betcha China doesn't make such short-sighted planning errors.

[catmandu57]

38. It is going to take a massive infusion of cash

to rebuild there. The same thing happened with the flood of 1993 here, Clinton's jobs program was dead in the water, then came the flood and the destruction.
The jobs program was reborn privately, the same will be true for the region there, the people will rebuild, there is nothing else for them to do.
It's not going to happen overnight, and it will require massive ammounts of government money to prime the pump, but once it gets going it will spark the economy there.

There is a wild card joker in the deck however, Global warming which I believe is responsible for the increasing magnitudes and number of these storms may play hell with our best intentions.

Hurricane season is a long long way from over, there are still three to five major storms expected this year, other parts of the country will be feeling this pain as well, and it could throw a huge wrench into everything.

[Eloriel]

40. A report on Lou Dobbs last nite - Katrina may force NW and Delta

into bankruptcy.

I think it's going to be a huge blow to the economy. I think under normal circumstances, it wouldn't have been. But with the spendthrift in the White House, the deficit, the cost of the war, etc., we can't handle this. My sense is that another huge disaster of this type (think: The Big One in California) would sink us.