Was Sandy handy?

WHAT’S THE BIG IDEA
By Ryan DeLaureal

The dollar amount of the economic impact of Hurricane Sandy is increasing daily, as some areas are still without power and people are picking up the pieces of their demolished homes.

Families were displaced and left homeless, and 110 lives were lost to the storm.

Current estimates of the total monetary damage run the gamut from $20 million up to $100 million, with Moody’s Analytics Chief Economist Mark Zandi estimating it to be in the end zone of $50 billion.

Sandy’s turning out to be the second-most-costly hurricane in American history, taking a backseat only to Hurricane Katrina, whose $110 billion in damages are still in the process of being repaired.

For the first time since the attack on the twin towers, the New York Stock Exchange closed its doors, as did thousands of other businesses on the East Coast as hurricane winds and floods caused power outages, leaving our brethren from the original 13 colonies with soggy Sperry Top-Siders and economic devastation.

There is, however, a silver lining to the massive physical damages resulting from
Sandy’s wrath.

The housing market has been stagnant at best, with a glut of homes left to dilapidate on the market while waiting for buyers. Sandy was sort of like a magic restart button. Now, carpenters and construction workers are being called to action to help repair and rebuild after insurance companies fork over the estimated $10 billion in claims they’re expected to pay out.

The building materials have to come from somewhere, and we should expect to see a bit of recovery in the auto industry as hurricane victims start to replace their submerged vehicles.

All things considered, Wells Fargo Senior Economist Mark Vitner predicts that, despite an economic loss of one-fifth of a percentage point this quarter, the construction boom that’s about to hit the Northeast can be expected to boost the economy by the same percentage in the next two quarters.

But recuperation’s long boulevard isn’t adorned with yellow bricks for everyone.

Federal disaster assistance usually only comes by way of loans, which of course must be paid back with accrued interest. Only about
2 percent of Americans have a flood insurance policy, which must be purchased as a supplement to homeowner’s insurance, as most plans don’t cover flood damages.

The past two decades have been challenging for those living in coastal regions along the Pacific and Atlantic oceans, and with people still struggling to recover from Katrina, there’s more pressure than ever on the Federal Emergency Management Agency, which is expected to provide cash assistance the victims to help them rebuild their lives.

There’s never a good time for natural disasters, but the rebuilding process is one that will heal the East Coast. Economically, the storm may prove to be a much-needed catalyst for the construction companies to get people employed again.

As much as $10 billion per day is forfeited in lost productivity. Capping this off by making the cleanup as fast and efficient as possible is the key to economic recovery. However, it could take several months before insurance companies start to pay out claims, and even longer until the harsh New England weather is suitable for construction work.

What can we as Oregonians take from this? Buy lots of flood insurance and start building housing developments toward the coast. Our coast is far less densely populated than the East Coast, but earthquakes, floods and tsunamis are very real occurrences that we should be mindful of and prepare for on all levels.

If you want to help the victims of Hurricane Sandy, please visit the Red Cross website. You can also help them out by paying taxes, because our government will be spending a considerable chunk of change on this catastrophe.