[extropy-chat] re: news in perspective

[Samantha Atkins]

On Sep 1, 2005, at 1:53 PM, Eugen Leitl wrote:

> On Thu, Sep 01, 2005 at 01:03:11PM -0700, Samantha Atkins wrote:
>
>
>> This is surely not the point.  There are many severe weaknesses in
>> the US economic situation.  I would give an 80% probability of an
>>
>
> I don't know what's going to happen, but if anything Big Bad happens
> it won't be because of a mere hurricane wreck. It would be but a  
> trigger.

Charlie Stross has some interesting thoughts about how bad this could  
be on one of his blogs.  It is potentially a bit more than a trigger.

http://www.antipope.org/charlie/blog-static/2005/08/31/#katrina-1

Wed, 31 Aug 2005

Katrina aftermath

I've avoided posting about the inundation of New Orleans, or  
Hurricane Katrina, until now -- I'm on the wrong side of the Atlantic  
and it wasn't obviously any business of mine (other than the odd  
anxious "are you alright?" email to friends and acquaintances who  
live a whole lot closer).

However: the devastation is now clearly so extensive that I expect it  
to have very personal consequences indeed.

Leaving aside any political partisan finger-pointing, it's worth  
noting that it's not just New Orleans that's underwater. As Stratfor  
pointed out in a recent bulletin, New Orleans is just one of the  
residential hubs of the Port of Southern Louisiana, the huge terminal  
complex that covers the bottom-most fifty miles of the Mississippi.  
"The Port of Southern Louisiana is the fifth-largest port in the  
world in terms of tonnage, and the largest port in the United States.  
The only global ports larger are Singapore, Rotterdam, Shanghai and  
Hong Kong. ... The Port of Southern Louisiana stretches up and down  
the Mississippi River for about 50 miles, running north and south of  
New Orleans from St. James to St. Charles Parish. It is the key port  
for the export of grains to the rest of the world -- corn, soybeans,  
wheat and animal feed. Midwestern farmers and global consumers depend  
on those exports. The United States imports crude oil,  
petrochemicals, steel, fertilizers and ores through the port. Fifteen  
percent of all U.S. exports by value go through the port. Nearly half  
of the exports go to Europe."

The actual estimates for insured structural damage caused by  
Hurricane Katrina are currently around US $25-30Bn. The current loss  
of life estimates are in the hundreds (although I'd be unsurprised if  
the eventual death toll does not eventually top 9/11 by quite a  
margin). But the economic damage from closing the Port of Southern  
Louisiana for up to three months is huge -- plausibly equal to 5% of  
the US balance of trade with the rest of the world. I can't put a  
figure on that total, but I'd be surprised if it isn't an order of  
magnitude more than the $25-30Bn insurance costs, and possibly even  
higher than the cost to date of the Iraq war and occupation ($200Bn).  
A couple of hundred billion here, a couple of hundred billion there  
-- pretty soon we're talking real money.

What are the likely consequences (locally and globally) of blowing a  
5% of GDP sized hole under the waterline of the US economy?

(PS: for anyone who suspects this question is prompted by nascent  
anti-Americanism, rest assured: the real reason is that I earn about  
70% of my income in dollars. If the US economy sneezes, I catch a  
cold ...)



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