Hurricanes and More Can Really Hurt

During the 2017 Hurricane season, at least 15% of the United States mainland population was adversely affected by Hurricanes Harvey and Irma hitting Texas and Florida respectively. 100% of the population of Puerto Rico was stunned by Hurricane Maria. Still in the aftermath and seemingly undaunted by the destruction, many say, “We will rebuild…We will come back from this disaster even stronger.” The Federal Reserve reports that regional growth in Texas and Florida will be affected by the storms for several quarters. There is great hope for physically rebuilding previously debt-ridden Pureto Rico. If Puerto Rico could be transformed into the Ireland of the West through pro-business reformations and growth-oriented government policies, every dollar spent on recovery could be worth the long-term investment in this US Territory. But, this is probably not likely. In a 2014 groundbreaking study lead and reported by Solomon M. Hsiang and Amir S. Jina, fully recovering economically from recent and past catastrophic disasters is problematic. Hsiang and Jina report that it takes years to recover from hurricanes (and other major events) and likely not ever fully. The research is prescient for policy makers facing rebuilding issues after such disasters. Using extensive data, their own compelling conclusions and combined research from others, comparative impacts of natural and man-made economic disasters to per-capita GDP are presented. Read more.