My Take: Hurricane Katrina

Now that Hurricane Katrina happened roughly a week ago and every news source has put their two cents into the fray, I figure I might as well throw in my two cents, also.

While reading through my various news materials and intelligence analyses I recall that Katrina was likened to a nuclear bomb going off in the vicinity. The more I think about it, the more that I think it is true (sans the radiation).

Regarding the building/re-building New Orleans debate...a city that sits below sea level...both sides bring up good points: On one side, it's just plain dumb. On the other side, an economic infrastructure has grown there for more than 2 centuries. Anne Rice, the famed author of the Vampire Chronicles (think Interview With the Vampire), even penned a piece regarding the rich cultural and artistic background of the area.

However, being the budding economist that I am, let's strip the emotional out and get down to the nitty gritty:

The Port of New Orleans is the 5th largest in the world and the largest in the United States in terms of tons handled, at 52 million tons outgoing and 17 million tons incoming annually. Most of this is the export of U.S. agricultural products due to the Port's proximity to the farmland of the U.S. southeast. Imports range from fossil fuels to building materials.

Can you see the pattern yet? Yes: Agricultural commodities leave us, while industrial materials come to us...all through this one location. Let's say that this flow of goods stops: The price of goods will shift due to the increased scarcity of products either in their raw form or as part of a manufactured good. We're looking at a re-shape of the entire global economy. Remember? up to twenty percent of all the world's goods flow through this one port.

Now, let's take into account shipping alternatives. You can use semi trucks, but the price of fuel is high right now and this would further a fuel problem that are are having right now. Air is too expensive and rail is generally too slow. What about using this natural waterway?

If you're thinking that this is the way that it is...you would be right. This waterway--so many rivers flowing into the Mississippi River and onward to the Gulf of Mexico--is what historically built this part of the country up. In retrospect: Had the U.S. lost New Orleans to the British in 1815 then the Louisiana Purchase would have became obsolete and the south would have little to any economic capacity at all (even think to what the Civil War would have been like, had we even had one at all given this scenario). There was even talk amongst scholars during the Cold War about which city the Soviets could nuke and be the most efficient about it. New York, Washington D.C., Detroit: All of these were viable alternatives, however at the end of the day...imagine the fallout of the destruction of New Orleans.

...or do we have to imagine anymore?