Hurricane Recovery Boosts Florida’s Economy
The four hurricanes that hit Florida earlier this year did quite a lot of damage, running easily into the billions of dollars. Now that the insurance checks are arriving, there is a risk that workers will be unavailable at any price. While Governor Jeb Bush was right when he said, “I do not believe ... that having four hurricanes is good economically for the state,” the ensuing economic activity makes Florida’s recovery a textbook example of growth.
First and foremost, once the winds died down and the rains quit, there was a part of the country that wasn’t harmed, that had power, that had resources, and these could be shifted to Florida. One of the problems many poor nations have, by definition, is insufficient capital upon which to rebuild after a disaster of this kind. Care, the International Red Cross and others can do some of the immediate work, but the reconstruction of Florida demands a flow of capital that many nations simply can’t effect.
Possessing plywood and generators, though, wasn’t enough. Owners of capital like to collect rents or close sales. That means that money is needed to make the capital move. Without federal disaster relief funds and without insurance money, it is hard to see how the people of Florida could have bought the goods they needed to rebuild. Even allowing for the private wealth in the banks, Florida would have been hard put to come up with the cash. Many poor countries wouldn’t even have had any private wealth upon which to draw.
And then, Florida’s work force has the American work ethic, has a reasonable degree of education and a pretty good skill set. Given enough cement, 2X4s and nails, they can put up a house, strip mall or church in a matter of days. Hooking up the plumbing to the sewers may take a little longer, but the fact is that a well-run workforce gets results. A great many poor countries lack the education and know how to produce in short order.
There is a boomlet in Florida right now, and it may make up for the out of pocket costs. However, it also had materials available, cash to acquire them and a population that knew what to do with them when they arrived. In short, Florida is booming because it was a rich place that had four terrible storms. A poor place would have been much worse off both before and after.
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