Katrina

[madgardener]

madgardener

[Vox Humana]

The comment wasn't directed at you, but the person who decided that we needed guns instead of butter. The "Guns and Butter" curve is based on the fact that there is limited productivity. You can produce guns OR butter. When one product goes up, the other goes down unless you can increase productivity. This illustrates the concept of "opportunity loss." In other words, when you decide to go to war, you experience an opportunity loss to produce (or afford) things like infrastructure and consumer goods.

[madgardener]

[BetsyB]

The stores are reflecting what they are being charged for delivery by truck, for all our food and household products. I am thinking we might be heading into a depression. I was born durning the last one. NJ is jacking gas prices by 50 cents in the next couple days. We are retired and don't really need to go anywhere we don't choose. We are fortunate in that way.

[BetsyB]

[Warren]

Which is why traditional war was initially good for the economy. It can result in unemployed workers finding employment creating supplies for the war. However over the last half century, our military has stockpiled most of what they need ahead of time, so new jobs don't materialize as they did in the past. (Our economy also isn't based as much on manufacturing, either.)

You also don't get the big production shift from consumer goods to war goods even if the war continues. For example, when WWII there had been lots of money made by working class people. For the first time in history, some families had dual incomes. The women were working not because they needed money. They were working because there was a labor shortage. But consumer goods were either not manufacturered, or repurposed for the war effort, so there wasn't anything to spend money on. That money was available to spend after the war, and kept the economy humming for a few years.

Also, today, war is funded by taxes. Taxes that drain money from disposable income. Taxes that aren't used as pooled money to buy things to fuel the economy (such as roads). (The "guns and butter" curve does apply to Federal spending.) All that extra income that couldn't be spent during WWII was put into savings: Specifically war bonds that funded the war instead of direct taxes. So instead of draining money from the economy like the current war, WWII took advantage of disposable income that couldn't be spent.

So the current war didn't give us the initial boost in productivity. It isn't providing additional disposable income to families. And it's draining money from the economy in the form of direct taxes, rather than using borrowed bond money.

So the "guns and butter" curve is actually only kicking in for the Federal government. Disaster relief will further drain money from the pot the Federal government has to spend, which will mean either less "butter" for us, or higher taxes to raise the productivity of the Federal government. But "guns and butter" doesn't apply to our economy directly as it did in the past. We didn't see an initial boost in employment. We're not seeing families gaining disposable income. And there won't be a big pool of money that had been loaned to the government available to spend when the war is over.

And now the huge amount of tax dollars that will be needed for disaster relief will mean further money drained from the economy. There won't be as much money for roads elsewhere. There won't be as much money for education. There won't be as much money available for anything that relies on Federal funding. And while there will be a lot of new jobs created to rebuild, those new jobs are counter-balanced by all the jobs lost in the region. And the money earned on those new jobs won't be going into the national economy. It'll be funneled back into the regional economy for the rebuilding effort.

Funding a war and rebuilding the Gulf Coast at the same time is going to cost us big time. Gas prices over $3 are just the beginning. At some point we may find ourselves with a hard choice: Discontinue funding for either the war or disaster relief, or allow the national economy to collapse. (Any bets on what the current administration doesn't want to stop funding regardless of the cost?) And that's when the "guns and butter" curve will kick in big time. It no longer will just be something affecting the spending of Federal tax dollars. It will affect our entire economy. Once that happens, "guns and butter" will be very real to all of us.

[Laura]

Please don't think that way - that gas prices will cause a depression.

We might be in for a rough time over the next few weeks, but preliminary indications are that the energy/gasoline problems coming from Katrina will be temporary. The issue is not really the oil supply, but distribution, and to a lesser extent, refinery capacity.

Regarding distribution, the broken pipelines in LA are being repaired as we speak. Although port and rail out of NO harbor will take longer to restore, they will be a priority. And the EPA has temporarily waived all of the special fuel blend requirements for different parts of the country, so that distributors can get gas from the places that have it to the places that need it.

Regarding refining capacity, all of LA only has 8% of the nation's refinery capacity - even if LA's refineries were out of commission for an extended period (which they won't be), we could manage to conserve 8% of our gasoline without too much hardship. Higher prices for gasoline hurt people's wallets, and I know that they will be a hardship for some. However, they also will encourage people to conserve - by planning ahead, limiting unneccessary trips, etc.

Unfortunately, panic about gas supplies has exactly the opposite effect: people go stock up on gas, including filling upevery container they can find and hoarding gas. This causes an artificial shortage, which causes more panic, which causes more people to hoard what they can find, and perpetuates a vicious cycle. If we could get people to calm down and just take some reasonable steps to conserve gas, we'd be fine. But given human nature, I fear at least some areas will end up rationing gas over the next few weeks. I really hope I'm wrong.

What's criminal is that the nation has not added any refinery capacity since the 1970s. Don't you think we use just a *little* more gas now than we did

30 years ago? If we had some headroom in our petroleum refining and distribution system, we wouldn't be in such a fix now.

My two cents' worth, Laura

[Vox Humana]

We have already started changing our habits. I don't leave home unless I know where and why I am going. But, even if you stay home this is going to get you. A cold winter has been predicted and all energy prices are going to rise due to disruption in supply or distribution along with a strong demand from developing countries like China. Everything has an energy component in the price, both for production and transportation. Insurance prices are likely to rise, also. I think that we were in bad spot already with a jobless recovery. Wages are slipping and poverty is growing. With most people only a couple of paychecks from disaster, I think you may be right about the depression. It's breathtaking to think that we have gone from a surplus to a financial disaster in about 5 years.

[Mark Anderson]

Not that this has anything to do with gardening nor do I disagree with your overall statement except that the current war is not currently draining money from the economy in the form of direct taxes. Not one person in the US has paid a single dime to support the current war. All the money is being borrowed which may or may not be paid by future generations. Ironically, one of the main purchasers of US debt is China so, in effect, China is funding the Iraq war, a war I don't think they're too happy about BTW.

As for Katrina relief, no worry. The feds still have plenty of borrowing power left. What's another $100 billion on top of over $7 trillion? Why not make that debt $10 trillion. Eat, drink, and be merry for tomorrow we shall die!

[Vox Humana]

Your point is well taken. I was thinking primarily about the federal government's ability to fund infrastructure. Ironically, this administration CUT money for the levee project in New Orleans. The Army Corp of Engineers said the money was cut because of the war, thus the "Guns or Butter" analogy. I think that all in-county issues aside (like insurgents and training of new terrorists), the war has made us less safe because we can't invest in infrastructure and disaster planning. We heard about dirty bombs and biological weapons for months last year during the campaign. However, when the shit hit the fan, apparently we haven't a clue about how to respond to a catastrophe. Today I almost spit when I heard the president tell Diane Sawyer that no one could have predicted the failure of the levees!

[Vox Humana]

Oh, stop being so rational! We all know that gas prices NEVER EVER fall to previous price levels once a supply interruption or shortage is over. We will see prices that were already too high at $2.65/gal go to $4.10/gal. When everything is back online, prices will drop to $3.37/gal. and the talking heads will rejoice and declare victory.

[Travis]

Your sons ex-wife will always be your daughter-in-law. He got a divorce you didn't but that does not mean you have to like her.

[Travis]

The disaster relief is a disaster and who will get the blame, the Bush led federal government. It will be disaster for the Republicans next election cycle. Yippee.

[presley]

[Vox Humana]

I fear your logical explanation will be invalidated by irrational voters. Remember, the people who are dead and in peril in Louisiana rushed to polls a few months ago to vote for an amendment to prohibit same-sex marriage, and while they were there they voted Republican. They voted for 4 more years of an administration that cut funding for flood control, including levee constriction, for New Orleans. For some reason, people fear gays so much that they will endanger themselves and knowingly vote against their own best interest. As long as Republican can appeal to the dark side of our population, they will prevail. Last year it was abortion, this year it is gays, next year it will be something else. Never underestimate the power of hate.

[Vox Humana]

How about this. We are refusing help:

"Jamaica was among the nations offering what help they could. But the Kingston embassy, while stating its appreciation for the support, politely declined the offers, saying in a statement: "The United States Government is not yet requesting international assistance at this time."

"On tonight's news, CTV (Canadian TV) said that support was offered from Canada. Planes are ready to load with food and medical supplies and a system called "DART" which can provide fresh water and medical supplies is standing by. Department of Homeland Security as well as other U.S. agencies were contacted by the Canadian government requesting permission to provide help. Despite this contact, Canada has not been allowed to fly supplies and personnel to the areas hit by Katrina. So, everything here is grounded. Prime Minister Paul Martin is reportedly trying to speak to President Bush tonight or tomorrow to ask him why the U.S. federal government will not allow aid from Canada into Louisiana and Mississippi. That said, the Canadian Red Cross is reportedly allowed into the area.Canadian agencies are saying that foreign aid is probably not being permitted into Louisiana and Mississippi because of "mass confusion" at the U.S. federal level in the wake of the storm."

[Snooze]

I think I take back what I said, it appears we do need the assistance of other nations. Given that the world knew about the magnitude of this hurricane atleast 4 days before the hurricane hit the new orleans area, they had plenty of time to mobilize a recovery effort.

USN Comfort set sail 4 days after it hit landfall because it took them 4 days to get the crew and supplies onboard. Various navy ships including an aircraft carrier have been sent to the region, again deployed after landfall. They're not projected to arrive until the 2nd or 3rd week of September. A bulk of the national guard from around the country is being deployed 3-4 days after it was obvious the national guard was needed to maintain order, and assist in the rebuild/rescue efforts. A better planned system would have had the rescue crews enroute and scheduled to arrive a day or two after it hit landfall.

What really makes wonder is that FEMA is part of the department of homeland security. If this is the best that the DHS can do, after 4 years of issuing all kinds of threat notices, color alerts and other lunacy, what will happen when some terrorist manages to launch another surprise attack?

I suppose the sacrifice of lives, property and land was worth it, because the world is safer from terrorists, cheaper oil and unmarried gay people.

-S

[Lynn]

[Mark Anderson]

FEMA and Homeland Security are a joke and this situation proves it. What's the point of dispatching buses for 25,000 people? Are they insane? If the buses can get in and out of the Superdome than I would have thought that people could walk the same path and get out too. Wouldn't it had been simpler to force everyone who could walk to walk and reserve the buses for those that can't? All they had to do is set up a spot along the interstate and turn it into a temporary tent city with generators, food, water, and lots and lots of portapotties that could be easily supplied. Point people to the Superdome and out to the tent city and make them walk. It is ludicrous that they had these people wait there for buses. One must wonder where all the billions that Homeland Security spends if they didn't even have a contingency plan for something everyone knew one day was going to happen. NOLA had a scare last year and everyone talked about the entire city flooding. And when it floods every single official had their head stuck firmly up their ass looking into the cameras like a deer caught in the headlights. They did virtually nothing for 3 days while these people sat at the Superdome without food, water, or toilets. What kind of idiots are running things down there?! Coming up with some sensible plan to get these people out isn't rocket science.

[Vox Humana]

It's hard to compare gasoline price from one county to the next. People here in the USA often proudly point to our low gas prices. They say "If you don't like paying $2.65/gal go to Europe where they pay $6/gal. The problem with this is that the people in Europe or the UK who pay big gas prices also have national health care that is paid for by the high gas tax. Oil is a commodity that is sold for the same price, more or less, to all takers. We don't have cheap gas in the US because we are "blessed" or because we are crafty deal makers. We have cheap gas because there are lower taxes and fewer services. Other people have expensive gas AND health care. I'm not sure we have the better deal. Two dollar a gallon gas won't do much for you if you have no health care and you experience a major health crisis or you have a chronic disease.