Harvey's upside: Natural disasters create jobs

In the NY Times Tuesday:

...One of the paradoxes of disaster economics is that they can actually be good for economic growth, at least the way “growth” is commonly measured.

The need to rebuild or repair flooded buildings in Texas could create a surge in economic output in the state in the months ahead, generating higher growth in gross domestic product. This is a macabre artifact of economic accounting — no one would suggest that people are actually better off when billions of dollars’ worth of capital is destroyed. But it is how the math works.

If this disaster had happened in a period like 2009 or 2010, when the housing bust had left millions of people — especially construction workers — unemployed, the need to rebuild homes and businesses in Houston might have worked like stimulus spending.

But it’s not 2010 anymore. The unemployment rate among construction workers peaked at 27.1 percent in February 2010, but is now down to 4.9 percent. There aren’t a lot of qualified, idle construction workers. 

Perhaps the availability of well-paying jobs in rebuilding homes in Texas and in doing mold remediation work and other tasks that will be in high demand could even coax people into the labor force who have been on the sidelines. In that case, the effort that goes into rebuilding Houston may create a bit of a boost to G.D.P., even if much of it comes at the cost of economic activity elsewhere...

Rob's comment:

I'm surprised President Trump hasn't pointed this out yet: think of all the jobs that will be created to rebuild Houston! Out of the mud grows the lotus!

This is the upside of global warming: as storms due to climate change devastate the planet, people will be busy repairing the damage and burying the dead, hunkering down in bunkers between storms, if there are intervals between storms.

Cap-and-trade program: Political pork

Monte Wolverton

Dan Walters on cap-and-trade in this morning's Chronicle:

...That mandatory spending takes about 60 percent of the total revenues off the top, with the two largest chunks being the state’s financially shaky bullet-train project (25 percent) and “affordable housing” (20 percent), neither of which has much to do with reducing carbon emissions. And the mandatory spending list was expanded in the political horse trading that preceded the cap-and-trade extension to include elimination of a controversial property tax for wildfire suppression and expansion of a business tax credit.

A note about the bullet train: Although it gets a quarter of cap-and-trade revenues and boosters hope that’s enough to keep the controversial, financially strapped project alive, its construction would have, at most, a minuscule effect on reducing the state’s carbon footprint. Legislative Analyst Mac Taylor points out that, during construction, carbon emissions will actually increase, and by the High-Speed Rail Authority’s own projections, it would, even if fully constructed, reduce automotive travel by scarcely 1 percent.

The bullet train is emblematic of cap-and-trade spending — that it’s more about political pork than about reducing carbon emissions, as a perusal of the proposed spending underscores...

See also California cap-and-trade program generates more than $1 billion. Who gets the money?

Rob's comment:

Actually, the story under the above hed says the state raised a mere $935 million, not a billion. 25% of that pork---$233,750,000---will go to the construction of the dumb high-speed rail project.

The Legislative Analyst's skepticism in 2012 of this approach is still valid:

As mentioned above, in order to be a valid use of cap–and–trade revenues, programs will need to reduce GHG[greenhouse gas] emissions. While the HSRA[High-Speed Rail Authority] has not conducted an analysis to determine the impact that the high–speed rail system will have on GHG emissions in the state, an independent study found that, if the high-speed rail system met its ridership targets and renewable electricity commitments, construction and operation of the system would emit more GHG emissions than it would reduce for approximately the first 30 years (emphasis added).