We can’t dismiss the difference between the economic climate in Hamburg and New Orleans. The historic boom was on the side of Hamburg, but with New Orleans, it hasn’t been relevant since 1840 when six out of one thousand Americans lived in the city. New Orleans is no longer an important city on the river as rail, truck, pipeline, and container ships became the default mode of transportation.
Economists argue that cheap housing was the only thing keeping residents from moving. Katrina destroyed more than 200,000 homes, and with no massive effort to rebuild the city, there’s a slim chance that New Orleans will fully recover.
Most cities the recovered from disaster were already growing, and the disaster was a temporary setback. In the case of New Orleans, Katrina has caused more damage in a single day than all the harm done over 45 years of slow decay.
Jobless and homeless, how would homeowners pay their mortgage? What do residents do when their credit is destroyed as well (aside from credit repair services, I suppose).
Impact on Energy Production
Katrina delivered the biggest blow to the oil and gas industry because the Gulf of Mexico is the heart of the nation’s reserve. Before Katrina, the Gulf of Mexico produced 29 percent of all domestic oil production and 47 percent of the United States 17 million barrels per day refining capacity.
By the landfall of the storm, 95 percent of the Gulf’s production already stopped. Even after ten months when oil platforms went back to power there was a 30 percent less oil production before Katrina happened.
Generally, the US economy suffered a temporary setback because of the energy production halt but other than that it is resilient.
Temporary Economic Hindrance
High energy prices and the loss of thousands of jobs made an impact on the general economy in 2005. Gross domestic product, or GDP, the total number that describes all goods and services produced in the country, declined to 1.8 percent for the last quarter of 2005 compared with a growth rate of 4.2 from the previous quarter.
The following year, however, witnessed a rapid 5.6 percent growth when the government and private enterprise began the rebuilding process. As the oil and gas industry recovered life went back to normal, and gas prices dropped under $3.
Oil and gas markets are extremely volatile, the faintest hint of a storm would make prices soar of deflating. Katrina is primarily responsible. Every oil trader think a lot about hurricane season because these storms have a long-lasting effect on the industry by and large.
The US economy recovered, but local savings and individuals didn’t. In New Orleans, the levees still need more rebuilding, and the city remains vulnerable under constant rains. Many people can’t return to their homes, and many others were displaced.
Impact on Population
The flooding buried most of the city and its surrounding suburbs, the residents who refused to flee were evacuated during the hurricane. The city’s population changed drastically before, during, and after Katrina. The United States Census Bureau estimates that the people of New Orleans declined from 483,663 before Katrina (2000) to approximately 208,548 after Katrina (2006). In other words, the city of New Orleans lost half of its population. By 2016, the population returned to 391,495. Not all the people who left New Orleans were involuntarily displaced, nor all people moved to the city were returning residents.
Will New Orleans Recover?
A decade after Katrina, the City of New Orleans still recovering. Although government officials insist on rebuilding the city, environmental scientists are raising concerns about the feasibility given the city’s dangerous geographical position. You see, New Orleans is built on a swamp its very foundation makes it vulnerable. Whether the city will bounce back once more is fundamentally an economic matter.
Will the population of 400,000 resident and their employers continue to live in New Orleans? 190,000 jobs were lost, and employment declined by more than 30 percent from August 2005 to December 2005. Statewide, Louisiana lost 214,000 jobs or 12 percent of the state’s total.
History shows many examples of cities that were struck by the disaster but bounced back. During World War II, the allied forces raided Hamburg, destroying half of its housing in the summer of 1943. However, most of the residents returned by 1946, and the city’s population increased more than its prewar level. Like New Orleans, Hamburg enjoyed steady growth before the disaster.
Moreover, New Orleans had one thing that Hamburg didn’t have. The Federal Emergency Management Agency, a governmental agency responsible for coordinating the federal government’s response to natural and human-made disasters. Thus, the full recovery of New Orleans after Katrina is not overly optimistic.
On August 29, 2005, one of the most wrathful natural disaster to ever hit the United States raged north from the Gulf of Mexico through the states of Louisiana and Mississippi. In its wake of destruction, Hurricane Katrina with its wind, rain, and the coastal storm made a temporary negative impact on the US economy.
Hurricane Katrina nearly wiped an entire American city off the map. New Orleans, a city below the sea level, was almost drowned in its entirety due to the complete failure of the levee system designed to surround the city and protect it from the water.
The 2005 hurricane season broke all previous records as the most dangerous; Hurricane Katrina caused a $61 billion in insured losses. Something that 28 named hurricanes and tropical storms failed to do. Katrina was one of the largest and most destructive hurricanes in the history of the United States.
Insured losses from Katrina reached more than $40 billion. Surpassing Hurricane Andrew, the previous record holder that caused half the amount of damage that Katrina made. In 1992, Andrew hit South Florida that totaled more than $21 billion in insured losses in today’s dollars.