Looking at the photos of the devastation visited upon the eastern states and provinces by hurricane Sandy, it's almost impossible to comprehend just how extensive it is and how long lasting will be its effects.
One thing is certain: it will have an adverse impact on growth, consumption and unemployment figures for the fourth quarter of 2012 and into the first quarter of 2013. Consider just four images of devastation.
First, there was a photo of a flooded parking lot filled with taxis. Those cabs will be a write-off. The corrosive nature of the saltwater means replacing the interiors will be futile and junking them is the cheapest alternative.
Now consider the drivers. Replacement cabs may take several weeks or months and, in the meantime, they have no income and probably no unemployment payments since they are self employed. If they owned their cab, replacing it will entail more money than the insurance will pay. And, of course their bills will continue to come in. So that means a leaner Christmas and reduced spending over a considerable time.
The second image was of the flooded underground shops in Lower Manhattan. The water will be pumped out, merchandise disposed of and the shops made new.
Some insurance policies, however, did not include interruption of business, and restoration will take weeks - this during the most important selling period of the year. Moreover, the people employed in those stores will not be working, so, like the cab drivers, they will be wondering if they can survive until their jobs return, if they return.
The third photo was the aftermath of a horrendous fire in Queens that destroyed more than 100 homes. The property loss was total, though thankfully no one died. But imagine how those who lived in the homes must feel.
The final image is of the gigantic piles of debris that are accumulating around the region. The logistics of the cleanup are awe-inspiring.
In the City of New York, 227 million kilograms of debris have been collected. The total will come to more than three million cubic metres and that is just for the city, with some 9.2 million cubic metres for the entire region.
Hoboken N.J., has been generating over 518,000 kg of debris and trash a day compared to the normal 54,400 kg. In the city of Long Beach on Long Island, the bill for cleanup alone will be over $100 million as compared to the normal city budget of $87million. And those costs and volumes are being replicated throughoutthe region. In New Jersey, New York City, suburban New York and Long Island some10,000 homes were lost or have been extensively damaged and cannot be inhabited until repaired. The devastation on Long Island and the public utility's inability to get power restored for more than three weeks didn't yield horrific images but caused untold suffering.
Rebuilding, restoring and repairing everything from subways to roads and bridges to houses and places of business will generate a great deal of economic activity, thereby partially offsetting the adverse effects of lost wealth and income. But that offset will be only be a fraction of the total amount of devastation.
Disasters such as Sandy try the hearts and souls of victims and test the metal of relief agencies. That is why a gift to the Red Cross might be particularly timely this holiday season.
David Bond is an author and retired bank economist. Email: