economics – American Disasters

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What really struck me about the readings for today is the deep economic implications that disasters and potential disasters have. I really liked Betsy’s analysis of Steinberg’s claim that the business elites of San Francisco cried “fire” and not “earthquake” to ensure that capital continued to flow into the city. The assertion that this was a freak accident was not just lying to ensure the flow of capital, but Californians really did refuse to accept the dangerous environment that they were living in. Since so much has been written about Steinberg, and because I find that Davis provides some unique and compelling economic arguments, I am choosing to focus on Los Angeles and its disaster culture.

I first found it really interesting that disasters in Los Angeles can essentially be used to prove Keynesian economics correct. Davis quotes a veteran reporter who claimed, “For the Clinton Administration, the Los Angeles earthquake has provided a politically salable reason for doing what it has sought to do for most of its first year in power: pump billions of dollars into Southern California’s ailing economy.” (Davis 48) After relief was provided, especially to economically important sectors, (transportation, technology and the wealthy) the economy of SoCal began to heat up again and return to its status as the most economically productive region of the country. For me this both strongly affirmed the legitimacy of Keynesian economics and highlighted the usefulness of disasters in testing economic theory because essentially post-disaster the entire economy needs to be rebuilt.

I also think it is worth noting that in terms of disaster relief, not much has changed since the Gilded Age, the policy is help the wealthy first, and maybe help the poor if there is still enough time and money left. The image of the houses of the rich in Malibu being rebuilt very quickly and with federal money, while poor elderly minorities were homeless really stuck out to me. This image also reminded me of what we learned about the San Francisco earthquake where the wealthy whites used the earthquake as an excuse to shoot the poor chinese and even had government permission. This government sanctioned inequality provides for an complex ethical debate. Who should we help first? While the poor need it most, the wealthy are most important to getting the economy back on track. It is a complicated issue with no clear answer.

In Eli’s post “The perverse and often baffling economics of disasters,” he examines Kevin Rozario’s “What Comes Down Must Go Up: Why Disasters Have Been Good for American Capitalism.” Rozario believes disasters may have positive economic effects particularly on capitalism. It does seem odd, as Eli notes, that a disaster where homes are damaged, property destroyed, resources ruined, industries interrupted, and lives lost may be counted as an economic good. It appears that any economic good may happen in the long run rather than immediately after the disaster. This argument reminds me of an article we read last week, Richard Schneirov’s “Thoughts on Periodizing the Gilded Age: Capital Accumulation, Society, and Politics, 1873-1898.” Schneirov credits much of the United States economy and capitalism to Civil War and Reconstruction. Schneirov does not state capitalism took off immediately at the end of the Civil War. Rather, the Civil War started economic trends that continued through the Gilded Age and Progressive Era.

Eli’s comparison of disaster and capitalism is an interesting one. Disasters, he writes must destroy things, and capitalism must also clear previous technologies to move forward. As Rozario puts it, capitalism “must constantly destroy to create.” I think the point holds to an extent, but capitalism and progress does not always need to destroy the past. Casting capitalism as a destructive force seems negative, and also belittles the effects of disaster. New technology often—if not always—builds on previous knowledge. Eventually, the advancement may come to replace earlier models, but it is not the same destruction inherent in a disaster.

Another point I find unusual in Rozario’s article is that many Americans have “a longstanding conviction that calamities are blessings.” Disasters are useful for exposing flaws in society and motivating people to address the issues. They can clear space for innovation. I do not entirely agree, however, that Americans commonly perceive disasters as blessings. It seems that people might have a tendency to be hopeful or optimistic; they must look for the best or the disaster could be overwhelming. The art on Hiroshima from the State of Emergency that I examined suggested this optimism. The pieces, while about something as terrible as thousands of deaths, held a sort of peaceful promise in their serene colors. Disasters are much more than economics; they involve people’s lives, hopes, and dreams.

Tag: economics

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