Reading economist Arnold Kling’s explanation of why it will take a very long time to return to normal from Hurricane Sandy, I kept thinking of my own NJ disaster devastated neighborhood with downed trees on roads covered with branches, leaves and wires.
Kling: “You cannot solve problem A without first solving problem B, which requires solving problem C and so on.”
Me:
- Problem A: Electricity needs to be restored.
- Problem B: Utility wires and poles have to be removed from the road and replaced.
- Problem C: NJ does not have enough crews to do all of the utility work.
Kling: But then, “because A is not working, problems X, Y and Z emerge.”
Me:
- Problem X: Schools are closed.
- Problem Y: Cell phones cannot be recharged at home.
- Problem Z: Traffic lights do not work.
And then, as you can see, B and C, and X, Y, and Z each create a list of their own problems.
Kling: “…my guess is that it will take much longer to get back to normal than people are assuming. In fact, the process will take so long that in the meantime “normal” will have been redefined.”
As economists, what is our bottom line? Infrastructure interdependence takes us to many positive and negative externalities.
The entire Arnold Kling post is here.
