Just some notes today about close-to-home Hurricane Sandy economics.
- Walking down my NJ street, I stopped to talk with 2 gentleman in a truck from Gainesville, Florida. They said they did tree work and had driven the 1000 miles to look for business. And there was lots. Every neighbor has countless downed trees that need removal. That actually started me thinking how the euro-zone was created to facilitate the movement of labor and goods among many nations. And here, with labor from Florida in NJ, I saw the same idea firsthand.
- It is unbelievable that the governor of New York could have offered free gas to EVERYONE in NYC and Long Island. Worried about shortages, to millions of people, Governor Cuomo announced that 10 gallons of free gas would be available at emergency mobile gas stations. The idea did not quite work out. If you have a shortage of something and then offer it for free, what happens on the downward sloping demand curve? Much more quantity is demanded. Rather than create a public service, the Governor exacerbated the shortage and less was available for first responders to drive to storm emergencies.
- A huge tree is still resting on my neighbor’s car roof in his driveway. The car might soon end up at the Claremont Terminal scrap yard. A destination for bags of soda cans, steel from the old Yankee Stadium and now debris from Hurricane Sandy, the scrap business sees a supply increase after storms like Sandy. Described by a scrap yard executive, “You’ll see a quiet period as material is aggregated and cleanup begins, but then a lot will start coming in.” As he also explained, cars arrive last because of insurance issues. (This econlife post has more about scrap yards.)
Sources and Resources: This NBC report has more about the Governor’s free gas plan and pictures of the response while this WSJ.com article made the scrap yard business interesting and was the source of my quote.