After the Storms

Published



THE STORM CLOUDS that darkened the skies over New Orleans and Houston have lifted, but those that are darkening the economic outlook remain threatening. Some related directly to Katrina and Rita will pass sooner rather than later. But other clouds might, just might, prove to linger far longer, long enough to create as much economic havoc as the hurricanes created physical havoc.

The storms did have enough impact on the energy system, including offshore platforms, refineries, and pipelines to persuade two-thirds of the CEOs of America’s largest companies that their operations will be negatively affected for from three months to a year. Hank McKinnell, chief executive of Pfizer and chairman of the Business Roundtable, foresees “a significant but not catastrophic national effect,” and the 97 CEOs surveyed dropped their forecast of annual economic growth this year from a 3.5 percent to a 3.3 percent rate. To this economist, who has always believed that economic forecasters use decimal points to prove they have a sense of humor, this isn’t much of a change.

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