The Greatest Cost, Ultimately, May Be Just Inconvenience

For all the inconvenience and disruption inflicted by the great blackout of 2003, the damage to the national economy is not likely to be any worse than that from a bad snowstorm — a blip in the statistics that soon disappears. The potential for doing more serious damage to economic growth comes not from New York, but from Detroit and Cleveland, where power might not be fully restored until next week. “Blackouts are economically like snowstorms,” said Mark M. Zandi, the chief economist at Economy.com, referring to the 1965 and 1977 power failures, as well as this latest one. “They are a nuisance, but not a measurable one in the statistics that record the year’s economic activity.” Airlines, restaurants and retail stores have clearly been hurt. But for the economy as a whole, blackouts and snowstorms mostly delay economic activity and rearrange it, taking from one sector and giving to another, economists say. For every suit not sold at Saks, a generator may be sold at Lowe’s to someone newly interested in protection from the next blackout. Full Story