Go even further down the price list, and I dare you to find a rationale for doing nothing.
Take the case of Moonachie, N.J. The town, about 10 miles northwest of Manhattan, was inundated when a section of levy on the Hackensack River failed (or was simply overtopped by the tidal surge) and 5 feet of water poured into the town of 2,700. Flooding from this "break" also spread to nearby Little Ferry and Carlstadt.
Read the Oct. 24, 2005, Hackensack Meadowlands Floodplain Management Plan to see how incredibly predictable that was. The plan surveys areas subject to flooding in any kind of hard rain. For example, Carol Place in Moonachie experiences severe flooding during any large (two-year to five-year) storm. Potential causes for minor flooding include the lack of a pumping system and clogged catch basins. The cause of severe flooding in harder rains is, the report acknowledges, "unknown."
At Broad and 20th streets in Carlstadt, restoration of the Peach Island Creek tide gates was recommended to prevent tidal surges from moving up that creek. A diving company with experience in inspecting tide-control systems should be hired to assess the extent of necessary repairs to the gates, it says. The condition of the gates was "unknown" as of the time of the study.
Let's see: "survey and repair tidal gates" versus "pump water out of flooded town." Yep, it seems the economics are pretty clear. I think you could compile a similar laundry list of disaster-related infrastructure investments in just about any part of the United States you'd like to name.
And, in case you haven't noticed, these examples make it clear how dumb the current abstract debate about budget deficits is.
When borrowing makes sense
Companies borrow money all the time to invest in their businesses. The issue isn't whether borrowing an additional $100 million is bad or good but what the return will be compared with the cost of the investment. Borrow $100 million to upgrade furnishings in the executive suite? Bad. Borrow $100 million to buy equipment that increases productivity? Good.
Same thing in government at all levels. (Although I would argue that the problem gets larger as you move further from local government and as the sums involved get bigger.)
Spend $823,000 for a General Services Administration "training" session in Las Vegas? Bad.
Spend $823,000 to upgrade flood protection along the Hackensack River? Good. Unless, of course, you think having the National Guard evacuate people from flooded homes in an economically devastated city is a good use of money if it is avoidable. (And note that borrowing at the federal level is currently incredibly cheap. That's not a reason to borrow more, but it sure does change how the profit/loss calculations on any investment come out.)
Of course, our national discussion of the "fiscal cliff" facing the U.S. government at end of 2012 isn't going to include anything as radical as looking at return on investment. How could it, when the country doesn't even do a capital budget that treats investments as a separate category?
Instead, we're going to slash this program and spare that one based on which interest groups yell loudest -- and which groups have contributed the most to the politicians who are best placed to influence the decisions.
Maybe someday -- after another devastating natural disaster of two in other parts of the country --the United States might invest in ways to prevent damage to its infrastructure -- or even in improvements to existing infrastructure. But listening to the closing days of this election, I'm not counting on that happening anytime soon.
Meanwhile, buy Lumber Liquidators and dream of a world where economic logic decides where our tax dollars are spent.
Updates to Jubak's Picks
These recent blog posts contain updates to the stocks in Jubak's market-beating portfolios:
- Why Yamana shares are soaring
- Signs of trouble for Apple?
- Why Costco shares could hit $110
- Freeport-McMoRan's solid quarter
- Abbott, Bristol-Myers race for hepatitis cure
- Banking investors cheer Citigroup results
- Stillwater shares recover as strike settles
- Why Xylem is looking better
- Price worries in the rare-earth markets
At the time of publication, Jim Jubak did not own or control shares of any company mentioned in this column in his personal portfolio. The mutual fund he manages, Jubak Global Equity Fund (JUBAX), may or may not now own positions in any stock mentioned in this column. The fund did not own shares of Lumber Liquidators as of the end of June. Find a full list of the stocks in the fund as of the end of June here.
Meet Jim Jubak at the MoneyShow Las Vegas
MSN Money columnist Jim Jubak will be one of dozens of financial experts on hand at the MoneyShow Las Vegas, May 13-16, at Caesar's Palace in Las Vegas. And admission is free for MSN Money readers. Just click here to register, and click here to see what Jubak plans to talk about.
Can't make the show? You can log on live and watch Jubak's presentation on "3D printing in 30 minutes," as well as a panel discussion with Jubak and other MSN Money bloggers, "Top stocks from MSN Money's Top Stocks." Click to register in advance, then return for the free webcasts.
Jim Jubak's column has run on MSN Money since 1997. He is the author of the book "The Jubak Picks," based on his market-beating Jubak's Picks portfolio; the writer of the Jubak's Picks blog; and the senior markets editor at MoneyShow.com. Get a free 60-day trial subscription to JAM, his premium investment letter, by using this code: MSN60 when you register at the Jubak Asset Management website.
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The funniest line I ever heard from the late, great George Carlin:
"I have a message for the people of New Orleans. If you want to live five feet below sea level, join the Navy."
And the old rule will hold true until the end of time: "You can't fix stupid."
We cannot make a United States of Holland. You cannot build a levy around the coast lines of a whole world. And this is exactly what some authorities are suggesting, regardless of common sense, regardless of the facts sitting right in front of our eyes.
Once again, we have been reminded of the most obvious fact -- that nature (like an ocean) is going to go where ever nature wants. Placing the majority of a country's population along one coast line that was suceptible to hurricanes was just looking for trouble.
What we should be doing now is asking ourselves how would you honestly classify the investment value of a city, like New Orleans, that has levies on all sides and resides well below the level of the ocean, and will one day flood permanently? And in sorting through the debris that is New York City and Hoboken, how do we avoid the fact that we have more than just one New Orleans right here in in the present to deal with.
This whole business about "shining cities by the sea" said nothing about how dry they would be.
I too live where I can look out my window and see the surf / fishing /diving conditions along the ocean. The view is spectacular, neighbors are great, and there is nothing better than watching that sun rise every morning with that first cup of coffee. HOWEVER- My windstorm & flood insurance are very expensive, and that's on top of my regular home owners insurance. I have metal, roll down shutters that seal up the house but again, they're very expensive. If you want to live on the coast, or near it, you have to invest or buy those things to protect your property & your life. When the victims of Sandy rebuild, and they will, they should consider all of these important to maintain their lifestyle.
Here in Florida, we are well seasoned in hurricane preparation and if anyone would like some advice, just ask .
The problem seems to be we spend so much on the politically popular or nonessential stuff that nothing is left for what is needed. What makes this even worse is that both sides are dug in and will not move.
hehe unemployment "inched" up to 7.9, you people kiddin' or what?!! seriously now! INCHED!!?? ok, ok you want to talk INCHED? it INCHED up from 17% to 18%, there you go, there's your INCH you idiot whacko marxist loony libs!
man, if only Sandy blew away all the insane libs in media and gov't and left only logical humanity behind, can you imagine how great this nation would actually be?
The following came from ABC News Again, NOT FROM FOX!
When the mainstream media starts outing Obama, you know The Chit is about to Hit the Fan!
They know that if they hide this until after the election, what little cred they have left, is TOAST!
Republicans on the House Committee on Oversight and Government Reform have released new documents backing up claims by security personnel previously station in Libya that there was a shortage of security personnel in Benghazi.
contain previously unreleased cables from Ambassador Stevens and his staff reflecting concerns about safety in the country.
The U.S. State Department did not have an immediate comment.
One signed by Stevens and titled “LIBYA’S FRAGILE SECURITY DETERIORIATES AS TRIBAL RIVALRIES, POWER PLAYS AND EXTREMISM INTENSIFY,” dated June 25, 2012, assess the increase in violence. ”From April to June, Libya also witnesses an increase in attacks targeting international organizations and foreign interests,” Stevens wrote, describing attacks on a United Nations official in Benghazi, International Committee for the Red Cross buildings in Benghazi and Misrata, and IED at the mission in Benghazi, and RPG fired at the British Ambassador’s convoy, and an attack on the consulate of Tunisia.
Here’s CBS’ latest release on Benghazi, NOT FROM FOX;
"CBS News has released a clip of an interview by Steve Kroft of 60 Minutes on Sep. 12 with President Barack Obama that indicates Obama knew the assault on the U.S. consulate in Benghazi, Libya was a premeditated terror attack–and suggests the White House later deceived the public by blaming protests against an anti-Islam video. CBS chose not to air the clip for over a month–but did air Obama’s attack on Romney that same night."
"CBS News has learned that during the Sept. 11 attack on the U.S. Mission in Benghazi, the Obama Administration did not convene its top interagency counterterrorism resource: the Counterterrorism Security Group, (CSG).
The CSG is the one group that’s supposed to know what resources every agency has. They know of multiple options and have the ability to coordinate counterterrorism assets across all the agencies,” a high-ranking government official told CBS News. “They were not allowed to do their job. They were not called upon.“
NOBODY placed the population anywhere.......people, at least for now, are FREE to live where they want. Many chose the coast. They will suffer the consequences, then freely decide to stay or leave.
That's the price of freedom. Many nitwit "I know what's best" types will scream for laws, taxes, and other ways to force and control peoples choices on movement. To the extent that they succeed, we loose as a free people.
After the hyper-storm years or 04' & 05', the weather channel had a special program called "What If?" It chronicled a 'what if' storm event to impact New York City. Anyone remember that ? Kind of scary now that this prediction is a reality . To say, "oh-it's just a cat 1, it won't be bad" is fools thinking. Hurricane Wilma in 05' was a cat 1 and flooded 60 % of Key West, and the Keys, half of South Florida (some were miles from any coast line) & knocked power out for day's on end everywhere here. This storm, Sandy, was a wake up call for anyone living near our coast lines (West coast too).
Now we're seeing the break down of raw emotions of hurting, grieving people trying to cope with thIs destructive event. If you can volunteer some time to go and help, please do - we're all
ONE HUMAN FAMILY !
If you can't travel there, send monies, food, clothing, medical needs, or whatever you can think of-they have nothing.
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[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
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