With Its Economic Heft, Houston Is Equipped to Recover From Harvey

Unlike New Orleans after Katrina, the city is better-positioned to absorb the blow from what could be the most expensive U.S. storm ever

But unlike New Orleans, the greater Houston area economy is better equipped to absorb the blow because of its size, diversity and prominence as the nation’s energy hub.

.. Houston is the country’s fourth-largest city by population and economic output, with 2.3 million people and a gross domestic product of more than $503 billion

.. At the time of Katrina, New Orleans had a population of roughly 450,000 and an economy largely dependent on tourism.

.. Some 84% of Houston’s economy was dependent on the oil-and-gas industry during the 1980s, according to data from the Dallas Federal Reserve. But that had dropped to about 44% by 2016.

.. Houston boasts one of the largest medical centers in the world. Its health-care and education industries were the city’s largest employers as of 2014

.. Mr. Kamins of Moody’s predicts the real “economic tragedy” will be for homeowners. He predicts that most of the property damage—$30 to $40 billion in damage to homes and vehicles—will be residential and is unlikely to be covered by insurance.

.. construction would provide a short-term boost to the economy, but that there could be constraints on the available labor force for building projects if people leave and don’t return and President Donald Trump pursues tighter immigration policies.

..  you can’t rebuild Houston without Mexican labor.”

.. Nearly 40% of small businesses never reopen their doors following a flood disaster, in part because many are uninsured

The Hoarding of the American Dream

the top quintile of earners—those making more than roughly $112,000 a year—have been big beneficiaries of the country’s growth. To make matters worse, this group of Americans engages in a variety of practices that don’t just help their families, but harm the other 80 percent of Americans.

.. if we are serious about narrowing the gap between ‘the rich’ and everybody else, we need a broader conception of what it means to be rich.

the upper-middle class has pulled away from the middle class and the poor on five dimensions:

  1. income and wealth,
  2. educational attainment,
  3. family structure,
  4. geography, and
  5. health and longevity

.. They dominate the country’s top colleges, sequester themselves in wealthy neighborhoods with excellent public schools and public services, and enjoy healthy bodies and long lives.

They then pass those advantages onto their children, with parents placing a “glass floor” under their kids.

  • They ensure they grow up in nice zip codes,
  • provide social connections that make a difference when entering the labor force,
  • help with internships,
  • aid with tuition and home-buying, and
  • schmooze with college admissions officers.

All the while, they support policies and practices that protect their economic position and prevent poorer kids from climbing the income ladder:

  • legacy admissions,
  • the preferential tax treatment of investment income,
  • 529 college savings plans,
  • exclusionary zoning,
  • occupational licensing, and
  • restrictions on the immigration of white-collar professionals.

.. As a result, America is becoming a class-based society, more like fin-de-siècle England than most would care to admit, Reeves argues. Higher income kids stay up at the sticky top of the income distribution. Lower income kids stay down at the bottom. The one percent have well and truly trounced the 99 percent, but the 20 percent have done their part to immiserate the 80 percent, as well

Reeves offers a host of policy changes that might make a considerable difference:

  1. better access to contraception,
  2. increasing building in cities and suburbs,
  3. barring legacy admissions to colleges,
  4. curbing tax expenditures that benefit families with big homes and capital gains.

.. Expanding opportunity and improving fairness would require the upper-middle class to vote for higher taxes, to let others move in, and to share in the wealth.

.. Prying Harvard admission letters and the mortgage interest deductions out of the hands of bureaucrats in Bethesda, sales executives in Minnetonka, and lawyers in Louisville is not going to be easy.