Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 18, 1994 TAG: 9401180221
SECTION: NATIONAL/INTERNATIONAL PAGE: A10 EDITION: METRO
SOURCE: The Washington Post
DATELINE: LENGTH: Medium
But analysts said the long-term economic damage could be much worse.
The Southern California economy has suffered a series of recent shocks - fires, mudslides, riots, falling real estate values and a devastating decline in its defense industries - that pushed unemployment into double digits and undermined confidence among consumers and business executives.
Spending to clean up and repair the quake's damage, including likely federal government assistance, should give the recession-plagued economy a boost.
The question is whether that spending will be enough to offset the economic impact of the quake's psychological trauma on the region's residents. Some officials and analysts expressed fear that the earthquake may be the sort of straw-that-broke-the-camel's-back event that convinces many already skeptical people that Southern California is simply not a place in which to live or do business.
"My heart is sinking," said Sen. Barbara Boxer, D-Calif. "We had just turned a corner in California, with riots and fires and everything that has occurred in these past few years, so it is very disheartening."
Others took a more optimistic view, including Kent Briggs, executive director of the Center for the New West, an economic research organization with offices in Southern California and Denver.
"There is a sort of fatalism about these things among Angelenos," said Briggs, of Long Beach.
"I do not think it will contribute to people leaving. . . . It is the nature of these kinds of phenomena, if you are used to it - in the Midwest the tornados, hurricanes in the Southeast - you learn to roll with the punches," said Briggs.
A major concern among businesses thinking of relocating has been the region's severe congestion. Employees spend hours commuting on the network of freeways that are its transportation lifelines. Damage to several freeways, including the Santa Monica Freeway that carries traffic west from central Los Angeles, will mean even worse traffic jams for many weeks.
As usual in earthquakes, most of the property damage was not covered by insurance, according to Sean Mooney, senior vice president of the Insurance Information Institute, a trade association.
Mooney said insured losses likely would be close to the $1 billion cost to his industry in the quake that hit the San Francisco area in 1989. That compares with the $4.2 billion in insured losses in Hurricane Hugo in 1989, in which total losses were put at about $7 billion. Hurricane Andrew in 1992 did an estimated $25 billion to $30 billion in damage, $17 billion of which was insured, he said.
by CNB