1. Harvey to be Largest Natural Disaster in US History
2. 80% of Houston Homes Have No Flood Insurance
3. America’s Middle Class Making Strong Comeback
4. So, When is the Next Recession?

Overview

For most of this year, I’ve had a sense that the American middle class is increasingly growing, and that wages/incomes are increasing more than the Labor Department reports. I have been saving articles upon articles on this subject and was planning to extract the highlights and summarize them for you in the next week or two in these pages.

Over the weekend, however, I ran across an excellent piece on the expanding middle class from one of my favorite writers, Robert Samuelson, who has already done all the work for me on this particular topic. I will reprint it in its entirety below.

As you read it, pay particular attention to the section (with underlining) where he makes the case that wages for full-time workers are increasing at a median rate of 4% annually, rather than the apprx. 2.5% the Labor Department reports. I have read similar analyses from other independent sources elsewhere.

Before we get to the uplifting piece from Samuelson on the middle class, I have some thoughts and some facts and figures regarding Hurricane Harvey and the heartbreaking devastation along the Gulf Coast and parts of southeastern Texas.

Harvey to be Largest Natural Disaster in US History

Hurricane Harvey has dealt a devastating blow to the Houston region, which was recently on track to account for almost 2.5% of the nation’s economy (GDP) this year. The question is, how much will the disaster in Texas and Louisiana impact the overall economy in America?

The answer, of course, depends on how much it will cost to clean up all the damage and rebuild all or most of what was destroyed. Estimates of what it will cost to do this vary widely, but a consensus is growing that it may cost as much as $190 billion – and that number could grow.

This means that Hurricane Harvey is the largest natural disaster in US history in terms of the overall cost to the economy. Take a look:

Costliest US Hurricanes Since 1980

While Harvey devastated the Texas Gulf Coast and parts of Louisiana, and will take years to rebuild, estimates vary widely as to how much effect it will have on the national economy. Some forecasters predict Harvey will shave up to one full percent off of GDP nationally, while others continue to believe that 3Q GDP will come in above 3% when the first Commerce Department estimate is released at the end of October.