Hurricane Harvey as a mini-stress test

Q: What's George W. Bush position on Roe vs. Wade?
A: He doesn't care how people get out of New Orleans after Katrina.

- Joke that circulated in the aftermath of Hurricane Kartina


There are many stories coming out in the wake of Hurricane Harvey that hit Texas. I was most struck by this BBC account of the woman who was too poor to evacuate from her mobile home:

Judie stayed, she tells me, because she had no means to leave and no place to go.

"I had some problems getting out of town, a little broke and stuff, so I had to come home and, you know, tough it out," she says. "We're all the working class people.

"We're the ones who go to the restaurants and wait on you and pick up your trash and do all that work. We don't have a lot of money."

"Fighting for the American dream," she adds, with a rueful laugh.

Hurricane Harvey may prove to be a significant stress test for both the American economy and the Federal Reserve. A recent Bankrate survey indicated that only roughly 4 in 10 Americans have sufficient savings to cope in an emergency, which is indicative of the low margin of financial error that the household sector operates under.

The full post can be found at our new site here.