Voting - Last-minute donors are buying "stock at 52-week high"

De Blasio and Early Supporters, Brooklyn. Photo by JT Marlin.

Crains Insider has an inform-ative story by Andrew Hawkins about real estate developers resignedly writing checks, for the max allowable, to mayoral candidate Bill de Blasio -- even though it is late, one week before the election and de Blasio is a shoo-in with a 45-percentage-point spread between him and Joe Lhota.

What impressed me most about the article was a campaign contributor's acknowledging that late giving to a candidate was not buying much, that it was like "buying a stock at its 52-week high", as opposed to important early volunteering and money that paid for de Blasio's advertising campaign. The EMILY in "Emily's List" stands for "Early Money Is Like Yeast."

Both labor unions and real estate contributors mostly put their early bets on Christine Quinn or Bill Thompson. Polls as of February showed Quinn ahead three to one, with de Blasio just one percentage point behind Thompson, and I noted that de Blasio had the advantage of incumbency. But then Anthony Weiner shot into first place, showing that enthusiasm for front-runners Quinn and Thompson was weak. So when Weiner's campaign faded, de Blasio's ad featuring Dante Blasio and his Afro provided the boost for de Blasio to take Weiner's place in the lead. After de Blasio won the Democratic primary outright, it became clear that Joe Lhota was battling against a huge spread in the polls. Lhota's attack ad on crime got nothing for him, as de Blasio added five percentage points to his lead. So the campaign cash is now flooding in to de Blasio's campaign.

The final debate between de Blasio and Lhota is on Wednesday evening (sandwiched between the anniversary of Sandy on Tuesday and Halloween on Thursday) from 7 to 8 pm on NBC-TV.

De Blasio v. Lhota - The Issues, 2 weeks before Election

At the Harvard Club of New York yesterday, two surrogates for the mayoral candidates battled it out. Both were Democrats, and both are crossovers from other candidates, selected by the two campaigns.

Senator Brad Hoylman

Senator Brad Hoylman. Speaking for Bill de Blasio was NY State Senator Brad M. Hoylman, a 1989 Rhodes Scholar from West Virginia who went on to Harvard Law School after receiving his M.Phil. from Oxford. Hoylman is a past President of Gay and Lesbian Independent Democrats, picking up Sen. Tom Duane's seat when Duane resigned. Hoylman previously served as Executive Vice President and General Counsel of the New York City Partnership. Hoylman supported Christine Quinn in the Primary, and is supporting de Blasio as the choice of the Democratic Party in New York City.

Randy M. Mastro, Esq.

Mr. Randy Mastro. Mastro is 11 years senior to Hoylman based on college graduation and is a New York City native. Mastro supported both Thompson and Lhota in the two party primaries, although he identifies himself as a Democrat. He is co-chair of Gibson Dunn’s Litigation Practice Group, named “The Litigation Department of the Year” by the American Lawyer. Comments from peer reviews: Mastro “deserves an Academy Award” for “bringing a sense of drama and theater to his courtroom appearances.” “You REALLY don’t want to meet him in a lighted courtroom." In 1994-1998, Mr. Mastro served as Mayor Rudolph Giuliani’s Chief of Staff and then Deputy Mayor for Operations. He oversaw all of the City’s operating agencies and budget, and served as the Mayor’s chief liaison with elected officials. Previously, in 1985-1989, Mr. Mastro served as Assistant U.S. Attorney and Deputy Chief of the Civil Division. He graduated cum laude from Yale College and the University of Pennsylvania Law School, where he was the school’s moot court champion. Mr. Mastro served as law clerk to Justice Alan B. Handler of the New Jersey Supreme Court. In 1982-1985, he was a litigation associate at Cravath, Swaine & Moore. He chaired two New York City Charter Revision Commissions.

The Issues

The following issues are in the order they were brought up at the Q&A session after the two surrogates for de Blasio and Lhota made introductory remarks.  Some of the arguments below showed more sophistication than the exchange in the NY Times at the end of August.

Charter Schools.  Hoylman - Mr. de Blasio is on record as wanting to charge the charter schools rent for use of the public schools. Charter schools disrupt the public schools they operate in sometimes, and some of them take bathrooms, for example, out of commission for the public school students. They take resources away from public schools. Mastro - Mr. Lhota wants to double the number of charter schools. Bill de Blasio shows lack of support for the charter schools experiment.

The Debt and the Budget.  Hoylman - Mayor de Blasio would meet the City's fiscal obligations; he has to balance the budget. Mastro - Would de Blasio be able to look the unions in the eye after they have worked to elect him? Lhota could be tougher because he owes the unions nothing. Bloomberg has just kicked the union issue down the road. Right now they have zero increases. When the percentages are written in, there will be a huge retroactive budget increase, which means less money for other services or higher taxes.

Climate Change (Hoylman Scores Big).  The environmental questions were about siting of a marine transfer station on the upper west side and the mayor's position on fracking.  Hoylman - It's time that Manhattan took on some of the burden of its own garbage - for too long garbage has been trucked to Staten Island and the other outer boroughs. On fracking, we need a study to investigate the safety of the process and in the meantime we need a moratorium. Mastro - There are limits to what a mayor can do for the environment. Bloomberg has certainly been in the vanguard, with new bike paths and parks and riverfront amenities. However, a marine transfer station next to Asphalt Green would affect the ability of poor kids to use the sports amenities in this area. On fracking, a "study" is a euphemism for doing nothing. Cuomo did the studies. Lhota won't feed voters with euphemisms. He is a straight talker. Besides, fracking is an upstate issue, isn't going to happen in NYC.  Hoylman - Upstate issue? Where, Mr. Mastro, do you think New York City's water comes from? We need a mayor who understands this, and respects upstate water if only because we drink it. We have enough natural gas to carry us through another look at what fracking is doing to our water table.

Sandinistas. Someone asked a leading question about de Blasio's support of the Sandinista rebels in Nicaragua many years ago. Hoylman - His visit to Nicaragua shows his concern with equality. He is still concerned with inequality in the United States and the fact that it is growing. It speaks to Bill de Blasio's character. Mastro - Yes, it speaks to de Blasio's character.

NYPD "Stop and Frisk" Policies (Mastro Scores).  Will your candidate abandon successful stop-and-frisk procedures because of the new court finding against it? Hoylman - a Federal judge says that the stop and frisk procedures need to be fixed. Mastro - Stop and frisk is perfectly constitutional.Giuliani's  NYPD did it. Now a federal judge wants to run the NYPD? Bill de Blasio says he won't appeal? It looks like we are going to go back to the days of consent decrees. But we are also going to have an independent inspector. And police officers are now subject to law suits if they make the wrong call on an arrest. Hoylman -  Mr. de Blasio supported the program that New York City was preparing to monitor the stop-and-frisk procedure. It might have obviated the need for the federal judge's decision. Mastro - Why is he saying he won't appeal the decision, when NYC has its own inspector? Why another? Why isn't he saying - This is my city and I don't need a judge trying to second-guess me and my police chief?  Hoylman - de Blasio would work with the judge. [Update: Mayor Bloomberg's appeal was heard and at he end of October the appellate court transferred the case to another judge, on the basis that the federal judge on the case had engaged in misconduct.]

Should We Worry That NYC Will Be Democrats All Round?  Hoylman - No. Equality of parties doesn't guarantee anything. The New York State Senate is balanced and the deadlock means nothing gets done. The last Democratic mayor was 20 years ago, before the Internet was invented. Mastro - We don't want deadlock but it is helpful to have tension. It generates debate. I am concerned that we have made so much progress since the 1990-1992 era that we forget what it was like when the Democrats had complete control.

Afterwards I joined a few people from the audience for dinner. I figured they were three-to-one Republicans. None of them appeared to be involved, or likely to be involved, in the election beyond voting. Two of them asked questions that were critical of de Blasio. I asked them why they weren't going to put their money or time behind Lhota.

"Too late. It's a done deal. What, a 50 percentage point lead, in the polls? We will have to live with Mayor de Blasio for four years." They drowned their sorrows, the Democrats celebrated, and the Harvard Club got some unexpected bar revenue on a Sunday evening...

JOE LHOTA | Why Is NYC Deaf to Tough-on-Crime Tune?

Giuliani Endorses Lhota

Rudy Giuliani in 1993 and 1997 campaigned brilliantly on the issue of public safety, picking up on a theme that Richard Nixon hammered at, mashing up student protests with a rise in crime to argue that lawlessness was undermining New York City.

I was the Chief Economist for the New York City Comptroller's Office for the entire eight years of Giuliani's mayoralty. I remember leaning forward with anticipation when a reporter struggled to get Giuliani to move on from"law 'n order" to his economic-development strategy.

Rudy replied something like this: "As long as corporations are moving out of New York City because of crime, as long as property values are threatened by crime in the streets, my economic-development strategy is to reduce crime." So there.

This tough-on-crime electoral strategy worked from the 1960s through the 1990s. It worked for Nixon, for Ronald Reagan, for George H. W. Bush, and for hundreds of candidates in state and local elections. Even a supposedly liberal Republican like Nelson Rockefeller signed onto a draconian drug law.

The conservative mantra was:

• Liberal police chiefs would not let the cops do their jobs.
• Liberal judges would let criminals back onto the street.
• Liberal parole boards would grant parole too easily.  

Joe Lhota saw how this worked for Giuliani. He is piping the same tune. But this time, no one is dancing, or joining in, or even listening. De Blasio continues to ride high in the polls despite Lhota's soft-on-crime ads.

Why isn't the music working any more? Lhota has a new attack ad suggesting that de Blasio would bring New York City back to the high-crime days of the 1960s and 1970s. De Blasio spokesman Dan Levitan said:

Lhota is right that we can’t go back. We shouldn’t return to the days when Republicans like Giuliani used fear tactics to divide New Yorkers against each other.

Well, here are pieces of a counter-mantra that might explain New York City's deafness to the issue:

• Crime is down in New York City and everywhere in the United States. There are lots of explanations. Here's one I like: The civil rights movement of the 1960s has calmed down groups in the cities that were hostile to the police.Having a black president surely helps establish that the country offers opportunities for black citizens.
• Police work has gotten better in NYC and all over the country. Cops are being managed more efficiently. Crimes are tracked minute by minute and are analyzed. Task forces are sent to hot spots. 
• Tough on crime means more people in prison, which is costly.  Three percent of the American population is behind bars or on parole and probation – U.S. prisons hold 20 percent of all the people incarcerated in the world. Conservatives and libertarians are increasingly about the cost of this. Legislators are showing rare unanimity on this topic. In 1994, Newt Gingrich's Contract with America promised to put more people in prison. But now he is concerned about the huge costs of the large prison population, "in dollars and lost human potential".  
• Some rehabilitation programs work. There are some successful programs to prepare ex-offenders for return to the workforce. The 2012 Republican platform called for prisons to "attempt to rehabilitate and institute proven prisoner reentry systems to reduce recidivism and future victimization."

NYC | Money > 2:1 for de Blasio

Bill de Blasio with an early campaigner. Photo

 by JT Marlin.

Once it was clear that Bill de Blasio had come from way behind to be the favorite in the NYC mayoral primary, the conventional wisdom was that de Blasio for Mayor would be a hard sell to the NYC establishment and that business money would flow to his opponent, Joe Lhota.

That seemed to be the pattern for the first two weeks after the primary on September 10. Lhota raised more money than de Blasio during that period. It wasn't clear where the Thompson and Quinn votes would go. A report came out saying that one-quarter or more of the Quinn votes would go to Lhota.

But two things happened next:

(1) By September 24, polls were out from the NY Times/Siena College and Quinnipiac pollsters that both gave de Blasio a three-to-one advantage. If Quinn votes were going to Lhota, they were thin on the ground.

(2) During the next two weeks, de Blasio has been raising more than twice as much as Lhota, as the table below shows.

	de Blasio	Lhota
Dem, GOP primaries, 9/10	$6,800K	$3,800K
First 2 weeks after primary	$153K	$156K
Since polls showed 3-1 deB	$635K	$280K

Source: NYC Campaign Finance Board filings

The latest poll in October shows deBlasio's advantage has climbed to 3.5 to one. Lhota has become a long shot. De Blasio's campaign team and consultants, having pulled off an upset, are not likely to be caught napping in the short campaign before the general election.

The wild card will be the independent messages from donors to Citizens United-type campaign funds trying to influence the election without having to reveal their identity. While these messages are a potential menace to any candidate, they are less targeted because they are prohibited from engaging in "express advocacy" for a client against another candidate -- and they are therefore likely to be less effective than direct campaign messages.

NYC | Lhota v de Blasio on the Economy

Joe Lhota (L) and Bill de Blasio (R).

In preparation for the Primary, City Limits magazine collected the views of mayoral candidates on economic development.

Given that the two main candidates are now facing off in the General Election in less than five weeks, these views are worth consulting again, this time more attentively.

Joe Lhota (Republican nominee for Mayor of New York City)

• "Diversify our economy and provide an environment conducive to job creation and the elevation of the standard of living in all five boroughs."

• "Create a climate that will encourage and sustain job growth, including reducing burdensome regulations and taxes that stifle private sector growth."

Bill de Blasio (Democratic nominee for Mayor of New York City)

• Reform or eliminate corporate tax breaks to save the city $250 million and devote it to CUNY

•  Form cohesive system from currently disjointed job training and placement programs, especially for less-skilled workers

• Expand CTE high schools

• Use better zoning enforcement and infrastructure investment to promote manufacturing

• Strengthen “neglected" sectors by building economic development hubs in each neighborhood and launching loan and investment funds to provide capital to local start-ups

• Reduce fines on small businesses and increase their chances of landing city contracts

• Expand sick day coverage, push for higher wages through city contracts and provide better work-rights enforcement

Bill de Blasio, Joe Lhota, and the Future of NYC

Bill de Blasio with neighborhood friends from Brooklyn, 

November 24, 2013. Photo by JTMarlin.

New York City has been blessed with a succession of strong mayors, and now we have two strong candidates for mayor - the "second-toughest job in America," as the late Mayor Koch used to say.

Mayor Bloomberg will be a hard act to follow. Coming in right after 9-11, he was a godsend and must be considered one of the great mayors of the city. Having a mogul as Mayor was a signal that the city is likely to be safe for other moguls, and gave them confidence to stay, to visit and move in. The steady aggregation of wealth in Manhattan keeps the NYC brand strong, even if Wall Street's rep is in the gutter. NYC is still the safest big city.

Adolfo Carrion (L) and Joe Lhota (R) at AARP Mayoral

Forum. Photo by JTMarlin.

But, lucky as we are to have had him lead the City, Mayor Bloomberg is leaving behind some big problems for de Blasio or Lhota to deal with. For starters:

• The NYPD's "stop and frisk" hunts for illegal weapons or other contraband have been deemed unconstitutional by a Federal judge because they have had insufficient cause. Race is not enough of a reason to stop someone. The judge says a cop has to have a reason for stopping someone. That doesn't mean crime rates are going to have to soar again.
• The labor unions are chomping - no, foaming - at the bit for long-delayed collectively bargained contracts. The new agreements could be budget-busters. Depends on how the revenues come in and the U.S. economy is still recovering from 2008-09.
• The people Mayor Bloomberg chose to turn the school system around, and the methods they are using (such as constant testing) have been strongly criticized. Needs some re-thinking. 
• His economic development programs have been heavily real-estate-oriented and involve unprecedented levels of new property-tax abatements that will pinch the budget as more services are required for new areas of development.
• The late-in-the-game tech initiative, a Cornell campus on Roosevelt Island, may disappoint for the very reason that was its impetus - the City's interest in making use of property on Roosevelt Island.
• The Mayor's ability to fund his own election campaigns has meant that he is not forced like other politicians to hunt for contributions - which has kept him above interest-group pressure, great, but also has kept him detached from the hoi polloi.    

Both Bill de Blasio and Joe Lhota are capable of running  New York City. The major differences between them are ones of personality and policy.

• Personally, de Blasio is warm, enthusiastic, and neighborly, whereas Joe Lhota is tense, combative, and remote (when he is under stress, his eyelids come together as if he seems to want to shut out all the rest of the world).
• On the policy front, de Blasio wants to level the playing field for NYC's middle class and poor people, which means more services for them and probably higher taxes on the very well off. Lhota's biggest concern is to avoid raising taxes at the top rates and to keep NYC safe for wealthy apartment buyers. They both will be tempted to put these differences under the light of class warfare. Lhota may think he will win most this way, but I wouldn't bet on it. Not this year.

The unions may have been divided in the primary, but most of them seem to have no trouble scrambling from the Quinn and Thompson camps to de Blasio. The first two polls show de Blasio ahead by a three-to-one margin. (These numbers are virtually the same as those for Quinn vs. Lhota way back in 2012 when de Blasio was an unknown.) The first tests for the next mayor will be whether he can work out labor agreements that don't break the budget.

The good news for the next mayor, whether de Blasio or Lhota, is that New Yorkers are weary of their mogul. Twelve straight years of Bloomberg after eight years of Giuliani means that City Hall has gradually been cut off from the public, for reasons of security and of philosophy, in ways that were inconceivable in the Koch and Dinkins days.

To bridge the gap between income and wealth inequality described as "the two cities", de Blasio has made a specific proposal to get a little more money from the rich (raising the top tax rate slightly, by a fraction of a percentage point, on those earning more than $500,000 a year) to provide expanded access to early-childhood education for everyone. Offering earlier schooling means the working parent or parents can go back to work earlier, while the children are socialized earlier and are likely collectively to perform better in higher grades. NYC businesses will reap the benefit of a more skilled workforce. Lhota has accepted half the idea, the universal pre-school part, rejecting the idea that higher taxes would be needed.

In the less than six weeks between now and the election, the two campaigns and the many "independent" voices will be painting the choices in various colors of class warfare. Lhota has already said that de Blasio is using a "Marxist Playbook". The realistic range of policy options in New York City does not take us into the terra incognita of "There be Dragons" Marxism. But the City does face real choices.

NYC MAYOR | Can Catsimatidis Get GOP Nod?

John Catsimatidis campaigning for the GOP nomination for Mayor
of New York City. Unexpected developments in the Democratic primary
are making people take a second look at GOP candidates. Photo: Cats site.

I was invited to breakfast meeting last week to hear from a candidate for the GOP nomination for mayor of NYC, John Catsimatidis.

There was no charge for the event. He doesn't need to raise funds. He ranks 132nd on the Forbes 400 and 458th on a global list of billionaires, with a net worth of $2 billion.

That may make him look like a piker by Bloomberg standards, but Cats doesn't need to take six-to-one matching funds from the City of New York. All NYC taxpayers should be grateful for that.

The thrust of Cats's pitch to the group of 75 people who came to hear him was that he was a self-made man who worked his way in a few years from being a grocery store clerk on 137th Street in Harlem, to running ten stores with a yearly volume of $25 million, generating income to him of $1 million. This has become the Gristedes grocery chain.

He has also made investments of approximately $1 billion in real estate, and owns interests in aviation and a Hellenic newspaper among other businesses. He has been a major player in getting the Greek Orthodox churches to work together. Anyone who knows about political fundraising in the United States respects the commitment of Greek-Americans to their candidates.

Cats describes himself as a GOP liberal–pro-business but interested in helping others, young and old. Sounds like Bloomberg. He is pro-safety and would reappoint Ray Kelly as Police Commissioner. He likes trade schools where graduates can go straight into jobs–electrical, carpentry, nursing, other health care services. He would bring in a Deputy Mayor who would recruit high-tech companies to come to New York City.

How would Cats differentiate himself from the other main GOP contender, Joe Lhota? He has the backing of former Mayor Giuliani and is more widely known as a government executive than John Catsimatidis.

Cats's response:

• Joe Lhota has a bad temper.
• He called Mayor Bloomberg "an idiot".
• He called the Port Authority police "mall cops".
• Lhota can't raise enough money to win. Cats would put his own money into the race. (Both Lhota and de Blasio will abide by spending limits to qualify for matching funds.)

L to R: Nick Sakellariadis, Harry Wilson and John Catsimatidis.

A mid-August Quinnipiac poll of likely GOP voters showed Lhota - former deputy to Mayor Giuliani and former MTA chairman - with 43 percent of likely primary voters, versus 37 percent for John Catsimatidis. The margin of error for this poll is 9.4 percentage points, which means that Lhota and Catsimatidis are in a statistical dead heat. Compared with the month before, Lhota lost 6 percentage points while John Catsimatidis increased his support by 2 percentage points. George McDonald is in third place with 9 percent.

My prediction is that Cats's potential as a candidate will be directly dependent on whether or not he does what he says he will do, i.e., hire people who are "better than me". He needs to rein in his impulses.

As an example, Cats promises to dig up all the concrete barriers (or, from a pedestrian point of view, islands). Citing the situation on 7th Avenue, he sees the battle as one between motorists and bicyclists. Sure, the Citibikes would have to be evicted from a lot of the areas where they are now protected by concrete islands. But pedestrians, especially seniors and children (for whom Cats has special concern), and parents of young children, and dog-walkers, have also become enamored of the greater ease of crossing the wide avenues with an island as a refuge on the way. The avenues are scary places to cross, especially for older people and people with disabilities. Those islands are lifesavers. Wholesale destruction of the islands would be a huge setback for NYC.

John Catsamitidis at this event and at others I have attended came across as hugely likeable. However, he needs someone to buy him a bigger-sized jacket and shirts with vertical stripes to disguise his Santa Claus figure. He should assemble a team of people with experience in different aspects of New York City government. He should announce who they are. Then he should listen hard to them before he announces with a wave of his hand what he is going to do. He had me eating out of his hand and then, like the 13th cuckoo of the cuckoo clock, he loses my confidence with a grand statement that appears to reflect his personal self-interest as CEO of a large grocery chain.

His chances of becoming mayor when Christine Quinn was the front-runner were remote. But NYC's business establishment is not going to be enthusiastic about a Bill de Blasio mayoralty and they will be looking for a Republican to support. When Cats first started campaigning, he did not convey seriousness about his candidacy - too ready with the wisecrack. He has taken a few steps towards being taken seriously, picking up a few allies. In the volatile atmosphere of the 2013 elections he just might be able to win the GOP nomination. In this crazy year, voters for the first time have to choose a successor to a 12-year mayor who looks better to many than the people who want to replace him. As the negatives of each of the candidates are ferreted out, Cats's prospects of winning in September and November have risen.

To find out more about candidates you hadn't paid any attention before, go to the Campaign Finance Board, which has an on-line Primary Election Voter Guide now available here or here.

Hurricane Sandy - 5th, 6th Most Severe?

How will Hurricane Sandy rank in severity, for example, compared with Hurricane Irene? A number of estimates are already appearing and estimates of insured losses have been growing beyond the first estimate of $10 billion, which would imply a total cost of approximately $25 billion using a rule of thumb described below.

In 2011, Hurricane Irene was described as being the fifth-costliest hurricane in U.S. history. I didn't believe it, and I checked it out. This number should not be used. Hurricane Irene does not even rank among the ten most costly. A dollar ranking that does not adjust for inflation is just not useful.

The suggestion has already been made that Hurricane Sandy will be the costliest East Coast hurricane ever. Some superlatives have been used:

-          The MTA says Sandy is its worst disaster ever because of the corrosive nature of the salt water from floods on its tracks.

-          Con Ed says this its worst disaster ever.

-          On Long Island, 90 percent of LIPA customers are without power.

-          The Wall Street Journal posted satellite photos showing Sandy is larger than Irene.

-           

The WSJ concludes that Sandy will cost more than its estimate of a $15 billion cost for Irene. NY Governor Cuomo has observed that the cost of Irene was mostly upstate, whereas the cost of Sandy is downstate.

Prospective Measures of Severity

The significance of an oncoming storm is now estimated by meteorologists based on wind-speed categories and barometric pressure. The two measures are interrelated and point to likely wind speeds. The public needs also an indicator of the likely economic impact of flooding.

1. Five Wind-Speed Categories. A Category 1 hurricane means wind speeds of 74-95 mph on the Saffir/Simpson Hurricane Scale. The categories go up to 5 for wind speeds above 155 mph. Hurricane Irene petered out on its way north. The warm air carried by Hurricane Sandy on its way north met another storm with cold air from the northwest.

2. Millibars - Barometric Pressure. The Christian Science Monitor has posted a lucid summary of the importance of this measure of hurricane severity. (It also repeats the error cited above about the cost of Hurricane Irene - I will return to this.) Ordinarily, the barometric pressure is related to wind speed. The normal sea-level barometric pressure is 1013.5. During a hurricane the eye of the storm shows the lowest barometric pressure. The lower the pressure, the higher the winds. During the afternoon before Sandy hit landfall, the barometric pressure at its eye fell from 943 to 940, which is a level associated with Category 3 or Category 4 winds. The lowest barometric pressure that has been measured in a U.S. hurricane is 882 for Hurricane Wilma. Hurricane Carla was the tenth-lowest, 931. The National Hurricane Center list of the most intense Atlantic hurricanes does not follow the Millibars ranking exactly, since Katrina and Wilma are not in the order one would expect.

      Ten Windiest (“Most Intense”) Hurricanes

Name (after 1953) or Location	Year	Category	Millibars
1.Florida Keys	1935	5	892
2.Camille	1969	5	909
3.Katrina	2005	3	920
4.Andrew	1992	5	922
5.Indianola, TX	1886	4	925
6.Keys, FL	1919	4	927
7.Lake Okeechobee, FL	1928	4	929
8.Donna	1960	4	930
8.Miami, FL	1926	4	931
10.Carla	1961	4	931

Notes: Wind Category is at Landfall. Category 5 on the Saffir/Simpson scale means 155 mph winds for at least one minute. Category 4 means 131-154 mph for at least one minute. Category 3 means 111-130 mph for at least one minute.  Millibars are mercury readings for barometric pressure. Source: Based on NOAA, National Weather Service, National Hurricane Center, Blake and Gibney, 2011.

3. Flood Surge Impact. However, most of the damage is caused by the delayed impact of the flooding surge (the hurricane equivalent of a post-earthquake tsunami). We need a new indicator of likely flood damage, which would have to take into account the economic value of property in the track of the hurricane, the sea level of the land, and the size of the expected surge.  The Flood Surge Impact index could take into account the timing of the tides – Hurricane Sandy hit landfall near high tide and the full moon added to the height of the tide and therefore to the surge. The geography of the surge was important in the case of New York City because the surge came from two directions – down the Connecticut coastline through the Long Island Sound and northward through the funnel of New York Harbor.

Retrospective Measures of Cost

There are at least six basic ways to measure or adjust the cost of a hurricane. They overlap:

1. Loss of Life, or Injury.  While every life is precious, on the simple measure of number of lives lost to a hurricane, Hurricane Irene's 24 lives lost did not even rank among the 100 most costly hurricanes. Preparedness is much better than it used to be, and evacuation is widely recommended. Mayor Bloomberg has made clear that the overriding priority of the City of NY is to avoid loss of life among residents and emergency workers. The mayor has taken a scientific approach to evacuation based on flood probability maps that use feet above sea level a proximity to water to create three evacuation zones. These maps proved highly predictive. Also contributing to reduced fatalities is the steady improvement in (a) U.S. Government warning systems via NOAA and its National Weather Service and National Hurricane Center, and (b) the FEMA network of state notification and assistance.  Loss of life can be converted to a dollar figure via life insurance losses or a value that economists impute to a person's remaining working life. Injuries also represent a cost either to the individual or to health insurance plans (private or governmental), and injuries that result in a disability have a working-life cost that can be attached.

The final number for lives lost from Hurricane Irene appears to be 24. Just one of the deaths was in New York City. The deadliest Atlantic hurricane since 1900 was in Galveston, in 1900, with a range of between 8,000 and 12,000 deaths.

    Five Deadliest Atlantic Hurricanes Since 1900

Name or Location, Category	Year	Deaths
1. Galveston, TX, 1900, Category 4	1900	8,000-12,000
2. Lake Okeechobee, FL, 1928, Cat. 4	1928	2,500-3,000
3. Katrina, Category 3	2005	1,200
4. Florida Keys, Category 4	1919	600 (287 land)
5. Long Island Express (Great NE), Cat. 3	1938	600 (256 land)

Source: NOAA, National Weather Service, National Hurricane Center. Blake and Gibney, 2011. The National Weather Service started giving names to hurricanes in 1953. 

The fifth-deadliest was the 1938 Long Island Express. On the criterion of deadliness, Hurricane Irene did not qualify as one of the five most severe.

2. Loss of Physical Property.  Property can be destroyed by wind or flooding or a combination. This means a loss of wealth of the property owner. If the loss is charged against revenue, it means a loss of revenue. (A building may be a depreciated asset; loss of inventory is likely to be expensed.) The first impact may be flying debris, the lifting off of roofs, the flattening of flimsily constructed buildings. The delayed effects include (a) loss of electricity from downed power lines, which means that many perishables have to be thrown out, and (b) flooding, which destroys or rends temporarily useless all kinds of property such as books and electronics, especially if the flooding is from salt water, which MTA Chairman Joe Lhota and Con Ed Chairman Kevin Burke say is especially damaging to power connections, create huge problems for electricity supply and transportation infrastructure.

3. Business Interruption. The delayed effects of a hurricane also include business interruption. Increasingly, businesses insure not only against loss of property but the loss in profits that comes from an interrupted business. When a restaurant or a theater remains closed because of floods that prevent people from showing up, it is hard to make up the loss because the business space has a limited capacity. That is something that is not fully taken into account by those who look for a large rebound after a disaster, as might be true of a retail store that offers a post-hurricane sale. Some kinds of losses are much harder to make up Figures on the cost of hurricanes increasingly include business-interruption losses, which bias upward the later numbers – another reason it is so important to adjust for inflation as discussed below.

4. Insured vs. Uninsured Private Losses. Insurance companies are most interested in the total of insured losses. But from an economic perspective, losses to individuals (e.g., workers paid by the hour) are real. The money that would have been spent in the community by the individuals is missing. The National Hurricane Center uses a simple formula to estimate uninsured losses - it doubles the number for insured losses.

5. Government Losses. At the national level, flood insurance is provided by the National Flood Insurance Program. Individuals pay a premium for this insurance, which would otherwise not be available. After a hurricane, there will be payouts and a loss that may exceed cumulative premiums. The National Hurricane Center in its estimate of damage adds in the number for flood damage provided by the National Flood Insurance Program. FEMA programs provide relief to local governments and individuals. Other Federal bodies (the dewatering unit of the Army Corps of Engineers, for example), states (emergency response teams) and localities (police, fire, sanitation, ambulance) must also be factored in as costs of a disaster.

6. Adjustments for Inflation or Growth in Business Activity. Two kinds of adjustments are typically made to comparisons among hurricanes. One is to adjust cost figures for inflation. The Christian Science Monitor story cited above incorrectly describes Hurricane Irene as the fifth mostly costly hurricane in U.S. history. As I explained last year, that label only works if we are under the delusion that a dollar 100 years ago should be valued the same as a dollar today. (Apart from the fact that business-interruption costs are increasingly included in hurricane losses, adding to the size of the numbers.)  There are widely available cost-of-living indicators to refer to, such as this one from the BLS. Business activity measures are used to relate hurricane damage to the value of the real estate through which the hurricane travels. This is a good predictor of cost and is also a factor to consider in comparing the impact of a hurricane traveling the same path in different years.

Total Economic Damage

The deadliest hurricanes are not always the costliest in terms of property loss or business interruption.

The ten costliest Atlantic hurricanes are listed below with their estimated damage. Total estimated damage includes insured and uninsured losses. A rule of thumb is that uninsured losses equal insured losses. So if an insurance association or forecaster estimates that insured losses are $10 billion, then total private losses (insured plus uninsured) are commonly estimated at $20 billion. In addition, losses are borne by Federal, state and local governments – the cost of special national insurance programs like flood insurance, or the cost of FEMA assistance, or the cost to states and localities of the overtime of emergency assistance personnel or the damage to public infrastructure.

Note that earlier estimates are generally based on physical damage only, whereas later economic impact numbers, after WWII, include impacts such as business-interruption costs because these became widely insured events.

In addition, dollar-value rankings must be adjusted for inflation. There is no sense in unadjusted dollar numbers that go back to 1900. The most costly U.S. hurricane ever was the 1926 Miami Hurricane, which cost $165 billion in 2010 dollars according to the National Hurricane Center.

       Ten Costliest Hurricanes (pre-Sandy)

Rank	Hurricane	Year	$bil. (2010 $)
1	Great Miami	1926	164.8
2	Katrina	2005	113.4
3	Galveston	1900	104.3
4	Galveston	1915	71.4
5	Andrew	1992	60.5
6	L.I. Express	1938	41.1
7	SW Florida	1944	40.6
8	Lake Okeechobee	1928	35.3
9	Ike	2008	29.5
10	Donna	1960	28.2

Source: NOAA, National Weather Service, National Hurricane Center, Pielke et al. (R. A. Pielke, Jr., J. Gratz, C.W. Landsea, D. Collins, M. Saunders, and R. Musulin, 2008: "Normalized Hurricane Damages in the U.S.: 1900-2005." Natural Hazards Review, 9, 29-42, cited in Blake and Gibney, 2011). Pielke et al. adjust historical data for inflation to 2010, wealth per capita and population. The adjustment for inflation is essential. 

Hurricane Irene's estimated cost was $15 billion. Clearly, it does not rank among the ten most costly hurricanes. However, Hurricane Sandy will surely do so. The key is insured losses and government losses. If Hurricane Sandy ends up with insured losses above $15 billion, the economic impact could end up at about $38 billion, and it will rank #8, between the SW Florida Hurricane of 1944 and the Lake Okeechobee Hurricane of 1928. But if insured losses approach $20 billion, the cost of Hurricane Sandy will end up above the 1938 Long Island Express, and would rank #6. If insured losses exceed $25 billion, it could rank ahead of Hurricane Andrew, at #5.