Fox Business panel hopeful Houston tragedy will be a "positive" boost to the economy
Panelist predicts destruction wrought by Hurricane Harvey will help auto companies "clear ... excess inventory"
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From the September 1 edition of Fox Business' Varney & Co.:
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ELIZABETH MACDONALD: George W. Bush administration, 2001, dealing with 9/11 they had a laser focus on tax cuts. To the point where Dick Cheney stepped in to do the deciding vote to make tax cuts happen. The administration needs a laser focus like the George W. Bush administration had on tax cuts to get growth going.
STUART VARNEY (HOST): Okay, hold on a second. The overall cost of [Hurricane] Harvey, Lonski, they put it at, what, $160 billion? Is this a negative for the overall economy in the third and fourth quarters of this year?
JOHN LONSKI: I think it's a positive --
VARNEY: A positive?
LONSKI: At the year end of 2017
VARNEY: But the human tragedy?
LONSKI: A lot of that money is for the rebuilding. Just talking about in dollars.
VARNEY: Economically good?
LONSKI: You saw all that furniture, the ruined furniture out in the streets. All of that's going to have to be replaced. There is -- a lot of construction will have to occur, and so on.
MACDONALD: Auto sales.
LONSKI: Auto sales, exactly. This is very helpful for the auto industry in the United States. It will clear them of excess inventory.
VARNEY: We have a guest later in the show, about literally in a few minutes time actually, who says that 500,000 cars were destroyed. That's a nice market, isn't it? For replacement vehicles.
LONSKI: That's right. So it gives these automakers a nice temporary lift.
VARNEY: And there is some suggestion that people can use the money from their 401(k)s and their IRAs without penalty if they use it to recover from the flood. That's stimulative.
JEFF SICA: Yeah. There's one concern I have right now is the amount of people that don't have flood insurance in Houston, Texas. That is a major concern. I own real estate in Houston, Texas. There's a lot of people -- when you talk about consumer spending -- there's a lot of people in what's been a very, very strongly performing economy in Houston that might cut back on spending because they have to pay for things that insurance would normally cover.
MACDONALD: Well, wait a second. Look, after Hurricane Sandy, auto sales popped 49 percent in the month after that in the New York area. 49 percent pop.