The New York Times reports,

The storm damage had a synergy of its own. Efforts to pump floodwaters from subway and automobile tunnels were slowed by electrical shortages. Hastily arranged car pools became bogged down on highways and city streets clogged with other commuters. Many gas stations, without power to operate their pumps, could not open for business, eerily evoking the fuel crisis of the 1970s.

This is consistent with what I wrote in a post that most people disagreed with, and which may yet prove to be mostly wrong.

But I worry that people have sunk too deeply into folk Keynesianism, in which economic activity consists of jobs and spending. Spending creates jobs, and jobs create spending. So let’s send everybody back into the city to work and spend. Instead, I would be inclined to shut down the hair salons and the boutiques for a few days longer in order to clear the roads to bring in generators and repair workers. And I would not want the additional logistical challenges of holding the NYC marathon. I keep thinking that there is probably some 70-year-old couple trapped on the 10th floor somewhere without electricity or running water, and perhaps city personnel should be dealing with them rather than with setting up water stations and barricades for a race. But maybe that’s why Bloomberg is mayor of New York and I’m not.

I think of the economy as a system for collaboration over long distance. I taunt locavores by saying, “why stop with buying only from farmers in the community? Why don’t you refuse to buy anything that was not manufactured and made from materials that can be found within a one-block radius of where you live?”

I occasionally fantasize about what I would have done differently on the Allied side during World War II. Instead of trying to bomb cities and factories, I would have tried to take out the main transportation conduits, particularly railroad bridges and highway bridges. I would also have gone after electrical transmission stations, fuel pipelines, and the water distribution system.

Forget about whether my fantasy strategy would have been feasible. The point here is that the storm executed that strategy in New York. It took out key transportation arteries, electrical transmission, and it disrupted the fuel and water system. To me, the economic consequences of that look much worse than the destruction of the World Trade Center (although more people died in that attack).

Maybe it will all get fixed more quickly than I first assumed. I hope so. But I stand by the point that if you think of the economy as a system of collaboration, then the conduits that facilitate collaboration are vital. Losing subway tunnels and electricity is a big deal. And, as the paragraph quoted above illustrates and as I wrote in the other post, the patterns of interdependence make for a compounding effect.