Obama Pledges Full Federal Resources to Aid Irene Clean-Up, Recovery

We are making sure folks have all the support they need as they assess damages, and including states like Vermont, where there has been an enormous amount of flooding, Obama said, adding that he is in continual dialogue with Federal Emergency Management Agency (FEMA) officials.

The response and recovery efforts will be an ongoing operation, and I urge Americans in affected areas to continue to listen for the guidance and direction of their state and local officials, Obama added.

Vermont: Widespread, Damaging Floods

Vermont Gov. Peter Shumlin said on Monday that Hurricane Irene has produced the worst flooding in nearly a century, with hundreds of roads closed and at least three iconic covered bridges torn away by floodwaters.

Heavy rain deluged southern and central Vermont on Sunday, swelling rivers and producing flash floods that erased roads and in some cases cut off inundated communities. While the full extent of the damage was not clear on Monday morning, there was no doubt that Vermont was hit hard.

Appoints Economist Alan Krueger as Chief Economic Advisor

Obama updated Americans on the Irene recovery effort during a brief statement Monday from the White House Rose Garden where he named Princeton Economist Alan Krueger to head the Council of Economic Advisors.

Even as we deal with the natural disaster of Hurricane Irene, our great ongoing challenge remains how to get the economy growing faster, Obama said. I rely on the counsel of my economic advisors to provide unvarnished analysis...to make the decisions that are what's best for the country, not for a political coalition. My hope is that we can put country before party and get something done for the American people. That's what I'll be fighting for.

Hurricane Irene: Bad, But Damage Could Have Been Worse

Hurricane Irene shut down the neon lights on Broadway in New York City, and did substantially reduce commercial activity over the weekend -- including canceling thousands of flights, but the storm's economic damage will likely be far less than originally predicted.

Tragically, Irene is responsible for at least 22 deaths, but its downgrade to a tropical storm from Category 1 status decreased its damaging wind speeds and accompany storm surge -- something that undoubtedly reduced the level of damage and destruction in New York City, New Jersey and Connecticut -- and also probably saved lives.

Hurricane Irene will likely cost insurers $1.5 billion to $3 billion to cover claims for damaged homes, vehicles and businesses, said Jose Miranda, director of client advocacy at Eqecat Inc., a catastrophic risk management firm in Oakland, Calif. Total damage, including uninsured losses, could range from $5 billion to $7 billion, he said, latimes.com reported Monday.

The U.S. government estimated that the cost from wind damage alone will exceed $1 billion, CNN.com reported Monday

In comparison, the 1994 Northridge, Calif. earthquake cost insurers $40 billion to $50 billion in property damage, and Hurricane Katrina in 2005 cost about $70 billion in insured losses alone.

What's more, an estimated 4 million customers are without power across the Northeast alone; dollar damage estimates on restoring the electric grid are not available at this time.

Political/Public Policy Analysis: To be sure, Hurricane Irene, in the short-term, will hurt the U.S. economy. Long-term, however, if past natural disaster rebuilding efforts are any indicator, it will boost GDP, as rebuilding typically leads to an increase in construction employment in zones affected, as well an increase in orders and sales of building materials.

Further, in light of the storm's less severe path -- the hurricane made landfall in New Jersey, decreasing its strength substantially -- the entire Northeast U.S., and in particular New York City, has to feel like it has been spared: a Category 1 or 2 hurricane could have inflicted catastrophic damage on New York and surrounding areas.