Earthquakes and other economy shakers.

• Author: Safir, Andrew
• Position: Alaska - Column

A SILVER ANNIVERSARY OF SORTS occurred on the West Coast recently, as the ground under San Francisco showed its distinct displeasure at the 4-0 loss of the Giants to the Oakland A's. It was 25 years ago last March that the Great Quake hit the 49th state. The Anchorage "tremor" of 64 measured 8.3 on the Richter Scale. This was approximately 12 times more powerful than the recent one in northern California, but substantially cheaper.

Even upscaling the 1964 estimates for current dollars, Anchorage suffered only $2.5 billion in damages. San Francisco estimates are now at $7 billion and climbing. Moreover, the economic aftershock of the 64 quake was clearly positive, as reconstruction spending vastly exceeded the dollars lost from tourism and related industries in the immediate aftermath of the destruction.

Unfortunately, this will not be the case in San Francisco. First, despite Mr. Quayle's flying visit and Presidential assurances, aid money just doesn't flow as rapidly as it used to. Bureaucracies have grown some in the last 25 years. Even an optimist should understand that the larger the bureau, the less it will do for you.

Second, the product mix of San Francisco today and its economic scale are vastly different than Alaska in 1964.

Tourism was not the lifeblood of Alaska back then, and even where it was important, the dollar size of the industry was pretty rudimentary. If anything, the Great Quake boosted tourist income by focusing national attention on a state that had hitherto been largely ignored as a tourist destination.

In contrast, San Francisco already had a massive tourist infrastructure, none of which was damaged, but much of which was tarnished by its fourth-quarter case of the jitters. As a result, any construction spending will be hard pressed to offset widespread losses in such areas as restaurants, hotels, taxis and sourdough bread.

There is a paradox here. Economic theory generally suggests that a diversified economy is more immune to recessionary forces than a developing...