Japan TMs crisis could affect U.S. economy
Fri, 18 Mar 2011 02:45:49 GMT —
COLUMBIA (WACH, AP) -- The crisis in Japan led to a big sell-off of stocks in the financial markets earlier this week, but signs that the economy is improving helped investors put aside fears of a meltdown at the Fukushima nuclear plant.
U.S. Stocks rebounded Thursday as economists try to figure out how big of an impact Japan will have on the country.
According to USC Management Science professor Manoj Malhotra, there are concerns about shortages of Japanese goods, including auto parts and electronic components.
It could have a long-term disruptive affect on the supply chains. For example, many commercial flights that go to Tokyo aren't being taken because the demand for travel to Japan is gone.
He says if people can't get in and out of the country neither will imports or exports.
While some of Japan's auto and electronic manufacturers are assess damage caused by the earthquake and tsunami, others are experiencing a loss of power. The disaster shut down about 10 percent of the country's power generation.
Malhotra believes the uncertainty surrounding the nuclear crisis, which could likely result in Japan having to use other fuel sources to make up for the loss of its nuclear plants, may raise the prices Americans pay for gas.
Nuclear plants certainly take out some of the demand-base, Malhotra adds.
As officials struggle to get Japan TMs problems under control, opponents of nuclear energy are calling on U.S. leaders to retreat from the industry.
The director of USC TMs nuclear engineering program says industry experts can learn from what happened overseas.
The risks certainly are outweighed by the benefits, says Travis Knight, and one of the benefits is that it TMs a clean source of power.
Sen. Lindsey Graham (R-SC) says Japan's crisis shouldn't stop the construction of nuclear power plants in the U.S.
He told reporters he has confidence in America's nuclear energy, which uses a difference plant design than Japan.
(The Associated Press contributed to this report.)