Katrina Dreaming

On September 15, 2005, President Bush spoke from the dark and damp Jackson Square in ruined New Orleans, shortly after the city was destroyed by Hurricane Katrina.  In that speech, he made the following promise:

"Throughout the area hit by the hurricane, we will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives. And all who question the future of the Crescent City need to know there is no way to imagine America without New Orleans, and this great city will rise again."

The politics of the time basically demanded that the President sign a blank check of this nature.  Two years on, however, we are barely beginning to learn the scope of the bill.  As of last month, the administration calculates $114 billion as having been spent to date.  It's been estimated that the final costs will top $200 billion.  As American taxpayers, we can only ask this question:


No, not "Why is it costing so much?"  The answer to that is obvious.  New Orleans is an entire city, that was more or less destroyed.  How much does it cost to rebuild a whole city?  Considering all that goes into a modern city - police and fire stations, hospitals, water and sewer pipes, electric cables, streets and sidewalks, stoplights and road signs, to say nothing of the actual homes and offices used by the citizens, $200 billion seems actually like quite a bargain.

The real "Why?" is a totally different question.  That is to say, why are we spending these unimaginably vast sums of money to rebuild... New Orleans?

The city of New Orleans is one of the oldest cities in the United States.  It's been ruled in turn by the French, the Spanish, back to the French again, and most recently the United States.  At the mouth of the Mississippi river, it's always been a major trading port, transshipping goods from riverboats to ocean-going ships.  With the ebb and flow of rulers and trade, it has also collected an eclectic mix of cultures, leading to its own very distinct culture, of which Mardi Gras and gumbo barely scratch the surface.

However, its position at the juncture of the flood-prone Mississippi, the hurricane-prone Gulf of Mexico, and Lake Pontchartrain, has always left it vulnerable to disaster.  Even the French were not total fools; the "French quarter" of the city is built on a scrap of natural high ground - and, one notes, did not badly flood during Katrina.  The large majority of the rest of the city, however, and the venue of the disaster, is built well below water level, on reclaimed land.

When you must look up at ships sailing two stories over the roof of your house, a rational person would begin to wonder whether this was entirely a good idea.  Despite best efforts, the law of gravity has yet to be repealed, and "water seeks its own level" is just as true today as it was in the days of the French.  While dikes and polders may work very nicely for the Dutch, the U.S. Army Corps of Engineers has, shall we say, a less than stellar track record of good hydraulic design.  In fact, it's now generally thought that the work of the Corps was not merely insufficient; it actually made the situation worse.

Why, then, would we even consider dumping an endless flow of taxpayer dollars into what is, and will always be, a disaster waiting to happen?  If even we simply took truckloads of dollar bills and poured them into the low spots, it might raise part of the city above sea level, accomplishing something.  As it is, though, what do we have to show for it?  Precious little.  The Katrina money spent thus far amounts to more than a thousand bucks per American family, and with surely at least that much again to go.  This begins to be painful, especially as the value of most household's biggest asset - their house - is dropping in most markets.

And therein lies a solution!  While the Katrina expenses are $1,000 per U.S. family, they are also equal to $235,000 per pre-Katrina New Orleans resident.

What insanity drives us to attempt to rebuild a deathtrap?  Far better that we blow up the levees; let the whole place flood, except of course for the French quarter, which is safely above the water level and always has been.  Wouldn't it make more sense simply to write a check to each refugee for their share of the rebuilding amount, and let them find their own home elsewhere?

According to the laws of supply and demand, when demand increases, so does the price.  Right now many areas are suffering from falling housing prices.  Dump the population of New Orleans, armed with federal cash, into these areas; and the problem will resolve itself quite nicely.

Once again, the federal government has stolen large amounts of money from the electorate and, without referendum or discussion, given it to people who should have other contingency plans standing by.  It is your money that was given to New Orleans.  What did you get for it?  Will new jobs be created or unemployment lowered because of this?  Will your dollar be strengthened; your education standards be raised?

Shuffling unhappy residents from one city to the next has its own problems, as Houston has painfully discovered, but the government can only steal money for so long before the citizenry runs out of it - or before they run out of tolerance.  Informed voters are losing patience every day with a conservative administration that is fiscally irresponsible and a liberal legislature that is worse.  With so much stagnant housing inventory, wealth is shrinking.

For liberals and bureaucrats this is far too simple a solution.  Far be it from our public servants to do something that would actually solve two problems.  No, they'd much rather spend preposterous sums on something that is no solution at all.  Then, come the next hurricane in 5 or 10 years, we will see another president stand in Jackson Square, make another promise... and start the cycle again.

Petrarch is a contributing editor for Scragged.  Read other Scragged.com articles by Petrarch or other articles on Economics.
Reader Comments

(Quote)And therein lies a solution!  While the Katrina expenses are $1,000 per U.S. family, they are also equal to $235,000 per pre-Katrina New Orleans resident.(End quote).

Of course. It would be a 'handout' but at least every displaced citizen would get a one-time direct handout. I wonder how much the real figure would be, how much of the $235,000 estimate is gone in 'managing' the crisis.

October 5, 2007 1:42 PM

Would you say the same about Los Angeles or San Francisco if they were devestated by an earthquake?  A plausible argument could be made that it makes little sense to rebuild cities constructed on faults that will inevitably lead to devastating earthquakes.  

October 12, 2007 5:06 PM
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