A real buy out
Posted by aogFriday, 31 August 2007 at 18:55 TrackBack Ping URL

It’s the Katrina anniversary, so it’s time once again for my policy pronouncement, which has become a bit more nuanced (personal growth and all that).

I still think we should do more disaster relief as a federal buy out. The federal government becomes the insurer of last resort, but if you take the pay off you are agreeing to sell the property to the federal government, which then reverts it to its natural state. People who don’t want to do that don’t have to take the money. It would be expensive at first, but over time we’d eliminate the worst places from the continuing build / wiped out / bailed out / rebuild cycle.

I thought about this long term, though, and think there should be one more twist. The purchased properties should be put on auction periodically, with a reserve price of whatever the government paid. If no one thinks it’s worth that then it stays federal.

The most interesting post I have seen about the disaster is this one, which claims that

  • Katrina was only Category 1 when it hit New Orleans, not even Category 3.
  • The failed walls were never even close to overtopped but were fundamentally flawed and would have eventually collapsed without a hurricane.

I would say it makes a strong case. I don’t find it hard to believe that there was shoddy work and shoddy maintenance on critical infrastructure in New Orleans, and that post facto everyone involved busted their buns to keep it quiet. And that Old Media completely missed the story. That’s SOP.

As for New Orleans, I gave up on it when they re-elected Roy “Chocolate City” Nagin. The two years after Katrina have proved that regardless of what any one wants, it is not possible for the federal government to fix what’s wrong with New Orleans. Whether the funds never got there, or weren’t spent, or were wasted by corruption, or whatever, the fact remains that the effort was an utter failure and there’s zero evidence it won’t continue to be. The local population spent decades digging themselves in to a hole literally and politically and it’s time to stop digging.

Comments — Formatting by Textile
Michael Herdegen Saturday, 01 September 2007 at 04:22

Was New Orleans and vicinity worth $ 100 billion and counting to the rest of the U.S. ?

It’s a serious question on my part - while my knee-jerk response is “no”, maybe the value of the physical property, plus decades to come of economic activity, make it a good investment. Does anyone have any insight ?

Annoying Old Guy Saturday, 01 September 2007 at 07:08

It’s a very open question whether $100B was spent. If you read through the WizBang comments, one of the New Orleans partisans makes some good claims that numbers in that range are pure political posturing with no reality on the ground, because the money wasn’t really allocated, was allocated but so red taped it never got spent, or was double counted money that went elsewhere (such as Mississippi). Based on past federal efforts, I find that a very plausible claim. Whether it’s true isn’t relevant for my rhetorical purposes, because it’s undeniable that it didn’t work.

Ignoring that, I have to answer your question in two parts. The first is your hypothetical, that the $100B actually fixed New Orleans. In that case, the answer is a definite “maybe”. New Orleans is a major port, one of the largest in the world, so it’s not where it is for no reason. However, it’s not clear it needs to be a viable city as opposed to primarily an industrial zone. On the other hand, if it’s so valuable, it wouldn’t need that much federal money to recover, just enough to get re-started and let the industrial users pay for the rest.

The second answer is based on what actually happened, in which case absolutely not. It was not worth $100B to get New Orleans from the state it was in after Katrina to the state it is in today.

Michael Herdegen Saturday, 01 September 2007 at 11:18

The port was actually up and running two weeks after the storm, although at reduced capacity. On Sept. 13th, 2005, the Port of New Orleans began unloading its first cargo ship after Hurricane Katrina.

Here is a very interesting STRATFOR piece about the historic significance and current importance of the Port of New Orleans.

The City of New Orleans, however, has been in decline for quite some time. The United States acquired it with the Louisiana Purchase in 1803, and by 1840 New Orleans was the third most populous, and possibly the wealthiest, city in the nation. In 1960 the city’s population was 630,000, while the nation’s population was around 177MM. By 2003, there were only 470,000 residents of New Orleans, despite the national population growing to around 290MM.

The median 2007 estimate for NOLA population is 275,000. Other estimates range from 255,000 to 320,000.

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