Wednesday, September 21, 2005

Who Should Decide How To Rebuild New Orleans ?

First, let me state that it’s terrible that hurricane Katrina killed people in the Gulf states and caused so much property damage. The loss of life is a tragedy.

Now, the greater than $100B question- who should have the most, or deciding, say in how New Orleans is rebuilt?

If you are reading this, there is a 98% chance that you live in one of the states that is expected to be paying to rebuild New Orleans, but not in Louisiana. And there is a 99.8%, literally, that you don’t, or didn’t, even live in New Orleans. So that means chances are very good that your tax dollars are expected to rebuild a city you don’t directly support in your own state. Illinois has its Chicago, and New York state, its namesake city. Massachusetts supports Boston. I’m sure there are similar examples in other states as well.

But a whole country to support one city?

Does it makes sense that the city of New Orleans, and its state, which together couldn’t manage to keep it safe from reasonably expected hurricane exposure in the first place, are the groups who should have the final say in rebuilding it with other people’s money?

Nevermind that by requesting, or expecting, the rebuilding of the entire city, more or less, on a federal tab, they are already living beyond their means. I guess that’s federalism at work, like it or not.

Personally, I’d have a lot more respect for the government of the city of New Orleans, and the state of Louisiana, if they asked for federal loan guarantees, rather than direct grants and aid. For crying out loud, can't the local and state governments show some pride and initiative in this?

If they want the final say in rebuilding their city, then let them earn it. Ask for help borrowing capital that they will repay with a revitalized port, energy-related commercial zone and tourism areas that are safe and survivable. Rather than issuing demands that the rest of us, through the conduit of the federal government, simply hand over more than $100B to those government entities to spend as they wish. It takes a lot of gall to request/demand $100B to rebuild a city that wasn't safe in the first place, while seeming to stiff-arming the very people from whom they want the money when questioned as to how and why the reconstruction is to take place.

After all we have heard regarding the importance of the area to agricultural transport, energy production and distribution, and other general shipping needs, I don’t understand why the local and state governments can’t borrow against their infrastructure-based revenues to rebuild. I’d prefer to see the funds coming from increased prices paid for goods passing through that region to pay for the new and improved facilities, funded by bonds, than to simply hand over $100B to local and state governmental authorities.

Nobody questions the need and value or rebuilding damaged commercial infrastructure to standards which can better withstand a major hurricane, so long as that cost is economically rational. Either private or public revenue-backed bonds would seem to be feasible. If they can't attract capital, based upon the expected costs and revenues of improved and repaired facilities, then it begs the question of rebuilding commercial facilities there in the first place. What seems to be more in doubt is what kind of residential reconstruction is reasonable. Holman Jenkins wrote an excellent editorial about this in the Wall Street Journal two weeks ago.

I think Dennis Hastert had it right when he questioned whether the United States ought to be reconstructing a city which lies inside a below-water bathtub of levees. In the interest of full disclosure, by the way, I hail from Hastert’s state, Illinois. But that notwithstanding, I admire his comments. As the Speaker of the House of Representatives, the “people’s house” where spending bills originate, he is the ideal elected public official to voice such thoughts. He speaks for the 98% of us, from 49 other states, who wonder why, if we are going to substantially rebuild the city of New Orleans, those of us being asked to pay the tab don’t get to decide how it will be done.


Anonymous said...

This is a wonderfully original idea. It's too bad that the emotionalism cum tragedy of this disaster will create an inevitable wave of irrational behavior by the current administration. Add to this the administartion's overarching guilt at its performance failure re this disaster and one can see how the government will now race to embrace every vote-getting, emotional gesture, no matter how irrational.

C Neul said...

thank you. like many wonderful ideas, it has its basis in what actually exists. think industrial revenue bonds, special-purpose municipal financing, or the private construction of a toll road that is then sold to the govt, such as the Garden State Parkway in New Jersey

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