The New South

This post was originally written for Watchblog. The Gulf Coast has been destroyed by what most people now agree is the worst natural disaster in American history. Never before has so large a region been so utterly annihilated. Estimates of the rebuilding cost have grown exponentially, from $6 or $7 billion during the first few days to $150 billion now. Right off the bat, President Bush is seeking $40 billion to begin the rebuilding effort. No doubt we will have more accurate estimates in the months to come, but it is clear that a gigantic sum of public, non-profit, and private money will be spent to help Gulf Coast residents get their lives back. But how should it be spent? With the caveat that these are preliminary thoughts in the preliminary stages of redevelopment, I offer some principles that governments and non-profits can follow to stretch their dollars farthest and create a sustainable long-term solution for the New Gulf Coast. (1) Use market mechanisms. There is nothing more ineffective than money spent by fiat. Capitalist governments can somehow lapse into communism during a disaster, suddenly believing that they know best how to spend the people's money. The principle application of this is that victims should not be forced to return to the Gulf Coast in order to receive assistance. Those who wish to move away should be able to take some of the money that would have been spent on them along to their new homes. To do otherwise will perpetuate poverty by funneling those dependent on outside money into an area they might not otherwise choose. (2) Compensate in accordance with loss. In the short run, the poor were hardest hit, and are accordingly receiving most of the short-term assistance. In the long run, however, property-owners have paid the biggest toll. A rebuilding program that focuses on rental housing and public-sector buildings will yield a region artificially dependent on outside money. (3) Repeat after me: Big business is beautiful. Big business is big jobs, big construction money, and big municipal taxes. This doesn't mean that municipalities or states should prostitute themselves by offering huge tax incentives, but rather that businesses should be given wider-than-usual latitude to pick locations, buy property, and build facilities. Every regulation reduces the efficiency of industry and its job-creating power; right now, the Gulf Coast needs industry to be as efficient as it possibly can be. Secondly, governments should teach their money to follow the private money. As George Friedman writes for STRATFOR, the geographic importance of New Orleans dictates that a port must exist there. So industry will have to return to the region, and where and how it spends its money will be a good clue to bureaucrats of how best they can spend theirs. (4) Get out as soon as possible. Outsiders, government and otherwise, should make it a point to give control of local institutions back as soon as possible. This is a basic tenet of international development, and the need for locally-led civil society is no less within our borders. (5) Expect civility; punish lawbreaking. The saddest part, to me, of this whole disaster has been the Hobbesian response by many of the victims. Unlike New Yorkers after 9/11, they have been seen as selfish and roguish, lacking in social restraints. This may be an unfair media portrayal; I have no way of knowing. But assuming it is correct, people at all levels of society should demand high standards from those they encounter. The New Gulf Coast will be built of concrete and timber, but its real foundation must be the social contract that allows people to live in community with others. (6) Allow for change. Don't assume the way things were was the best way. In a region as poor and vulnerable as the Gulf Coast, this should be self-evident, but it probably isn't. For instance, could we build parts of the new New Orleans on higher ground than the old one? The redevelopment effort shouldn't be a $150 billion CTRL+Z! Follow the examples of Chicago and San Francisco, and build something better in the place of what was destroyed. ***** In closing, let me paint a picture of what will happen if the opposite is done. New Orleans and other cities will become a parody of their former selves; a crude imitation. Without new ideas, the old problems - both geographical and social - will be recreated, but the soul of cities will be diminished. A boom of public housing construction will make the Big Easy the easiest place to be unemployed and unproductive, and a few years after the units are shown glistening on TV screens they will be as run down and vacant as public housing anywhere. With heavy taxes, environmental restrictions, and red tape, business will be sluggish. Operations will be moved overseas if possible, and fewer and worse jobs will exist in the old population centers. What private redevelopment there is will occur out in the exurbs, with atomized SUV suburbs taking the place of now-unattractive downtowns. Without much aid, small business, hotel and luxury apartment owners will leave their lots vacant, or sell them to Target, or skimp on the rebuilding. And the rest of the U.S. will not see any benefit from their funds; no new residents, no new ideas, no New Orleans - at least not the one we knew and loved. Is this an ugly picture? Yes, but not unrealistic. I was in decrepit Niagara Falls yesterday, and a great many other rust belt cities lie in very much the same condition. The opportunity to reverse New Orleans' three-decade decline, and to uplift many poor Gulf Coast communities, is upon us. Let's turn Katrina to good.