Why New Orleans Won't Recover

[johnfoyle]

http://www.slate.com/id/2137220/

Why New Orleans Won't Recover

An economic explanation based on the Chicago Fire, the Kobe earthquake, and my CD collection.

By Tim Harford
Posted Saturday, March 4, 2006, at 7:31 AM ET

My collection of Dire Straits compact discs languishes, unplayed, in the "ghetto" section of my music library. My decision to buy the albums dates back 15 years to a time when my brain was only half-grown. The physical discs themselves, though, are much newer. They were bought for me by a kindly insurance company after my flat was burgled and Money for Nothing, along with much else, was stolen. I could have done with something a little better aligned with my current tastes, but the insurance policy ruled otherwise.

How should we rebuild after disaster strikes? Should we try to put things back as they were before, or try to improve them, or cut our losses? The fraught question is much in the collective consciousness of America six months after Hurricane Katrina flooded New Orleans and destroyed other communities along the Gulf Coast.

Part of the problem is that the victims are kept out of the important decisions. My insurance company could have saved administrative expenses by simply writing me a check and letting me modernize my music collection without interference. But such an approach might have left me hoping for occasional break-ins. Since a careless householder exposes his insurers to unnecessary risks, their meddling is perhaps a necessary evil.

So too with New Orleans. Mayor Ray Nagin's "Bring New Orleans Back" commission has identified areas deemed to be unlivable and recommends compulsory government purchase of houses in those areas and a moratorium on rebuilding work there. Cue outrage from locals who believe themselves better judges than the mayor's commission of whether their homes are salvageable or not. They are probably right, but they also know that the government will bail them out financially if the levees break again. It's not surprising that the government wants to interfere, just as my insurance company did.

Unfortunately, governments have predictable blind spots when it comes to reconstruction projects. Any city—indeed, any economy—is a mix of growth and decay, but governments are not good at recognizing decay and allowing it to happen. All cities contain "Dire Straits" sections that should not be replaced if destroyed.

For example, after Kobe, Japan, was flattened by an earthquake in January 1995, with much greater loss of life even than in New Orleans, some areas missed out on the rapid economic recovery. Kobe had a cluster of small businesses making plastic shoes, but they were already under pressure from foreign competition. No private entrepreneur was interested in trying to resurrect the sector, and neither was the government. On the other hand, the prestigious port was quickly rebuilt, only to find that after briefly recovering to pre-earthquake levels, traffic ebbed away to rival ports and to air freight. The government had failed to appreciate that even though it could supply a world-class port facility, it could not provide the demand for it.

Cities have their own trajectories, governed mostly by the dynamism of their inhabitants and surprisingly little by their physical infrastructure. You can get a hint of that by looking at the price of a typical apartment in Manhattan, which topped $1 million a couple of years ago. Most of that price isn't the cost of the building but the value of being surrounded by other New Yorkers. A successful city is home to countless interpersonal networks that create innovation, or efficient economic production, or simply a good place to live. The architecture and city planning may help to establish those networks, but it can always be recreated quickly if damaged.

That may be why disasters rarely interrupt growth in a thriving city, while disaster reconstruction rarely prevents decay in a stagnant one. According to George Horwich, an economist at Purdue University who studied the aftermath of the Kobe earthquake, manufacturing in greater Kobe was back to 98 percent of pre-earthquake levels within just 15 months, despite the fact that six months after the tragedy rebuilding had scarcely started. Seventeen-thousand buildings in Chicago's central business district were utterly destroyed by fire in October 1871, but the city's recovery was astonishing, and its population trebled in 20 years. Chicago was on the way up, and the fire simply cleared the way for a more modern city assembled chiefly by the chaotic genius of individual entrepreneurs.

For New Orleans, a charming place for tourists but a desperate clump of poverty and poor schooling, the question is not whether the current reconstruction plans will create a thriving city—they will not. It is whether there are any that could.

Tim Harford is a columnist for the Financial Times. His latest book is The Undercover Economist.

[A rope leash]

Rumours persist that the levies were blown. It's possible, but in any case, they were left to deteriorate when they should have been built up. A Katrina-like disaster was predicted many years before it happened. The priorities were not there in the first place for New Oleans, because no one really gives a shit about a city built below sea-level at the mouth of a long and sloppy river. The town was populated by mostly by poor folks, which reads "black", especially in the South. Many of those folks are just not coming back, and in the end it won't be them making the decisions about what happens to their property.

So, now it's ripe for white investment. It still doesn't make any sense to build a city there, but if they can get the casinos on dry land for safety's sake, they can no doubt find developers for all of the land that will be sucked away from its previous owners in a slithering display of emminent domain and manifest destiny.

The worst of Katrina maybe isn't over. There will be little preparation for the next big storm. It could flood all over again very easily.

There's opportunity in disaster, but not always for the victims. When and if New Orleans comes back, it will definitely be a new and different place. I expect the eventual Disneyfication of Mardi Gras.

[pophead2k]

Rumours persist that the levies were blown. It's possible, but in any case, they were left to deteriorate when they should have been built up. A Katrina-like disaster was predicted many years before it happened. The priorities were not there in the first place for New Oleans, because no one really gives a shit about a city built below sea-level at the mouth of a long and sloppy river. The town was populated by mostly by poor folks, which reads "black", especially in the South. Many of those folks are just not coming back, and in the end it won't be them making the decisions about what happens to their property.

So, now it's ripe for white investment. It still doesn't make any sense to build a city there, but if they can get the casinos on dry land for safety's sake, they can no doubt find developers for all of the land that will be sucked away from its previous owners in a slithering display of emminent domain and manifest destiny.

The worst of Katrina maybe isn't over. There will be little preparation for the next big storm. It could flood all over again very easily.

There's opportunity in disaster, but not always for the victims. When and if New Orleans comes back, it will definitely be a new and different place. I expect the eventual Disneyfication of Mardi Gras.

I certainly appreciate everyone's opinion on this matter, but there are a lot of folks in the media who are opining about the situation in New Orleans who know nothing about what life was like there before, and who know nothing about what life is like there now. You cannot simply look at lists of demographics and interpret New Orleans. Was the city poor? Yes. Was it majority black? Yes. But here's a news flash: white and black neighborhoods were destroyed. As a percentage, more whites died than blacks. Wealthy black homeowners were just as affected as wealthy white home owners. Etc. etc. etc. This topic cannot be simplified in the ways that most writers are attempting to.

A couple of minor notes, Rope:
- New Orleans has only 3 casinos, two of which are relatively small-fry operations. It had one major casino, which was in a relatively unaffected part of the city. Casino politics ceased being any kind of major issue in New Orleans 5 years ago.
- The levies were not left to deteriorate; they have protected us before. In fact, they were built poorly to begin with in terms of matching the magnitude of storm that Katrina eventually was.

Having spent some time in New Orleans recently and having friends who are still 'on the ground' there, the grim forecasts for the city are off mark. There are many, many New Orleanians of varying ages, races, and orientations who are back, trying to resurrect their neighborhoods and more importantly, the positive aspects of New Orleans, way of life. Disneyification? That was already done on Bourbon Street 20 years ago. Will the wealthy be able to invest and then rent to the less wealthy? Of course! Hasn't that always been the case?

New Orleans will be many, many years in recovery. No one knows if it will ever be the 'same'. All I know is that even if New Orleans never regains the prominence or total population it once boasted, I won't care. It is the unique way of life, the unique way of looking at life, and the amazing character of the people in the city that must (and will) return. Don't fret for New Orleans folks, those of us who love her are taking care of their own.

[A rope leash]

Instead of rebuilding these folks' homes and getting them back in there and restoring their culture, we will offer them a pittance for their property and rebuild it ourselves, and sell it at a price they couldn't possibly afford. I'm not worried about New Orleans coming back, because something is always going to grow down there. The salivation has already begun on the profits to be made.

The levies were scheduled to be built up and reinforced, but the money was always held up. When I'm talking casinos, I'm talking all of Louisiana and the Gulf Coast. Maybe I'm full of shit when it comes to talking about your town but you know it won't be rebuilt the way it was, and I know you're okay with that because that's just the way it is. Fine.

I hold no hard feelings, as you are as right as rain. I'm really sick of blogging, I have no reason to come back here, I just do. What I said about New Orleans was not intended to be any sort of insult, it's just my point of view from where I am and from what I've studied. Every other human sees it at least slightly different. Is this not the crux of human relationships and conflict? Everyone is unique, and I thought about just letting this go because I don't relly care what pophead thinks and I don't know if he is right or if I am right. I'm just rattling on, and some will take it seriously. But, I'm not serious. When St. Louis is destroyed by an earthquake, it won't be rebuit the way it was, either. You know what I mean, and I'm just saying...

[miss buenos aires]

Pophead, I agree with your points, I'm just curious: what do you mean when you say, "As a percentage, more whites died than blacks."? As a percentage of what?

[pophead2k]

MBA- as a percentage of the total population of New Orleans, whites were overrepresented in the casualties. But who cares, because a human life is a human life. The fact that anyone died is a tragedy. Its just that the media makes it seem as though only poor black people died.

ARL - I had no problem with anything you posted! As I stated, I was referring to the media- the article posted originally by JF- when I said that those who were not from NO didn't know about NO. The points you made were not taken as any sort of insult, and I enjoy your perpsective.

You are correct when you say that the rumor of the levies being blown is still making the rounds- it most certainly is. My problem with the rumor is that two of the major parts of town that were completely destroyed by failing levies (Lakefront and St. Bernard) were almost completely inhabited by middle to upper middle class white people. The basis of the rumor is that black neighborhoods were sacrificed to save white neighborhoods. This fact makes such a rumor basically groundless. There is no question that in terms of total population the 9th Ward was hit the worst, and this is a black neighborhood. Still, the misery was apportioned fairly equally across the city. Unlike the general population, Katrina was no racist.

I'd be happy to correspond with anyone who is interested in what is happening in New Orleans. Obviously my perspective is just my opinion. Just because I lived there, I certainly do not consider myself an expert on the current situation- I feel that I just have a different perspective.

And, once again, I want to thank all of you who have been so incredibly supportive with your words of encouragement. When I was in NO last week, I was able to share with so many people the magnitude of the empathy and support I received with people from this forum.

[alexv]

Pophead, as someone who knows very little about NO, I find your posts about your hometown, and particularly the ones on this thread to be incredibly useful and informative. Keep them coming.

[pophead2k]

Thanks to you Alex, and also to Mr. A.

[Copenhagen Fan]

Good discussion regarding New Orleans. Strangly, I was there just 7 days before the big one hit. Some of the things I love about New Orleans:

The widespread sceptisim regarding the Government

The perpetuation of big time conspiracy theories that permiate almost everything in the City

The mix of poor, wealthy, black and white...all seemingly with a modium of respect and understanding for each other, although not perfect

The openess and willingness to talk........about everything

Good grub and music everywhere

Swamp Punks - some weird fashion thing I noticed, where you tatoo your body and fuck it up for life while living only in the now

Frenchman St.

I hope it all works out

[Extreme Honey]

It's a shame that one of the only cities in the US with a great history and respectable culture has been washed away and left to rot.

[bambooneedle]

It's a shame that one of the only cities in the US with a great history and respectable culture has been washed away and left to rot.

Really? What are the other ones? Which are the worst?

[Extreme Honey]

Basicallt the rest (except Washington). Starting with: Cinninati, Boston, Seattle, and Detroit. Do I ever hate Detroit.

[migdd]

give 'em enough rope. . .

[pophead2k]

Well EH, I will definitely agree that New Orleans had a fairly unique culture amongst American cities, and obviously I was partial to it. Still, there is no denying it had some very profound problems as well. For instance, nothing SHORT of Katrina had a chance of fixing the public school system. I had stated many times prior to Katrina that the only thing that would help that organization was to be able to start completely over. Still, one of the joys I have experienced during my enforced nomadic existence has been to discover the unique things about many US cities I hadn't had the opportunity to discover before. Every place has its ups and downs, but if you dig enough, I've found that you can find amazing pockets of culture everywhere in this world, no matter how many strip malls are present.

[bambooneedle]

EH Kerouak...

[verbal gymnastics]

Pophead, as someone who knows very little about NO, I find your posts about your hometown, and particularly the ones on this thread to be incredibly useful and informative. Keep them coming.

And as someone who knows even less, I wholeheartedly agree. I can't even begin to comprehend what is happening over there and how it is affecting you (both individually and as a community).

[alexv]

EH, I'm not sure I understand your answer to Bamboo. You list Detroit and Seattle side by side. Not sure I ever could see a reason why those two completely different cities would be grouped. What are you saying about the cities you grouped?

[Mr. Average]

Both city names have at least one "e" and one "t". C'mon, Alex, can the link be any more obvious.

And the Detroit Smoked Salmon is to die for.

literally.

[Extreme Honey]

EH, I'm not sure I understand your answer to Bamboo. You list Detroit and Seattle side by side. Not sure I ever could see a reason why those two completely different cities would be grouped. What are you saying about the cities you grouped?

They're both cities I deem pretty crappy.

[Copenhagen Fan]

I liked living in San Francisco...kinda like living in New Orleans without the heat and not as grubby.

[Extreme Honey]

I liked living in San Francisco...kinda like living in New Orleans without the heat and not as grubby.

Don't forget to add a sprinkle of queer!

[BlueChair]

I've not been to Seattle, but I hear it's a great city - very clean, friendly, and intelligent people.

[Copenhagen Fan]

I liked living in San Francisco...kinda like living in New Orleans without the heat and not as grubby.

Don't forget to add a sprinkle of queer!

There's also plenty of Queer in N'awlins! I hate any city without a considerable gay population. A city without glory holes is merely a provincial pit of hell.

[bambooneedle]

The trannies in Sydney look smashing Cope!

[Extreme Honey]

I liked living in San Francisco...kinda like living in New Orleans without the heat and not as grubby.

Don't forget to add a sprinkle of queer!

There's also plenty of Queer in N'awlins! I hate any city without a considerable gay population. A city without glory holes is merely a provincial pit of hell.

What exactly are you trying to say?