Two Years Later

I didn't watch last night's cable news programs on the two-year anniversary of Hurricane Katrina, largely because the media template was established well in advance.

Let me see if I've got it right: two years after the storm, many residents are still hurting, particularly in New Orleans. Large sections of the city remain a wasteland; thousands are living in FEMA trailers and many more have fled to other locations, vowing to never return. Among those who still have a home, many are embroiled in lawsuits with insurance companies, which have refused to pay damage claims. Others are haunted by memories of the storm, and fears that another major hurricane will strike the region soon.

My "summary" is not intended to belittle the suffering of those who experienced Katrina. As I've written before, the storm (and its aftermath) represent a personal tragedy for my family. The hurricane destroyed our oldest daughter's home in coastal Mississippi. The subsequent strain of recovery and relocation eventually resulted in a divorce, with the corresponding, psychological impact on my daughter, her child, and her former spouse. I genuinely understand what the storm victims experienced, and what they continue to endure.

But, as Larry Kudlow points out in a column at RealClearPolitics, there is an unreported story from Hurricane Katrina that cuts to the heart of the recovery effort. How much, he asks, has the federal government spent on New Orleans and the Gulf Region since the storm?

The total (so far) is $127 billion, including tax relief. Put another way, the federal largess is enough to write a $425,000 check for the 300,000 people left in New Orleans. Perhaps, as Mr. Kudlow suggests, we'd be better off in using that approach. A White House "fact sheet" details $50 billion spent for rebuilding schools, levees and other infrastructure; that total also includes $16.7 billion for housing recovery.

What happened to the rest of that money? Your guess is as good as mine.

And what the taxpayers--and residents--getting in return? Conditions in parts of New Orleans remain grim; despite a significant drop in population, the city has become America's murder capital. The homicide rate is 40% higher than before Katrina, and twice as high as cities like Newark, Detroit and Washington, D.C.

So what's the solution? Why more government money, of course. With the presidential election barely a year away, politicians are falling over each other, vowing not to "fail" New Orleans again.

Clearly, the seeds of disaster in New Orleans were sown long before Katrina churned ashore and the levees broke. Decades of corruption, failed leadership, bureaucratic inefficiency and wasted spending created a city that was unprepared for a catastrophic--though long-expected--natural disaster. Now, the same failed system, led by many of the same inept politicians, is supposed to rebuild the Gulf South.

As Mr. Kudlow observes, the region needs a plan built around free market solutions, not endless government spending. And we've seen that, to a degree, in neighboring Mississippi. Just days after the storm, the State Legislature met in emergency session, and approved the relocation of dock-side casinos to dry land. Republican Governor Haley Barbour and the Democratic-controlled legislature understood that the casinos were--and are--the economic engine that drives the coastal economy in Biloxi, Gulfport, and surrounding communities.

Moving the casinos ashore not only offered greater protection against future storms, it also primed the region's economic pump. The relocation process created thousands of construction jobs, boosted local spending, and allowed the casinos to reopen in a matter of months. That allowed employees to regain their jobs (stimulating more economic activity), and the return of gamblers to the coast. Gaming revenue is now at an all-time high in Biloxi.

Admittedly, legalized gambling has its own downside, and many in Mississippi would have preferred that the casinos never return. And, there are many residents in the state's coastal counties who are still struggling. But two years later, Mississippi is much further along in the rebuilding process, not because of politics, but because state and local leaders understood the benefits of a market-based recovery model. Did that receive any play on the cable news channels last night? I rather doubt it. After all, it's much easier to show a victim in New Orleans who's still waiting for Uncle Sam to ride to the rescue; someone who's still hoping that some of that federal aid will somehow "trickle down."