Friday, February 17, 2006

New Orleans Failures

The current administration has failed at every effort it has made (except stealing another election).

The perpertrators of the crimes committed at the World Trade Center and Pentagon remain at large and there is no plan to find them.

There are no weapons of mass destruction in Iraq, but more than 2,200 American soldiers and tens of thousands Iraqi citizens have died.

The economy is at its worst point since the Daddy Bush administration.

The Bill of Rights has been gutted to ensure coroprate fundamentalism can control the nations resources.

We have alientated almost all of our allies.

We are the only Western democracy that intentionally kills its own citizens.

There is almost no access to health care, even for the insured middle class.

Social welfare has been gutted while corporate welfare has been bloated.

The education budget is slashed with the lie that education isn't working. Education worked fine until Reagan and other republicans began slashing the education budgets.

Democracy has diminished at home and we have failed to spread it anywhere.

The list goes on.

Now, having lost an entire city while he fiddled, the president is truly unable to fix or even make progress with New Orleans!
Blocking Progress In New Orleans
Robert Reich
February 16, 2006

Robert Reich is professor of public policy at the Richard and Rhoda Goldman School of Public Policy at the University of California, Berkeley. He was secertary of labor in the Clinton administration.

More than five months after Hurricane Katrina—and almost five months of political verbiage and posturing and name-calling and blame-mongering—New Orleans is still a wreck.

Two thirds of the Big Easy’s pre-Katrina residents continue to live in exile; only a handful of schools have reopened; only a third of the city’s former hospital beds are available; two-thirds of its buildings are still without electricity. Two hundred thousand homes and business properties are in ruins.

The next few months will be a turning point. Either there will be a raft of personal bankruptcies, foreclosures and bank failures, followed by the permanent closing of much the city, or—what? Free-market fundamentalists say New Orleans just has to wait until capital and people return. But it’s been five months and they haven’t returned. Why should they be expected to?

Yes, residents and businesses moved back to Chicago after the Great Chicago fire, and they moved back to San Francisco after the 1906 earthquake. But the citizens and merchants who had occupied these cities before the disasters had few alternatives afterwards. And most of the capital needed to rebuild these cities came from local investors who also had few alternatives but to put their savings back into the cities their savings had been in before.

Today it’s different. People can move far more easily. Former residents of New Orleans are now scattered across much of the United States. Former businesses are gone. Capital is now global.

New Orleans faces two chicken-and-egg problems that Chicago and San Francisco didn’t have to face, and private markets don’t know how to remedy. The first is how to get people to live in places where there are no jobs because there are no people living there. The second is how to get capital to rebuild damaged buildings in neighborhoods that are worthless because so many buildings are so badly damaged.

There’s no private market renewing New Orleans because nobody has an incentive to move back or reopen a business or invest, because no one can be sure there will be enough other people moving back, reopening and investing to make it worthwhile.

This is why an idea now being pushed by Republican Rep. Richard Baker, who represents Baton Rouge to the north of New Orleans, is so sensible. Baker wants to create something called the Louisiana Recovery Corporation. Essentially, it would buy property and mortgages at 60 percent of their pre-Katrina values, package them together in parcels that might be attractive to private developers, and then auction off the packages. The resulting revenues from developers would then replenish the fund.

The developers would have reason to rebuild their parcels and generate jobs because they’d own enough property to recreate small neighborhoods and shopping areas. In other words, they could overcome the chicken-and-egg problems.

The Bush administration opposes the Baker plan, maybe because it sounds too much like government meddling in the free market. Someone should tell the White House there’s no free market in much of New Orleans to meddle in.

This isn’t some left-wing wacko idea. Baker himself has 91 percent lifetime approval rating from the American Conservative Union. Yet even he knows where there’s no market, the only way you get one is if some government body creates it.

If America could rebuild Europe after the Second World War with the Marshall Plan, we can certainly rebuild New Orleans with a revolving loan fund that will probably end up paying for itself.

This commentary originally appeared on Marketplace, public radio's only daily business news program, and is reprinted via a special arrangement between and Robert Reich. Marketplace is produced by Minnesota Public Radio and is heard on 322 public radio stations nationwide. More online at

Now that the vice-president has shot a citizen, maybe the media will hold the administration to task for something . . . anything!

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