Balkinization: A View from New Orleans

A View from New Orleans

Anonymous

You may have heard that William Jefferson, the U.S. House member who represents New Orleans and parts of neighboring Jefferson Parish, won re-election over Karen Carter, a state senator. People outside the state are puzzled, as they were last summer when New Orleans mayor Ray Nagin was reelected. People inside the state are not. The factors that explained Nagin’s victory also help explain Jefferson’s. Jefferson won, despite being under a federal investigation for bribery, because you can’t beat a vulnerable incumbent with a candidate who refuses to take strong positions on issues and who tries to straddle the deep racial divide in New Orleans. In other words, you can’t beat someone with no one. Both Nagin and Jefferson benefited from the belief of African-Americans that the federal government has betrayed them. Then again, versions of this belief are pretty widespread in New Orleans no matter what your race or ethnicity. Here’s one view from New Orleans that is pretty typical of regional sentiment. This was a recent editorial in our local paper, The Times-Picayune, by Bob Marshall, one of the paper’s editors. I don’t agree with every point, but I think it’s useful for people outside the region to understand the attitudes inside.

“[R]ecent travels had already shown me that most Americans are woefully ignorant of the ugly facts on the ground here in The Big Uneasy. My concern now is that as my fellow New Orleanians hit the road during the busy holiday travel season they may be stunned into silence – if not apoplexy – by the questions and statements of the misinformed masses. So here’s a package of talking points.

Isn’t flooding what you should expect when living in a hurricane zone? The flooding inside the city limits was not a natural disaster, but a man-made disaster. The hurricane protection system built by the U.S. Army Corps of Engineers was poorly designed, constructed and maintained by that agency, a part of our national government. The system was never built as high as we were told, and it failed due to faulty engineering. Katrina’s storm tides didn’t come close to reaching the tops of the walls, and never would have. This is not my opinion. This was the judgment of the corps after its year-long $10 million in-house investigation. The corps said ‘our fault’ – yet Congress has not responded to that confession.

Didn’t Congress agree to pay for the damage? Only a small portion of it. The corps’ failures resulted in the destruction of 200,000 home and businesses at values estimated to surpass $100 billion, yet Congress has appropriated only about $10 billion to rebuild homes.

Well, is it our fault they didn’t have any insurance – or enough insurance? That’s like saying a man killed by robbers was at fault for not wearing a bullet-proof vest. You’re blaming the victims. Insurance is for natural disasters, acts of God and self-inflicted damage such as fires. This is not a no-fault case. The corps – part of the U.S. government – has already accepted it was at fault. Fairness means the nation should pay for completely rebuilding those homes. Insurance shouldn’t be a consideration. That’s what the nation has always done in the past.

When? [Examples cited include the savings and loan disaster and 9/11.]

What about federal flood insurance? We subsidize that to the tune of billions. Why should we do that in a hurricane zone? You’re right. The nation shouldn’t subsidize environmentally stupid development. But if we’re going to start that policy, we must inaugurate it simultaneously coast-to-coast. So when we yank flood insurance from south Louisiana, we also will stop it for Miami, Tampa, St. Petersburg, Jacksonville, Washington, D.C., and New York City, not to mention Houston, Gulfport and the rest of the Gulf. And while we’re at it, we will stop paying for earthquakes in San Francisco, Los Angeles, Salt Lake City, Seattle and Alaska.

What about this Road Home Program? I see people getting money to rebuild. I’ve seen your politicians thank Congress. They have been groveling for crumbs – and that has hurt us more than helped us. Here’s an example that is typical. I have a friend who owned a $200,000 home in Lakeview [one of the most flooded areas]. He had $14,000 left on his mortgage, and only $40,000 of flood insurance because it had never flooded. He might end up with $100,000 from Road Home. So he pays off his old mortgage and spends another $15,000 having his home torn down. But the builder says it will cost $325,000 to rebuild the same size house. So, at 55, he will have a $250,000, 30-year mortgage. He may never be able to retire. He’s left in this situation after the richest nation in the world admitted it destroyed his home – but refuses to pay for the damage. And he’s lucky. There are many retired people who can’t get the $300,000 mortgage to rebuild their homes destroyed by an agency of the government. They’ll spend their remaining days in small FEMA trailers.

Why isn’t anyone telling us this? They have. But you haven’t cared enough to pressure Congress to do the right thing. That’s why I call this one of the most shameful episodes in American history.”

Posted 10:34 PM by Anonymous [link]

Comments:

Okay, I am woefully ignorant on the subject, but I thought "one" of the big problems was that the Core allowed local politicians to decide how/where the money for the hurricane protection would be spent. The local politicians mostly used to provide lucrative contracts, and didn't accomplish what they were supposed to with the money. Wasn't that one of the big problems? Once again, I haven't followed it. I'd more than appreciate links to reputable sources that disprove what I am saying.

# posted by

humblelawstudent : 10:58 PM

I went to Tulane (and, apropos of nothing, had Prof. Griffin for Con Law) and, I have followed this story with a passing interest, and I remember watching "Meet the Press" where your point -- that the money was largely misappropriated, misspent, or otherwise mismanaged -- was presented as the case.

Anyways, the upshot is that if this is the case most people would not, I think, take such a charitable view of the plight of New Orleanians as the (self-interested?) Picayune columnist. Moreover, New Orleans'(and La.'s) reputation for being corrupt is certainly not helped much by Jefferson (who, incidentally, the CBC went to bat for, which i find putrid), thereby giving the mismaagement of fed money theory more heft, if only anecdotally. Finally, it's "Corps" not "Core".

# posted by

Anonymous : 11:36 PM

i too went to tulane, but prior to prof. griffin. i then remained in the new orleans area for several yers after graduation. i have posted on this space before on this subject, but in light of this post, feel the need to do so again.

yes, the federal government has done little to nothing, other than window dressing and photo ops, to help. it seems to me, however, that the local politicians and community leaders have also done next to nothing. i have been to the gulf region three times since katrina, the most recent being this past june. at that time, i posted in this space my belief that nothing will turn around in new orleans until somebody takes the bull by the horns and begins a high profile project that the business community, the politicians and the general community rallies around. that project, simply put, is rebuilding and opening up the convention center.

new orleans is a city that survives on tourism and conventions. the business community has always loved going to new orleans for conventions, seminars, etc. without the convention center, however, the city is absolutely crippled in hosting such events. once work begins in earnest on opening the convention center, the effect ripples outward as surrounding hotels, restaurants and businesses open to accomodate attendees. the economic impact should then spread throughout the city.

when we were in new orleans in june, it did not appear that the work on repairing and opening the convention center had even started. i have spoken to several people around the country since who have told me that they have been to conventions in new orleans in the past, but that they and their organizations would not do so until the city was ready to host them again. they all told me that the city is not ready at this time. i personally have attended various legal seminars hosted in new orleans in the past, but have yet to see any such seminars posted by lexis, mealey's, etc. since then. i can only assume that it is because the city is not ready to host again.

yes, the federal government has let you down (again). yes, the insurance companies seem to be fighting harder to find ways to avoid paying out claims than in helping residents. but by the same token, i have yet to see any local politician, business or community leader become that shining beacon that begins the process of leading the city back.

my wife and i are tentatively planning a return trip to new orleans in march. we shall report again at that time.

# posted by

phg : 7:56 AM

apropos of this post, you may wish to take a look at bob herbert's op-ed piece in today's new york times.

# posted by

phg : 8:03 AM

Slightly off-topic: As readers of this blog probably know, the state of the criminal justice system in New Orleans is frightening, in large part because of the lack of defense counsel after the hurricane. Do Not Pass Geaux has a great story today on law students from around the country going to NOLA this winter break to do prep work on these cases. These students should be applauded and supported.

Speaking of, the students could certainly use donations to defray travel and per diem expenses. Remember to make your year-end contributions!

Disclosure - I have nothing to do with the DNPG blog or the Student Hurricane Network, although I do have a soft spot in my heart for NOLA, having lived there for six years.

# posted by

rothmatisseko : 1:46 PM

Why is our government subsidizing bad economic behavior?

Insurance companies, of course, won't underwrite risks that exceed the risks of normal and expected hazards, so why is our government doing what no private insurer would consider doing?

If I chose to build a house atop the earthquake fault that has more than several times erupted and destroyed all the building on or nearby the San Andreas fault, and yet another earthquake happens along the fault, and destroys property again as it has in the past, I don't think I would build on the San Andreas fault, unless I was insured against earthquake hazards.

NO insurance company now will underwrite insurance for ANY property built atop the San Andreas fault, for the very simple reason that the financial liability of such risky behavior cannot be captured by any amount of insurance premium. Even the State of California cannot extort enough premiums to manage its risks in the event of yet another earthquake on this very notorious fault, so if someone wants insurance, they can pay enormous premiums, but the State caps its liability in toto at $5k. $5k could not even remove the debris of a property damaged by a "normal" earthquake. So who in their right mind would choose to build atop the fault a million-dollar home that could be flattened in a 30 second trembler, that only $5k is the remedy for the subsequent disaster? The answer is plainly obvious: NO ONE.

For sixty-plus years people have been building property in "flood zones" right along the Mississippi River, and that River has time and time again flooded and destroyed the property that anyone financially averse to disaster would never have built in the first place. But the government has "flood insurance," because no private insurer would be stupid enough to insure a flood zone after multiple floods and catastrophic disasters. And flood after flood, the government bails out the flood victim with taxpayer monies, because NO amount of private flood insurance could recapture the losses that massive floods, year in and year out, exact from building homes in a notorious flood zone.

So take the "flood" problem and connect it with the "earthquake" problem, of which NO private insurer would consider insuring, because NO premium could cover its losses in the event of an "ordinary" disaster, much less disaster after disaster. At least the State of California limits its total liability to a paltry $5K in exchange for a prohibitively expensive premium, that even if a person chose to insure herself against would not pay the bulldozers pushing the debris to one side or the other, as no amount of money makes these liabilities "insurable" to even the most profligage premium payer.

Fear not, you stupid people who behave economically stupidly, the government is here to help in those cases where you did the economically stupid behavior that no one else will insure, but your government will insure you against losses that no other insurer will insure against, because it's too expensive to recoop the loses.

Unlike insurance, your friendly government does not need premiums to cover all your losses, your government has the power to tax those other folk who did not and would not act so stupidly, but because the power of taxation allows the government to reward stupid economic behavior, and because governments' deep pockets are only limited by what government can tax everyone else for your less-than-smart economic behavior, the government will rebuild all your homes and property again right back where the floods and earthquakes destroyed them, but because of taxpayer subsidies of bad economic behavior, no one need know that the rebuild in the same hazardous zone can once again be "covered" if another disaster strikes your property that should have never been built in this hazardous zone, but our "insurance" (which really is not insurance at all), can tap the taxpayers again and again for all hazards for the fact that you and your associates acted in a bad economic decision. But fret not, we can tax everyone to find the funds to rebuild your poor choice of economic behavior, and you get to do it again (and again, as long as no one catches on) to the fact that we just tax and tax those "economically-smart" people whose hazards are not so hazardous as your reckless hazards, and you can rebuild your properties over and over, because the hazards are all paid by taxes, not premiums (who could afford those premiums, anyway?).

Yes, your munificent government did encounter a minor problem with New Orleans and Katrina, but only because the whole city is below the level of the Mississippi River, which we paid the Army Corps of Engineers to build higher and higher leveess, so that this River would not inundate the whole city in case a levee broke or else a hurricane created a "breech" in the Wall that keeps the River above the City from flooding the entire city with water, but that plan failed, and so the water immersed the City with the River and a nearby Lake, so that it flooded every resident (yes, some were floating in the newly-created lake-bowl that was not supposed to happen, because your government builds levees to keep this River from inundating your City, as so we failed, and people scrambled for higher ground, of which there was none, becuase we have "flood" insurance to help those whose property and homes are flooded), and so your great and wonderful government cannot afford to reimburse New Orleans for all the flood victims and flooded property, because we don't know how to rescue those flood victims who actually floated in water too high for "flood insurance" to keep out of the flood zone that we insured you against) but at least the Ninth Ward (or those still alive) found the Superdome, for your government to come to your rescue and take you out of more flood zones than we had a clue that could flood could havoc.

But rest assured, your government will still write flood insurance if you choose to rebuild in New Orleans (if you don't like our trailer houses that seem just a little out of reach to the average flood victim), but the French Quarter is earmarked for flood recovery (what you do with the floating dead, we cannot advise you, except take out more flood insurance, which we still offer those who build in flood zones, if they're around to inact the insurance, after returning to the flood zone and demolishing the flood-damaged property, that your flood insurance your government usually would cover, but your governments' liability is higher than any of us thought could be a factor for those who survived the flood and the Superdome).

Your government, under the aegeis of President Bush, insists that flood insurance still avails for those trailers we bought and placed around some place in LA, so if you find these trailers, find a key that opens them, please rest assured that the next flood is covered by the governments' flood insurance, and if the trailer floats into the Gulf of Mexico before anyone can get out of these wonderful "second homes," your government will insure your next home too against the next flood that invades the Gulf Coast, provided, of course, we can rescue the flood victims before they are washed out into the Gulf or are sunk in the Mississippi River.

"Fear not," your compassionately conservative government is here to help when disaster next strikes those who live in flood zones, but may we suggest you increase your flood insurance liability limits to include a "private" response team just in case your FEMA and your government cannot reach you before you and your family are washed out to the Gulf of Mexico, or your trailer home is just all washed up in some place where none of us have figured exactly where and who is using these wonderful "homes away from homes," but your government still insures you against floods that occur in flood zones, but maybe not quite in a flood bowl the inverse of which is the Superbowl, a feature we still have not quite figured out why it was the only place where you folk thought you could find safety, water, food, toilets, and -- well, less flood water. But as your President, let me congratulate Americans for their ingenuity and ability to come together even when the Saints are not playing a game in the Superdome. It's a testimony to our people's ability to face the direst circumstances and show that we are a great nation under god, which proves, as I've always suggested, that privatizing social security is just what this country needs most when the chips are down and the water is up to our rooftops.

I'm so proud of my Administration in this situation that helped so many people find new parts of the nation to explore and live-in, and rest assured your country still offers flood insurance just in case this kind of problem should ever resurface. May god bless America and all those who have watered the storm of Noah and his two-of-a-kind in the Ark of Armageddon that we all know is coming. Praise Jesus! Once again the Lord showed me the truth, and I followed it. We've all been baptized in the water and the spirit. Those dislocated and looking for new opportunities, our armed forces need more good people to help us out in Iraq. Like Katrina, I assure you we'll stay the course. I'm make the decisions. I'm convinced that we're on the way to the promised land, and those nayaayers won't distract us from our destiny.

Barney and Laura and I send you our best Christmas wishes to have a holy day. Your Leader. GWB.

# posted by

Anonymous : 12:50 AM

RE: phg--
From the Official Site of Greater New Orleans: "Ernest N. Morial Convention Center, which partially reopened in February 2006, is now fully operational, having opened the remainder of its upgraded facilities in late November, as the Center hosted the International Work Boat Show. Renovations to the Center are estimated at $60 to $67 million. The Center currently has 250 full-time employees."

# posted by

Anonymous : 11:33 AM