Affordable Housing Institute : US

There are times to be reflective, and there are times to be decisive.  Reinventing New Orleans is a time to be decisive, because markets and people are moving, and now, nearly two months after Hurricane Katrina destroyed Old New Orleans, every day that passes lacking a plan makes it that much harder to create a plan.

 

 

“I’m just following the guidance from above.”

 

Unfortunately, if this Los Angeles Times story is in any way reflective of reality, so far there is nothing resembling a plan:

 

WASHINGTON — Almost two months after Hurricane Katrina slammed into the Gulf Coast and a month after promising in a nationally televised speech to help rebuild the region “quickly,” President Bush has settled on a cautious, piecemeal approach that even many members of his own party fear will stall reconstruction and sow economic disarray.

 

When I comes to making big decisions, go slow is no go.

Bush has made highly publicized trips to Louisiana and Mississippi on average of once a week since the storm, but the administration has yet to introduce legislation for two of the three proposals the president highlighted during his September speech from New Orleans.

 

Despite mounting evidence that Washington is having trouble putting to use most of the $62 billion in emergency funds approved by Congress so far, the president has resisted appointing a recovery coordinator or further detailing his vision of how to tackle rebuilding. In interviews last week, he explained that he wanted state and local officials to act first.

 

“I recognize there’s an attitude in Washington that says, ‘We know better than the local people.’ That’s just not the attitude I have,” Bush told NBC’s “Today” show.

 

Ideally, a comprehensive plan for New New Orleans would originate in Louisiana, but there’s a reason very large-scale projects (like the interstate highway system) are Federal, not state.  Some decisions — like how multiple billions will be spent — are intrinsically federal in nature.  Because they are the big, bedrock decisions, smaller decisions more appropriately left to state or local authorities cannot be taken until the biggest decisions are taken first.

 

 

This network wasn’t built by individual states acting in isolation, it was a national strategic priority.

 

In addition, the scale and complexity of reconstruction pose special challenges for an administration that firmly favors market mechanisms over government action, at least domestically.

With the immediate crisis past, administration officials may be hoping that state and local efforts — and the free market — will relieve them of the thorniest decisions, as well as a substantial chunk of the estimated $200-billion price tag for the region’s revival.

 

Whoever acts like a leader invites being stuck with the check — but the Federal government is already going to be stuck with the big check, indeed it has fallen all over itself to volunteer to be stuck with the check.  And a healthy Port of New Orleans is clearly in the national interest, requiring infrastructural rebuilding will cost sums that dwarf Louisiana‘s funding capacity:

“With all due respect to the president, things are not going to bubble up from the bottom,” said Jack Kemp, who was Housing and Urban Development secretary under President George H.W. Bush. “There has to be some federal leadership here.”

Without clear signals from Washington, some reconstruction decisions are essentially being made on autopilot, raising the risk that the region and the nation will repeat past mistakes.

 

“Nothing to worry about, we’re on autopilot!”

In New Orleans, for example, the Army Corps of Engineers last week put an estimated $400 million of work out to bid to bring the area’s levee and canal system back to its pre-Katrina condition. Corps officials said the work was necessary to secure the city while more extensive protections were designed.

The corps’ plans include reviving a large, and largely unused, canal known as “Mr. Go” — the Mississippi River-Gulf Outlet — that environmentalists and many local officials say funneled storm surge from Katrina into neighborhoods, increasing rather than reducing the devastation.

“The White House has studiously avoided making any choices about what should be rebuilt, and the corps has taken that to mean rebuild everything,” said David R. Conrad, a senior water resources specialist with the National Wildlife Federation and a veteran corps watcher.

 

We cannot rebuild everything, and we should not rebuild everything.  We should reinvent the city. 

 

With all the reinvention desirable for New Orleans, the Administration is rightly eager to reinvent the business of resource delivery:

 Aides said officials were working behind the scenes to ensure that all of the proposals unveiled by the president in his New Orleans speech became law. (In addition to the worker accounts, Bush called for a Gulf Opportunity Zone, or GO Zone, that would provide tax breaks and loans to small businesses, as well as an Urban Homesteading Act that would give low-income families surplus government property and favorable mortgage rates in exchange for the promise to build homes.)

Meanwhile, administration budget officials are preparing another emergency spending bill — this time for about $20 billion, much of it for such clearly defined projects as rebuilding military bases and a NASA facility. The aides said that Bush had not ruled out proposing a reconstruction “czar” or coordinator, though such a post could not “compete with state and local decision-makers.”

Faster, please.

 

But if administration work on reconstruction is proceeding, it seems not to be occurring with anything like the urgency and decisiveness that Bush suggested it would when he stood before the cameras in a darkened and largely deserted New Orleans for his Sept. 15 address.

Then, he pledged: “We will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives.”

He promised “one of the largest reconstruction efforts the world has ever seen” and said: “Our goal is to get the work done quickly.”

 

That means leadership.  Leadership is action, not talk.

The president’s shift from such bold rhetoric toward talk about the limits of federal involvement and the need for local and private-sector leadership is at least partly traceable to an unexpected revolt by congressional conservatives recently.

Led by the 100-plus members of the House Republican Study Committee, conservatives have insisted that any new spending for Katrina be offset by fresh budget cuts. Their suggestions include killing politically favored highway projects and delaying Bush’s signature Medicare prescription drug benefit.

 

“To spend here, cut there” is a political equation all elected officials understand and all fear.  Even worse is turning over the process to those whose posture is cut first, save second, spend a distant third.

 

 

Which of these people looks like the OMB director?

 

Bush aides dispatched Budget Director Joshua B. Bolten to strike a deal that included an administration promise to seek offsets for most new spending. That has given the White House Office of Management and Budget power to shape rebuilding that it did not have in the early going.

 

Visionaries become developers; skeptics become economists.  This is a recipe for cautious passivity:

“It’s put OMB in the driver’s seat, and OMB is running a budget process, not trying to come up with a unified response to a national crisis,” said one senior House Appropriations Committee staff member, who like most Capitol Hill staffers asked not to be identified.

 

A wise move, anonymous staffer, since those who publicly oppose OMB get their funding slashed at midnight.

By wiping out whole communities, Katrina created problems that even some Republicans argue cannot be handled by individuals and market mechanisms alone.

“Where once you had an operating society, now there’s nothing — no fire truck, no school, no grocery store to buy a loaf of bread,” said Rep. Richard H. Baker (R-La.).

 

Leadership is often simply no more than confidently saying, “Follow me!” and setting off confidently. 

 

 

It helps to be as handsome as I am.

 

Congressman Baker, who is no spendthrift, is trying to lead:

Last week, he proposed that Washington create a Louisiana Recovery Corp. aimed at making commitments to rebuild whole communities at once, so that residents have the assurances they need to invest there. The corporation would be able to borrow from the government and financial markets, buy up ruined areas and hire developers to rebuild them. Homeowners and local businesses could sell their storm-damaged properties to the firm or reserve spots in the rebuilt communities. If they refused to do either, the corporation could take the properties by eminent domain.

 

The recent Kelo case notwithstanding, the case for wholesale urban redevelopment eminent domain is overwhelming: if being under water and mold-assaulted isn’t blight, what is?

White House officials have offered only a polite nod to the Baker plan.

 

The administration has “bought into the idea this should be a bottom-up thing,” New Hampshire Senator Judd Gregg said. “The danger is confusion, inefficiency and huge bureaucratic frustration.”

 

In a catastrophe, one cannot have the perfect world: federal funding plus local control.  You can have one or the other.  Not both.

 

Lawmakers lauded Bush’s call for states and localities to decide their own futures, but they said they feared it would be an excuse for Washington to retreat from the region.

“It’s not an either-or thing,” said Rep. Bobby Jindal (R-La.). “You can be for local decision-making and for a federal effort that cut across the usual bureaucratic lines.”

 

It may not be either-or in theory, but here in practice, it is.  It’s past the time to choose.

 
“The president put out some very large ideas, but the administration isn’t leading on them in any very public way,” said Stuart M. Butler, vice president of domestic and economic policy at the conservative Heritage Foundation think tank. “There’s been a general hands-off approach, which is disturbing.”

Kemp, the former HUD secretary, agreed.

“Laissez-faire, Darwinian capitalism is not going to work here,” Kemp said. “Markets do work, but they need the direction of government in situations like this.”

 

Absolutely right.  Not to decide is to decide … and while politicians weigh the political calculus, markets are moving … away from the optimistic vision of New New Orleans, and toward the pessimistic.

 

We need strong Federal action, and we need it now.

[Previous posts on New Orleans here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.]