Will New Orleans swing again?

By Markets Editor Andrew Van Sickle Sep 06, 2006

Andrew Van Sickle

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One year after Hurricane Katrina drowned New Orleans, the city and the US government are struggling to recover from its effects. Katrina exposed “glaring weaknesses” in the US – from black urban poverty to slapdash disaster management – says the FT. “If the city government’s failure to help people escape was shameful, the federal government’s willingness to leave them there for days was scandalous.”

The government did grant $110bn of federal aid for relief and rebuilding, but so far the results have been patchy. The French quarter has benefited, but half the original population of 460,000 has yet to return and many neighbourhoods are still in ruins, so “the city’s future is far from secure”.

Residents are still “one storm away from a repeat of the 2005 disaster”, says Florida’s Bradenton Herald: the levees have been rebuilt, but only to pre-Katrina standards. Money has been set aside to bolster the city’s defences, but plans are not finalised.

Within the city, there is a sense that “progress has ground to a halt”, says The New York Times. No wonder: just $44bn of the $110bn aid package has been handed out, the bulk of it immediately after the flood. The “Katrina czar” should concentrate on repairs to utility networks, focus the limited resources for rebuilding on safer areas and give the bureaucrats a kick up the backside: “even well-staffed bureaucracies respond only when force is applied”. Otherwise people will hardly be tempted to return. 

The disapproval shown by Americans for Bush’s inadequate reaction to the disaster has hardened, says The Economist. His approval ratings, around 45%-50% before Katrina, are stuck in the high 30s; enough to survive, but nowhere near good enough to attempt the major projects (such as privatising Social Security) envisaged before the hurricane. In November’s mid-term elections, the Republicans will be lucky to hang on to their majorities in the two houses of Congress.

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