Thursday, September 22, 2005

Rebuilding New Orleans

Hurricane Katrina revealed much that is wrong with political government. Government was responsible for disaster preparation and response. Government failed. Not only did it fail, government hindered private charity. The politicians and bureaucrats had other priorities. This is not new. It’s been going on for generations. It’s the nature of political government.

Now we are expected to trust government to rebuild New Orleans. The federal government wants to spend over $100,000 for every man, woman and child that was living in New Orleans. By the time it’s paid off the expense would probably be more than $1,000 for every man, woman and child living in the US.

In contrast, I suggest that the best way to rebuild New Orleans would be to make it a tax-free (and government appropriation-free) zone. Business investment dollars would flock to New Orleans. Property that is now near worthless would become very valuable. The government would actually make money by selling government owned real estate, including the levees. Businesses and their insurance companies would have the means and the will to make sure that a privately owned and insured flood and hurricane mitigation infrastructure would protect them. New Orleans and Louisiana could be more prosperous and more secure than ever. New Orleans could become an economic giant.

This would be good for the people of New Orleans, good for the people of Louisiana, and good for the people of the US. It would be good for everybody except the politicians and bureaucrats, who would be embarrassed by their relative failure, which is why it will probably never happen.

You can build castles in your mind-jut make sure the foundations are in place first.
Donald Trump

The foundations of New Orleans is the levees. It is not safe to live there nor is it wise to invest there. We need a NEW levee, because you can't fix the old one. And beyond that a barrier island and a barrier reef. The reef protects the island and the island protects the levee. Then we can rebuild New Orleans and in about 10 or 20 years, we will forget what happened in 2005. Let's face it Katrina missed the city. What would have happened if the eye came in west of Kenner?

Marcus de la Houssaye
The "levees only" thought process is as old as the political process in Louisiana. I agree that making New Orleans a tax free zone is a good idea, but there are so many factors at work's not as simple as just making it a tax free zone, but it certainly is one of the better ideas I've heard.
A tax free New Orleans would make the foundations and levees, and all other things (simple and otherwise) the responsibility of those who are willing to live there unsubsidized by state and federal tax expenditures. Neither we nor any central planners should try to come up with all the answers. That should be up to the people wha are willing to live and invest there. One of the big problems with New Orleans (and Houston and Florida and pretty much all of coastal US) is that many more people live there than otherwise would if they were not somehow subsidized to do so (tax funded and government operated levee systems, federally guaranteed and subsidized flood insurance, government disaster bailouts, etc). Whenever we subsidize anything we invite and encourage more of the same. We absolutely must stop subsidizing unwise decisions. Subsequently, fewer people would live in disaster prone zones, disaster mitigation could be more reasonable and creative, and the human disasters that are caused by government action (and inaction)could be eliminated. There is very little downside to this idea and tremendous upside. In 10 or 20 years New Orleans could become our Hong Kong.
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