Two years ago this week, Hurricane Katrina struck the Gulf Coast around New Orleans and Biloxi, Mississippi. According to the National Oceanic and Atmospheric Administration, “Katrina will be recorded as the most destructive storm in terms of economic losses, (but) it did not exceed the human losses in storms such as the Galveston Hurricane of 1900.”
This three-page White House fact sheet reports the federal government has provided $114 billion in resources. With tax relief included, the amount comes to $127 billion. Of the $114 billion, $96 billion (84%) “has been disbursed or is available for the states to draw from.”
In his column at National Review Online, Larry Kudlow writes about the “monstrous $127 billion” figure. He complains that “not a single media story has highlighted this gargantuan government-spending figure.” To put that $127 billion in perspective, he provides two comparisons:
- “The entire GDP of the state of Louisiana is only $141 billion, according to the U.S. Department of Commerce . . . This is simply unbelievable. And to make matters worse, by all accounts New Orleans ain’t even fixed.”
- “Perhaps all this money should’ve been directly deposited in the bank accounts of the 300,000 people living in New Orleans. All divvied up, that $127 billion would come to $425,000 per person!”
Geoff Pender, reporting for the South Mississippi Sun-Herald, provides a third example for the $23.5 billion that was allocated to Mississippi for Katrina recovery:
“It’s enough money to buy two average-sized houses for each of the 65,000 families in Mississippi who lost their homes. And, there would be enough left over to buy each family a brand-new Honda Accord to drive between their two $166,000 houses.”
Pender provides a particularly useful report. He explains how Katrina altered federal relief and where the where the money went.
Kudlow then writes:
“Think of this: The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government’s $127 billion check represents the quintessential failure of that liberal vision . . . Remember President Reagan’s line during the 1980 campaign about how LBJ fought a big-government spending war against poverty, and poverty won? Well think of all this Katrina spending as the Great Society Redux. And it failed. I guess the current Bush administration would like to label this ‘compassionate conservatism.’ But guess what? That failed, too.” [italics in original]
John Hawkins, writing at Townhall.com, says, “It’s time to get over it.” Admitting that it may be ‘too honest’ or ‘too mean,’ he writes:
“(P)eople lose their homes in this country every day of the year. If it isn't a hurricane, it's an earthquake. If it isn't an earthquake, it's a tornado. If it isn't a tornado, it's a fire. If it isn't a fire, it's a flood. Yet nobody sits and frets about John Doe, age 58, who lost his house in a flash flood two years ago or Jane Doe, age 60, who had her house blown away by a twister back in 2005.”
How would Larry Kudlow have brought New Orleans back to life rather than the ‘gargantuan’ $127 billion federal government bailout?
“Right from the start, New Orleans should have been turned into a tax-free enterprise zone. No income taxes, no corporate taxes, no capital-gains taxes. The only tax would have been a sales tax paid on direct transactions. A tax-free New Orleans would have attracted tens of billion of dollars in business and real-estate investment. This in turn would have helped rebuild the cities, schools and hospitals. Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.” [italics in original]
Unfortunately, that requires believing in capitalism and the free market rather than government and the Nanny State as the solution.
Additional resources: the Congressional Budget Office has several documents, and the White House has produced a ‘lessons learned’ report.