New Orleans, Katrina, FEMA, and the aftermath

My friend Alex has just returned to his home in uptown New Orleans. They have power and water, but the city is far from returned to normal. Alex is a very intelligent and well-informed citizen and his role as an officer of the local United Way chapter has given him unique access to the situation on the ground. Unfortunately, the news is not good.

The city of New Orleans is nearly bankrupt. The absence of commerce, the exodus of its tax base, and some ironic aspects of even the good stuff that is happening means that the city's revenues have ground to a halt. Few people realize that of the $60 billion approved for relief by the federal government, the city of New Orleans (i.e., government) receives almost none of this. 3,000 city workers (about half of the staff) has been laid off in the past couple of weeks, and the city's ability to pay the remaining workers is seriously threatened. Recently, Congress allocated $750 million of the $60 billion to be shared with affected municipalities across the gulf region, but this is a drop in the bucket compared to what is really needed.

The situation was not helped by the asinine proposal by the state's two senators to grant the state of Louisiana an astronomical $250 billion in federal aid IN ADDITION TO the $60 billion. This proposal would be equal to nearly 10% of the entire federal budget and was ridiculous. The resulting loss of credibility in congress means effectively that the state is unlikely to receive any material aid from the feds.

So where is the money going? FEMA is hiring contract services firms, like Haliburton, to clean up the city. These firms are subcontracting out the work to firms around the country. For example, the removal of stranded, ruined cars from throughout the city is being conducted by a firm based in California. This firm did not use local labor and trucks, but instead drove its own trucks from California and hired migrant labor for some of the more menial tasks. This example highlights a pattern for the city.

The mainstream news media is divided into two camps - those outlets who operate as a political engine (conservative talk radio, Fox News, etc.) are propogating spin - New Orleans is suffering because of a bad mayor and a bad governor but the federal government is doing wonders. The more liberal or independent media outlets are focusing on human interest stories - the tragic circumstances of evacuee families, the plight of an unemployed New Orleans worker, etc. NO ONE is covering the story of how the federal money is being spent and the realities of the city's economic situation.

Is Nagin the best mayor? Probably not. But is the situation his fault? No, not by any reasonable measure. You cannot ask a government to operate effectively with no money and no means to earn revenues.

New Orleans will eventually recover much of the magic that the world has known for centuries. But the process is abominable and appears to be done entirely the wrong way. Any ideas about how to escalate the visibility of this?

Ugh.