Almost before Katrina blew herself
out, anger over the plight of poor New Orleanians erupted across the nation’s
editorial pages, underpinned by the (often tacit) argument that the wealthy were
somehow to blame for the widening chasm between rich and poor. Having benefited
from economic trends and fiscal policies that left the poor, quite literally,
behind, these editorialists argued–as some continue to–that the rich should be
taxed to help them now.
 Typical of the tone is a September 19, 2005, editorial in the
San Francisco Chronicle, entitled "Give the money back." In it, editorial writer
Louis Freedberg argued that the Bush administration’s tax cuts for the wealthy
should be rescinded, and the additional revenue used to help rebuild New Orleans
and support its low-income residents. "Even millionaires should be able to
recognize that the foundation on which President Bush sold his tax cuts to the
country has totally collapsed," Freedberg scolded.
The anti-rich tenor of commentary since the hurricane hit was
reflected in the pillorying of Barbara Bush for her (admittedly thoughtless)
"Let them eat cake" comment about how the evacuees housed in the Houston
Astrodome were "underprivileged anyway, so this is working very well for them."
Meanwhile, the outpouring of philanthropic resources–in terms of both financial
and human capital–from affluent individuals and families went largely unremarked
upon during this maelstrom of soak-the-rich polemics.
But because they run counter to much of the country’s
temperament, these sentiments have not taken root. It takes a truly shattering
economic catastrophe on the scale of the Great Depression to weaken opposition
from members of all classes to creating barriers to their own advancement and
their ability to succeed and become wealthy themselves. These goals both drive
and limit the government’s policymaking options. Anything that smacks even a bit
of anti-entrepreneurial tax increases, for example, faces an uphill battle. This
aspect of our national character tempered the knee-jerk policy recommendations
for helping the poor by draining the rich.
Half a year later, the policy ramifications of Katrina–and Rita
and Wilma–are becoming clearer. The Bush administration’s belated reaction to
the Gulf Shore storms has solidified expectations of huge multibillion-dollar
federal bailouts for disaster-ravaged regions–what critics have derisively
labeled the New New Deal. The fiscal ramifications of this are enormous. If the
federal share of the rebuilding costs runs as high as local officials expect, it
will be the largest wealth transfer of its kind in the postwar era.
Much as the idea of eliminating federal unemployment insurance became
politically untenable after the Great Depression, conservative commentators fear
that, in the wake of this Gulf Coast precedent, politicians will be unable to
refuse requests for large-scale disaster aid. And, just as the fiscal fallout of
FDR’s New Deal and LBJ’s Great Society was borne in large part by well-off
taxpayers and their businesses, the bill for this New New Deal will most likely
be laid at the door of the wealthy.
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