Catastrophic Analogy
This is not the first time flooding has affected the
Mississippi River basin and raised questions about the government’s response to
disasters, as well exposing the nation’s race and class divisions. In many ways,
the 2005 storm parallels a similar flood that took place in 1927, says John M.
Barry, who explored these issues in his book, Rising Tide: The Great Mississippi Flood of 1927 and How It Changed
America. In 1927, water covered some areas to a depth of
more than 30 feet and flooded land inhabited by nearly 1 million people. The
flood displaced nearly 325,000 people, the majority of them black, forcing them
into refugee camps for months. In the aftermath, the federal response under the
leadership of Secretary of Commerce Herbert Hoover, whom President Calvin
Coolidge placed in charge of flood relief, became a forerunner to the New Deal.
"For the first time in American history, American citizens of a
wide majority came to believe that the federal government had a responsibility
for individual citizens’ welfare, and ever since then, a majority of Americans
have believed that–although we’ve been arguing over where to draw the line
between government and individual responsibility," Barry says. Such notions of federal responsibility have waned since the
days of Roosevelt’s New Deal and Lyndon Johnson’s Great Society, but Katrina may
prompt Americans to revisit it, Barry contends. "This is clearly going to drive
home the need for government to function and be competent, without a doubt. And
there’s a real potential that it will also make Americans rethink what the
responsibility of the government is–and that’s a dicier proposition." While a huge amount of domestic spending may be necessary to
rebuild the Gulf Coast, the need comes at a bad time for conservatives who favor
tax cuts, points out Peter Wall, chief investment officer with JPMorgan Private
Client Services in New York. Fiscal conservatives also fear that these programs
set a precedent for funding massive rebuilding projects at a time when some
climatologists are warning that the number of huge storms will increase. Government spending on the war in Iraq, coupled with tax cuts,
expanded the federal deficit to $317 billion in 2005, roughly equal to 4 percent
of GDP. Should the deficit continue to grow and reach 6 percent of GDP, Wall
says, the overall economy may shudder. "As it builds and it becomes more and
more of a burden, it becomes corrosive, it can become inflationary," he notes.
"It restricts policies–particularly monetary policy–the federal government may
want to use. It is just an inefficient way to allocate capital."
Future Imperfect
Of the dozens of pieces of proposed legislation dealing with
Katrina recovery, fewer than half have passed. With the government’s fiscal
latitude increasingly hemmed in by tax cuts, the war and the deficit, securing
recovery money from the federal government will likely become more difficult as
time passes, especially in the run up to the 2006 elections. Louisiana’s
reputation for political corruption, dating back to Gov. Huey Long in the early
part of the 20th century, will do little to help the state’s case. "Seventy-plus-billion dollars going to just three states is one
of the largest transfers from the federal government to any set of states in the
postwar era." |
While it is unlikely that recent natural disasters such as
Katrina will reshape American politics to the extent the New Deal did in the
1930s, the inevitability of future hurricanes, earthquakes and, possibly,
terrorist attacks has forced politicians to reconsider the federal government’s
current approach to disaster aid. Similarly, private foundations and charities
are reevaluating their role. (See "Charitable Challenges").But the scope of federal aid may ultimately be much smaller
than originally envisioned. "The idea that there will be some national funding
and a grand scheme to rebuild the city to some level is, I think, slipping
away," says Ronald Utt, senior research fellow for the Thomas A. Roe Institute
for Economic Policy Studies at the Heritage Foundation in Washington. "There’s a
lot of increasing unease on the part of many people that with each disaster we
keep raising the bar of what’s expected of somebody, and in turn, this leads
victims and those who are harmed to have higher expectations." Politicians will dismiss such expectations at their peril. The
vast scope of the need, as well as the complexity of the accompanying economics
and politics, has ignited an uncomfortable debate that could fundamentally alter
the expectations Americans hold of government. In the end, the 2005 hurricane
season may reshape more than just the Gulf Coast’s landscape. For his part, Van
Rensselaer, and others like him, would like to see market forces play a far
greater role in current and future disaster recovery operations. "We need to
come up with a far better plan than just simply opening the treasury to a
complete rebuild," he says.
Elizabeth Harris is a staff writer for Worth.
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