A week or so ago, I mentioned a whole lot of reading that I’m doing as part of my attempt to understand what can be done to help New Orleans recover from the devastation of last August’s hurricane.
The fact that I’m starting with Virginia Postrel and Jane Jacobs probably indicates that I don’t think that federal micromanagement is the way to go. One of Ms. Postrel’s early points in The Future and Its Enemies is that there is no “scratch” from which to start, in a dynamic society. Even annihilating swathes of the city doesn’t mean it’s Year Zero in NO,LA; there are tons of people who have claims on their homes, who don’t want to move away for good, and don’t want to live in federally subsidized housing projects.
All of which is to say, I’m not in agreement with Representative Baker (R-LA), who proposes an $80 billion federal program to “to pay off lenders, restore public works, buy huge ruined chunks of the city, clean them up and then sell them back to developers,” according to the Times. Or, more expansively:
Under his plan, the Louisiana Recovery Corporation would step in to prevent defaults, similar in general nature to the Resolution Trust Corporation set up by Congress in 1989 to bail out the savings and loan industry. It would offer to buy out homeowners, at no less than 60 percent of their equity before Hurricane Katrina. Lenders would be offered up to 60 percent of what they are owed.
To finance these expenditures, the government would sell bonds and pay them off in part with the proceeds from the sale of land to developers.
Property owners would not have to sell, but those who did would have an option to buy property back from the corporation. The federal corporation would have nothing to do with the redevelopment of the land; those plans would be drawn up by local authorities and developers.
So, from what I gather, the plan will involve massive federal involvement and funding, coercive land sales (why not just employ eminent domain, while you’re at it?), and a close alliance with “local authorities and developers” who are among the crookedest in America.
One of the best things about the article — besides the line “the bill has become increasingly important to Louisiana because the state lost out to the greater political power of Mississippi last month” — is that virtually every positive quote about the program seems to be delivered secondhand by . . . Rep. Baker!
And mourn the likely departure of a NYC institution, while you’re at it.
Is there some sort of magic, corned-beef flavoring rock buried underneath that deli that mean they can’t move and makes this anything other than a story about a neighborhood going more upscale than some businesses can afford? Because that would be a page 1,204,854,063 story. I wanted to slap everyone involved in that story, Gil.