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How The Free Market Killed New Orleans


Ten years ago Hurricane Katrina hit New Orleans. Today the media are full of commentaries about it. Yet now like then, our pundits leave out the real story. I wrote this in 2005.

The free market played a crucial role in the 2005 destruction of New Orleans and the death of thousands of its residents. Forewarned that a momentous category 5 hurricane might hit that city and surrounding areas, what did officials do? They played the free market. They announced that everyone should evacuate. All were expected to devise their own way out of the disaster area by private means, just like people do when disaster hits free-market Third World countries.

It is a beautiful thing this free market in which every individual pursues his or her own private interests and thereby effects an optimal outcome for the entire society. Thus does Adam Smith’s “invisible hand” work its wonders in mysterious ways.

In New Orleans there would be none of the regimented collectivist evacuation as occurred in Cuba. When a powerful category 5 hurricane hit that island in 2004, the Castro government, abetted by neighborhood citizen committees and local Communist Party cadres, evacuated some 1.5 million people, more than 10 percent of the country’s population. The Cubans lost 20,000 homes to that hurricane—but not a single person was killed, a heartening feat that went largely unmentioned in the U.S. press.

On Day One of Hurricane Katrina, 29 August 2005, it was already clear that hundreds, perhaps thousands, of Americans had perished in New Orleans. Many people had “refused” to evacuate, media reporters explained, because they were just plain “stubborn.”

It was not until Day Three that well-paid telecasters began to realize that tens of thousands of people had failed to flee because they had nowhere to go and no means of getting there. With hardly any cash at hand, and over 100,000 people without cars of their own, many had to sit tight and hope for the best. In the end, the free market did not work so well for them.

Many of these people were low-income African Americans, along with fewer numbers of poor whites. It should be remembered that most of them had jobs before the flood hit them. That’s what most poor people do in this country: they work, usually quite hard at dismally paying jobs, sometimes more than one job at a time. They are poor not because they’re lazy but because they are paid poverty wages while burdened by high prices, high rents, and regressive taxes.

The free market played a role in other ways. President G.W. Bush’s agenda was to cut government services to the bone and make people rely on the private sector for the things they might need. He cut $30 million in flood control appropriations. He sliced an additional $71.2 million from the budget of the New Orleans Corps of Engineers, a 44 percent reduction. Plans to fortify New Orleans levees and upgrade the system of pumping out water had to be shelved.

Personnel with the Army Corps of Engineers had started building new levees several years before Hurricane Katrina, but many of them were taken off such projects and sent to Iraq, where they were needed to assist the empire in its wars.

It was not actually the hurricane that destroyed New Orleans. Katrina swerved and hit parts of Mississippi much harder. For New Orleans most of the destruction was caused by the flood that came when the levees broke, a flood that had long been feared by many.

On Day Three Bush took to the airwaves, and said in a live TV interview, “I don’t think anyone anticipated that breach of the levees.” Just another untruth tumbling from his lips. The catastrophic flooding of New Orleans had been foreseen by storm experts, engineers, Louisiana journalists, state officials, and even some federal agencies. All sorts of people had been predicting disaster for years, pointing to the danger of rising water levels and the need to strengthen the levees and pumps, and fortify the entire coastland. Bush chose not to listen.

In their campaign to starve out the public sector, the Bushite reactionaries allowed developers to drain vast areas of wetlands. Again, that old invisible hand of the free market was expected to take care of things. By pursuing their own private profit, the developers would supposedly devise outcomes that would benefit us all. But the Louisiana wetlands serve as a natural absorbent and barrier between New Orleans and the storms riding in from across the sea. And for some years now, the wetlands have been disappearing at a frightening pace on the Gulf‘ coast. All this was of no concern to the reactionaries in the White House.

This brings us to another way that the free market helped destroy New Orleans. By relying almost entirely on fossil fuel as an energy source—far more expensive and therefore more profitable than solar, tidal, or wind power—the free market has been a great contributor to global warming. Global warming, in turn, has caused a drastic rise in sea levels. And rising sea levels have been destroying the protective fringe of barrier islands and coastal marshlands along the Louisiana coast. “Every year,” reported the New York Times “another 25 square miles, an area roughly the size of Manhattan, sinks quietly beneath the waves. In some places, the [Louisiana] coastline has receded 15 miles from where it was in the 1920s.”

Global warming also adds to the ferocity of storms. The warmer waters and warmer air create greater evaporation and allow for greater accumulation as the hurricane passes over the waters gathering strength and momentum. So Katrina went from a category 3 to a category 5 as it came across the Caribbean and into the Gulf of Mexico. A year after Katrina the Bush administration blocked the release of a revealing report by the National Oceanic and Atmospheric Administration. The report suggests that global warming is contributing to the increasing strength and frequency of hurricanes. We can guess why the White House would want to suppress that kind of information.

As for the widely criticized rescue operation, free-marketeers like to say that relief to the more unfortunate among us should be left to private effort. It was a favorite preachment of President Ronald Reagan that private charity can do the job. For many crucial days that indeed seemed to be the policy with the flooding of New Orleans. The federal government was nowhere in sight but the Salvation Army began to muster its troops, as did many other organizations. Pat Robertson and the Christian Broadcasting Network—taking a moment off from God’s work of pushing the nomination of conservative jurist John Roberts to the Supreme Court—called for donations and announced “Operation Blessing” which consisted of a highly-publicized but totally inadequate shipment of canned goods and Holy Bibles to the hurricane victims.

The Red Cross went into action, in its own peculiar way. Its message: “Don’t send food or blankets; send money.” Apparently the Red Cross preferred to buy its own blankets and food. It received over $800 million in three weeks after the catastrophe but had failed to distribute most of it. A caravan of doctors and nurses from Ohio, laden with medical supplies for about seven thousand people, reached the Coliseum in New Orleans only to be told by the Red Cross that they were not needed. They were turned away even though the medical personnel within the Coliseum kept asking for help.

By Day Three even the usually myopic media began to realize the immense failure of the rescue operation. People were dying because relief had not arrived. Especially victimized were the infants, the elderly, the infirm, and others needing special medical attention. The authorities seemed more concerned with the looting than with rescuing people, more concerned with “crowd control,” which consisted of forcing thousands to stay pent up in barren areas devoid of minimal amenities or proper shelter. The police, state troopers, National Guardsmen, and U.S. Army personnel spent more time patrolling and pointing their guns at people than rescuing or otherwise helping them.

Questions arose that the free market seemed incapable of answering: Who was in charge of the rescue operation? Why so few helicopters and just a small force of Coast Guard crews? Why did it take helicopters five hours to lift six people out of one hospital? When would the rescue operation gather some steam? Where were the feds? Where were the buses and trucks? the shelters and portable toilets? The medical supplies and water? How was it that newscasters could get in and out of flood areas but rescuers and supplies could not?

And where was Homeland Security? What had Homeland Security done with the $33.8 billions allocated to it for fiscal 2005? By Day Four, almost all the major media were reporting that the federal government’s response was “a national disgrace.” Meanwhile George Bush finally made his photo-op shirtsleeve appearance in a few well-chosen disaster areas before romping off to play golf.

By the end of the first week, as if to demonstrate that reality is irrelevant, various free-market bloggers were already claiming ideological victory. They argued that the failure to deal with the crisis is proof that “government is inept; it doesn’t work.” It was private individuals, charities, and corporations that pitched in to help. It was Wal-Mart that sent in three trailer trucks loaded with water, and it was the Federal Emergency Management Agency (FEMA), part of Homeland Security, that turned them away. It was private families that took the refugees into their homes, while government herded them into the Superdome.

Overlooked here is that the great outpouring of aid from private citizens, as heartening as it was, did nothing to address the problems of flood and storm, evacuation, public safety, community security, long term individual care, rehabilitation, and infrastructure reconstruction.

To be sure, government does not work–certainly not when it is in the hands of reactionaries who have no desire to see it work. New Orleans was victimized by those rightwing ideologues who oppose the idea that government can be a salutary force in regard to social needs and human services. The White House reactionaries would be quite content to demonstrate that government is not to be counted on when it comes to helping communities (especially low-income and ethnic minority communities that are Democratic strongholds). Thus Washington took four days to respond to requests that National Guard units from other states be allowed into Louisiana.

For all their inertia, FEMA officials played a chillingly active role in sabotaging the delivery of aid, turning away supply convoys, and warehousing or giving the runaround to the many volunteer rescue units that poured in from other states. The community organizations, churches, and other grassroots groups that took in and fed thousands of people received not a dollar of reimbursement, neither from the Red Cross nor FEMA.

Of course, it should not go unnoticed that the White House reactionaries are selective free marketeers. They want to dismantle human services, get rid of public schools, public housing, and public health facilities; and they want to abolish the government’s regulatory role in the corporate economy. But they also want to extend government power into other areas. They want more power to carry out surveillance, classify official information, control private morals, vaporize civil liberties, and suppress public protest. They want plenty of government involvement when it comes to massive public subsidies and contracts for corporate America, limitless expansion of armaments and military technology, and perpetual overseas intervention. It is the victory of empire over republic. Government is not there to serve the people. The people are there to serve government.

In the aftermath of Hurricane Katrina, in a moment of touching irony, foreign aid was tendered by almost fifty countries, including many poorer ones such as the Dominican Republic, Honduras, India, Pakistan, Russia, and Thailand. By Day Seven, Mexico had sent army convoys and a navy ship laden with food, supplies, and specialists. German cargo planes came in with ready-to-eat meals and a German officer who openly expressed his concern that the meals might not reach the people in need. (He must have been watching the news.)

Cuba–which has a record of sending doctors to dozens of countries, including a thankful Sri Lanka during the tsunami disaster—offered almost 1600 doctors and loads of medical supplies. Meanwhile Venezuela offered one million barrels of gasoline, $5 million in cash, water purification plants, and 50 tons of canned foods and water.

Predictably, the offers from Cuba and Venezuela were rejected by the U.S. State Department. And as of Day Ten, the Bush administration had nothing to say about the vast array of supplies offered by all the other countries. People throughout the world, having seen all the television images, were beginning to think that perhaps America really was not paradise on earth. Eventually a few grudging thanks were heard from the White House. But what a deflating and insulting role reversal that America was taking aid from the likes of Mexico or anyone else. America the Beautiful and Powerful, America the Supreme Rescuer and World Leader, America the Purveyor of Global Prosperity most certainly would not accept foreign aid from a Third-World communist “failure” such as Cuba. But eventually aid sent by capitalist Honduras, capitalist Thailand and other capitalist nations was allowed in.

Postscript. To confirm the worst that has been said above, let us note that a year after the Katrina disaster, very little assistance was reaching the displaced working poor of New Orleans, most of whom were renters. An estimated 60 to 80 percent of rental units in the city were either destroyed or heavily damaged. Most of these had been occupied by low- and middle-income families. Billions in housing aid was pouring in but the bulk of it was slated for homeowners. Rents skyrocketed an average of almost 40 percent across the city in the year after Hurricane Katrina. Many lower-income residents were priced out of the market. The longer that rental properties rotted in the Louisiana heat and humidity, the more difficult they were to restore. In some areas homeowners were attempting to use the recovery process to rid their neighborhoods of long-standing apartment buildings that were damaged during the storm. “The renters of New Orleans, it seems, are on their own.”

A native of New Orleans, Jill Pletcher, wrote to me: “The conditions here–the city itself–is in shambles. Rats and trash in all the ‘off-touristy’ places, which is most of New Orleans. It’s not the New Orleans I grew-up in. The dirty brown lines 18 feet high on the sides of familiar buildings where water sat for two weeks is a sickening sight and reminder of a national atrocity—and one that people now smirk at while they express their ‘Katrina fatigue.’”

What the Katrina disaster demonstrated so clearly was that the White House reactionaries had neither the desire nor the decency to provide for ordinary citizens, not even those in dire straits. In the aftermath of the hurricane, I heard someone complain, “Bush is trying to save the world when he can’t even take care of his own people here at home.” Not quite true. He certainly does take very good care of his own people, that tiny fraction of one percent, the superrich. It’s just that the working people of New Orleans are not part of his crowd.

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