Tuesday, August 29, 2006

Katrina Rebuilding

Is the government so far failing in rebuilding New Orleans or succeeding in not rebuilding?

The LA Times reports that so far only $44 billion of the $110 billion of aid approved has been spent. That means that the government has not yet spent $66 billion rebuilding in an unsustainable below-sea-level river delta that is likely to flood again when the next tropical storm hits the New Orleans area. It is much more wise to build new in locations that do not need the protection of multi-billion levee systems to survive the next tropical storm. The challenge is how to encourage people to build elsewhere without being seen as not caring about New Orleans. Especially when the accusation "George Bush doesn't care about black people" has already been made.

Doing nothing is often the right thing to do. But for the government, doing nothing can actually be difficult. The media will attribute doing nothing to not caring, which to the press is usually worse than failure to "do something". For example, the administration has succeeded in doing nothing about China's exchange rate, which has required a delicate balance of providing just enough rhetoric to be seen as caring while preventing arch-protectionist Chuck Schumer from imposing massive tariffs and quotas. They also succeed in doing nothing in Lebanon for the first few weeks.

If it takes failure to not spend taxpayer's money than incompetence can be a virtue.


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