$100 billion for Katrina: policy analysis and politics

Is this really a good way to spend $100 billion?

The Federal government is expected to spend $100 billion on disaster relief and reconstrucution in the wake of Katrina.

1. That’s one percent of our annual GDP, spent once. Not, in the larger scheme of things, an especially big deal.

2. But it’s not clear that if we are willing to move $100 billion (or think of it as an endowment that would yield $5 billion a year forever) from the private sector to the public sector, this is the best way to spend it. For example, $5 billion is roughly the budget of the National Science Foundation. Making sure the refugees and those who stayed behind are fed, clothed, housed, and helped to relocate is mandatory. The next $90 billion is optional.

3. New Orleans could have been rendered substantially hurricane-proof for less than it’s going to cost to rebuild it. (Scroll down to the end of this Tim Russert transcript for an expert appraisal.) Not hurricane-proofing New Orleans made the disaster that just happened inevitable, though the human toll could have been greatly reduced by better planning and execution by FEMA and by local authorities. Yet any proposal to spend that much in advance of the storm would have been dismissed as unrealistic.

4. Mike is surely right that we can’t have New Orleans back in recognizable form no matter what we spend. So we’re going to spend more to not really fix the problem than it would have cost to prevent it.

5. Rebuilding New Orleans without making it substantially hurricane-proof would be an act of criminal folly. But that’s the most likely actual course of action.

6. Running $100 billion more through the incompetently run GOP crony-capitalist machine is likely to give us results no better than we got from the same approach in Iraq.

7. On the other hand, having that much money to dole out could easily convert Katrina into a huge political win for Bush, Rove & Co.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com