Thoughts on Post-Katrina Reconstruction

Here are a couple observations about post-Katrina reconstruction:

1. First, the sarcasm: a la post-9/11 policy, I keep wondering when Bush will announce that we simply must devote tens of billions to rebuilding (fill in the blank: Crawford, New Hampshire, Michigan; wherever: the only requirement is that the source of our attention have absolutely nothing to do with New Orleans or Katrina). And maybe we can also invade Iran -- after all, Iranian religious leaders talk of God, and hurricanes are often referred to as "acts of God" -- this connection is certainly no more tenuous than the Iraq-9/11 one.
   
   
2. On a serious note, it's hard not to snarf my coffee when I read this stuff from the GOP's so-called fiscal conservatives about how we shouldn't push off the rebuilding costs on our children and grandchildren. Actually, this is exactly the sort of cost that would be reasonable to share across generations.

   Why? Because this event is very rare (ignoring the possible effects of global warming, anyway), and its timing is unforecastable (though its possibility certainly was not).

   In other words, it's just the sort of large negative shock whose costs could reasonably be expected to be smoothed over time and over a large population of people, including future generations.

   New Orleans's unique culture and history is a natural treasure. For that reason, choosing not to rebuild the city would be tragic. It's reasonable to expect more responsible future decisions about land and wetland use along the Gulf Coast, but to dump all the costs on either the people of the region or the current generation of taxpayers is to ignore the entire point of insurance.

   Yes, it is true that New Orleans is not exactly the optimal place to have a modern city given its vulnerability to natural disasters, and yes, it's also true that precious little account seems to have been taken of the environmental impact of redirecting the Mississippi, etc. Those are mistakes that must not be repeated, and my understanding is that they need not be. With that caveat in mind, I think it should be fairly obvious that smoothing these costs over time is just plain common sense: borrowing to cover lumpy, unforecastable short-term costs is the sort of thing for which financial markets are properly used (yes, it would be better to pre-fund....but then, Alan Greenspan and many opponents of directly investing SS funds in equities have told us in no uncertain termsthat the government must not have positive assets to invest).

   It is more than ironic to hear the Mike Pences of the world prattle on in this fashion:

   Katrina breaks my heart....Congress must do everything the American people expect us to do to meet the needs of families and communities affected by Katrina. But we must not let Katrina break the bank for our children and grandchildren. [Link to today's Carl Hulse NYT story]
   

   Here, for instance, are some excerpts from a March 9 article in The Hill:

   Pence, one of a handful of members mentioned as a possible successor to Speaker Dennis Hastert (R-Ill.), stressed that making the tax cuts permanent is the Republicans’ No. 1 priority after national security, “particularly in the area of death taxes.” “Death taxes” is many Republicans’ preferred term for estate taxes....

   Citing assumptions about deficit-conscious conservatives’ being unwilling to spend the money needed to transform [Social Security], the congressman added: “House conservatives are ready to borrow the money.”

There you have Mike Pence in a nutshell: protecting future generations from reasonable costs while piling unreasonable ones on them.