Kudos to Slate for Tyler Cowen's outstanding series of "Dispatches" on New Orleans. Cowen, an econ prof at George Mason and co-author at Marginal Revolution, provides some refreshingly candid analysis of the city's post-Katrina challenges. From Tuesday's piece:
Since so many homes were destroyed, the natural inclination is to build safer or perhaps impregnable structures. But that is the wrong response. No one should or will rebuild or insure expensive homes on vulnerable ground...
Instead, the city should help create cheap housing by reducing legal restrictions on building quality, building safety, and required insurance... Once the current ruined structures are razed, governmental authorities should make it possible for entrepreneurs to put up less-expensive buildings. Many of these will be serviceable, but not all will be pretty. We could call them structures with expected lives of less than 50 years. Or we could call them shacks.
What is the advantage of turning wrecked wards into shantytowns? The choice is between cheap real estate or abandonment. The land will not sustain high-rent, high-quality real estate... If various levels of government try to mandate higher values than the land will support, the private sector will simply withdraw its participation, leaving nothing behind.
...Reducing building restrictions so developers can put up cheap housing quickly is probably the best way to jump-start recovery. For starters, cheap housing might be one means of inducing migrants—many of them Latino immigrants—who have come to the city for temporary construction jobs to stay. And as low-cost laborers settle in the city, they'll boost economic activity and pay taxes, thereby attracting corporations, service suppliers, and entrepreneurial small businesses. It would be fitting if New Orleans were rebuilt, both physically and culturally, by Latin and Caribbean immigrants. After all, the city has long been influenced by Hispanic and Caribbean settlers...
From Wednesday's entry:
The city has so far been ambivalent about the influx of new [Latino] workers. But New Orleans should embrace its new residents, since Latinos will drive the city's structural and cultural renewal and help New Orleans claim a future for itself...
In October, Mayor Ray Nagin asked, "How do I ensure that New Orleans is not overrun by Mexican workers?" The answer: Do not rebuild.
And from today:
In the realm of higher education, the cultural renewal of New Orleans is well under way. Unlike the city itself, New Orleans' universities are almost back to normal, with some creative adjustment...
So why have the universities done so much better than the city as a whole? First, the universities were never wracked by extreme corruption and bad governance. They have continued to pursue success and avoided getting snarled up in questions about who is really in charge. New Orleans must deal with politically divided federal, state, and local governments, but the universities have clear administrative chains of command, starting with their boards and presidents.
The more definite lines of accountability and authority lead to clearer priorities. The universities are focusing on what economists call their comparative advantages—the things they do better than other institutions...
The city, by contrast, has no sense of what must go and no vision of success. No leaders have articulated a vision for the city that balances the myriad competing local interests. The buck stops nowhere and many officials and citizens seem to wait for Washington to solve every problem. For any specific difficulty, the mayor blames Michael Brown, who blames Secretary Chertoff, who blames Gov. Blanco, who blames President Bush. Nobody is held accountable for failure to lead or failure to enforce the law and protect property rights. And as in any patronage system, a suggestion to cut failing programs is usually dead on arrival. The city sees spending money and delivering contracts to constituents (read: interest groups) as an end in itself....
Cowen's vision is both encouraging and depressing; the former because he proposes some innovative but concrete steps the city could take to revitalize itself, and the latter because his portrayal of the city's governing culture suggests that it's unlikely that such measures will actually be implemented.
Sigh.