I'd like to ask readers to log what they think the policy issues raised by Katrina are. These are the ones that I think are common knowledge:
1. The Administration withheld levee stabilization funds, which played a direct role in the catastrophic flooding.
2. FEMA has been politicized by its transfer into Homeland Security, compromising its effectiveness.
3. Damage to wetlands, directly caused by Administration action
, raised the level of the storm surge
4. Depletion of the National Guard due to the demands of Iraq hampered response
5. Dependence on oil and a shortfall in refinery capacity amplified the economic consequences.
6. A failure by the US to deal with global warming and to deal with coastal development will ensure that the same tragedy is repeated many times, all over the world.
7. Disaster planning absolutely must include making provision for the poor, who often are unable to leave an endangered area.
Some solid economic estimates are appearing.
"estimates of insured losses... could easily top the record of $21 billion set by Hurricane Andrew in 1992, according to Robert Hartwig, chief economist at the Insurance Information Institute....property damage in Katrina's direct path...represents only a small part of the harm inflicted by the hurricane. More significant -- and harder to measure -- is the damage to the national economy... "
My S.W.A.G. is that the final costs will be $150B: $50B in property damage and loss of life, $50B in direct damage to the US economy primarily due to cessation of business in New Orleans for an estimated three months, and $50B in indirect damage to the US economy not attributable to simple economic transfers.
It's instructive to compare these to the costs of 911. Krugman has a paper
estimating the costs of 911 as follows: NYC property damage $22B. NYC loss of life: $10B. He didn't estimate the costs of the damage to the Pentagon or the airliner that crashed, but perhaps these would add $2 B. All other economic costs (i.e., not including economic transfers like insurance rate hikes): less than $100 billion.
There are those who will claim that it is playing politics to point out where mistakes were made and by whom.
These are the people who will be morally responsible if any of the mistakes are repeated in the next disaster.
Anyway, suggestions on policy issues are welcome.
8. Sukabi points to the fact that part of the catastrophe is due to an unqualified appointee placed in charge of FEMA. I think the problem at the root of this is the doctrine that the president is entitled to appoint anyone he wants to. This president has appointed criminals, liars, and fools and the American people have paid. There clearly need to be minimum standards set, so that the increasingly ignored Senatorial function of advise
and consent is revived.
9. Sheri points to the upside down priorities of the Administration. I have suggested pay for performance as a policy answer. Not because Bush needs the money, but because that's how feeble minds keep score of how they're doing.