A Marshall Plan for the Big Easy?

Published September 19, 2007

Washington Times

Two years ago hurricanes Katrina and Rita caused more destruction than any other natural catastrophe in American history. New Orleans is still far from being healed. Water flooded 80 percent of the city and more than 1,800 died. The damage was less severe in Mississippi and Alabama.

After the 2005 flood waters receded New Orleans was plagued by chaos. Looters were not apprehended, much less shot, and some police officers joined in the looting. Even today, schools, hospitals and public safety facilities languish and tens of thousands still cannot return to their homes. For perspective, in the 1906 San Francisco earthquake, 3,000 died and 225,000 were made homeless. And policemen were ordered to shoot looters.

To make matters worse New Orleans Mayor Ray Nagin, Louisiana Gov. Kathleen Blanca and President Bush were slow and confused in their first responses. Criticism from the press, public and pulpit finally got them moving.

Confronting such disasters, we are tempted to reach for a magic key that will provide an answer. Two years after the disaster, on Aug. 29, a rally in New Orleans found that answer. Sponsored by the local AFL-CIO, United Teachers Union and Black Trade Unionists, the participants declared “enough is enough,” and called for a new Marshall Plan to restore the city.
These angry conferees discounted what had already been done. The federal government had committed $127 billion in dollars and tax relief: $96 billion to the three stricken areas; $24 billion to build houses, schools and infrastructure; $7.1 billion to repair levees; and $12.7 billion in tax relief for entrepreneurs. More than 1.1 million volunteers nationwide provided help for rebuilding.

Despite this massive support, recovery efforts have fallen far short of expectations. Confusion and corruption have slowed rebuilding. Thousands of houses and several hospitals still lie in soggy ruins. Despair and anger are widespread.

The devastation in New Orleans also reminded some older Americans of the flattened cities in West Germany and an economy burdened by millions of displaced persons fleeing the Soviets. Sensing similarities to Katrina, some of them also called for a Marshall Plan to deal with the Katrina disaster.

In a Harvard speech 60 years ago (June 5, 1947), Secretary of State George Marshall called for a massive infusion of funds to help restore war-battered Europe. Six years later, after an expenditure of $107.6 billion in inflation-adjusted dollars, 16 Western European countries had been rescued from economic disaster, their economies restored, their democratic politics revived. Dean Acheson called the Marshall “one of the greatest and most honorable adventures in history.”

Today, a Marshall Plan to rescue the Big Easy may sound intriguing, but it is a bad idea and has not received serious consideration. The devastation of New Orleans may have superficial similarities to the warscape of Western Europe, but the differences between Berlin then and New Orleans now are profound. The Germans had a strong work ethic and a determination to rebuild, virtues encouraged by a humane U.S. and British military occupation that was reinforced by the rule of law even as it was reaffirmed at the Nuremberg Trials. German efficiency and ingenuity were intact. There was virtually no crime.

In contrast to postwar Europe, the political administration in New Orleans leaves much to be desired. Bribery is widespread, the civil police force is less than reliable, and imported National Guard troops still patrol the streets. Murder rates are high.

Homeland Security inspectors have uncovered extensive fraud: $150 million in questionable costs, $58 million in supported costs, and $264 million that “could be put to better use.” The U.S. Justice Department cites 680 cases of fraud, 764 arrests for fraud, and 150 persons charged with fraud. (Sources: White House, Federal Emergency Agency, AP story.)

News Orleans Mayor Ray Nagin, says he wants a “market driven” economy for his city, but critics such as Fred L. Smith of the Competitive Enterprise Institute say Louisiana’s current economy is “very regulated and politicized.”

Under these circumstances, a massive Marshall Plan for the Katrina catastrophe would be a waste of U.S. resources. After all, the flow of federal funds to Katrina and Rita in the last two years has exceeded what the U.S. gave under the Marshall Plan by $20 billion in inflation-adjusted dollars. And Marshall aid went to 16 countries over a five-year span.

What New Orleans needs is not a Marshall Plan, but serious reform beginning with an honest administration, a reliable police service, and competent civil servants. Local officials should show as much concern for their city as the unpaid volunteers who have come to help. Such reforms would help restore civic pride and prosperity.

Ernest W. Lefever is a senior fellow at the Ethics and Public Policy Center.

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