Excerpt: The Katrina Effect

Editor's Note: The following is excerpted with permission from All Together Now: Common Sense For a Fair Economy (Berrett-Koehler).

On August 29, 2005, the powerful hurricane Katrina hit the U.S. Gulf Coast, flooding 80 percent of New Orleans. An estimated one million people were evacuated from the area, though many of the poor, old, and ill were unable to leave and seek higher ground. Moreover, those left behind were overwhelmingly African American. The nation watched in horror as death and destruction flashed across our TV screens. We were inured to seeing such events unfold in third-world countries. How could they possibly occur in a major American city?

Equally unbelievable, the government response at all levels was late, insufficient, and widely considered by all sides to have been lethally bungled. President Bush, on vacation at the time, appeared not to grasp the magnitude of what was occurring until a day or two later. Even then, he was uncharacteristically off-key in his response. His initial comments that "America will be a stronger place" for going through the disaster seemed like spin, especially given the inadequate federal response.

As the tragedy wore on, the feds and local politicians started blaming each other. The Federal Emergency Management Agency, though created to react to such emergencies, was particularly inept. As reported by Los Angeles Times journalist Peter Gosselin, FEMA underwent a renaissance under Clinton, "speedily responding to the 1993 Mississippi flood, the 1994 Northridge earthquake, and other disasters." When George W. Bush was elected, he gave the job of heading FEMA to his campaign manager, Joe Allbaugh, who criticized his new charge as "an oversized entitlement program," suggesting that states and cities would be better off relying on "faith-based organizations."

Much of the public became transfixed by the disaster and its aftermath. For the media, it was all Katrina, all the time. As an economist who often comments on government data releases, I was asked in every interview  about the economic impact of Katrina for weeks after the storm. As the days wore on, we learned to our disbelief about victims dying in homes, in hospitals, and on the flooded streets of their cities, especially New Orleans.

It seemed incomprehensible that we as a nation would be unprepared for such an emergency, especially after the terrorist attacks of 9/11. Right underneath the surface of all this anxiety could be felt the pulse of a critically important national discussion about the role of government. A critique of the political and social philosophy I call YOYO ("You're on your own") coalesced amid the storm's wreckage. To be sure, there were those who dismissed the significance of FEMA's performance as just another example of governmental failure, but these were largely anti-government ideologues whose views appeared to be out of step with the mainstream. Few took seriously the notion that less government was necessary, before or after the event. To the contrary, the conservative majority in the federal government immediately began spending billions (over $60 billion in the first week, with billions more to follow, the most ever in response to a natural disaster) to redress the damage.

A conversation broke out on the op-ed pages, in blogs, in letters to the editor, wherein citizens actively wondered if we'd gone too far down the YOYO path. Liberal columnists like Paul Krugman lambasted the administration, connecting the dots between its ideology of individualism and its failure to rise to an occasion of such dire need. In an op-ed entitled "Killed by Contempt," he wrote:
"The federal government's lethal ineptitude wasn't just a consequence of Mr. Bush's personal inadequacy; it was a consequence of ideological hostility to the very idea of using government to serve the public good. For 25 years the right has been denigrating the public sector, telling us that government is always the problem, not the solution. Why should we be surprised that when we needed a government solution, it wasn't forthcoming?"
Letters to the editor during this period express with crystal clarity the stakes invoked by hyper-individualism. One letter argued that this breakdown of the social contract was directly related to the "starve the beast" mentality of those who would cripple the government by cutting off its revenue stream. The writer went on to assert that, contrary to the belief of those in charge, "'the beast' is not government. It is the insolence of those who believe that helping one's fellow citizens is not a duty, but an option."

Another letter writer summed it up this way:
"We have a president ... and a Congress whose agenda is to privatize risk by reducing public financing and dismantling public safeguards, including bankruptcy, Social Security, health insurance, and environmental and disaster protections. The level of the government's response to Katrina was as predictable as the hurricane itself. You get what you pay for.
This is what an ownership society looks like. This is what an ownership society means: we are each of us on our own.
Even conservative columnists such as David Brooks talked about the hurricane's aftermath as a unique opportunity to use the tools of government to address the deep economic and social inequities that remained so stark even as the floodwaters receded.

I'm not citing those letters and opinion pieces because I think they're right. I do, but what of it? There are surely letters and op-eds saying just the opposite. I'm citing them because they so precisely capture my point. Even before Katrina, many of us shared a sense that something was wrong with the extent to which we were shifting economic and social risks from shared sources to individuals. The privatization efforts by the government, the defunding of safety nets,  the decision of businesses to drop worker pensions, changes in corporate norms that in earlier times protected jobs but now made workers more disposable--all of these ongoing risk shifts were already leading to a heightened sense of YOYO-induced insecurity. But the storm, and particularly its aftermath, shoved these concerns to the front burner for a growing number of citizens.

After the Storm: A Potentially Transformative Moment

Eventually stories of the flood receded from the front page, but the sentiments remained. As I mentioned, part of my job is to debate national economic policy, and I'm well aware that two economists hammering it out on CNBC as to whether the Bush tax cuts really created jobs, or whether the Federal Reserve should raise interest rates, seems more like weird entertainment than something that might yield useful insights. Yet, in the post-Katrina world, the discussion felt a lot more urgent. Suddenly, something important seemed to be riding on whether we could blithely add more than $100 billion to the deficit for rebuilding hurricane-damaged areas while engaging in further tax cuts for the wealthy. All of the sudden, we stumbled upon a potentially transformative moment in history and politics.

After the storm, at least for a while, there was a sense that it matters how we as a nation handle the responsibility of economic policy (and by we I mean the electorate, a bunch of people who collectively decide whom we appoint to set the nation's agenda). It matters how we approach the big problems of the day: globalization, national health care, taxes, our stagnating and ever more unequal incomes. But it also matters how we approach the problems in our everyday lives.

The incredibly uneven quality of our public schools, the eroding quality and cost shifting of employer-provided health care and pensions, the increasing insecurity of all jobs, not just those in manufacturing--all these problems link back to an ongoing shift in the way we view the role of government in our lives. That view has evolved from a mind-set that dates back to the Depression. Under that mind-set, which persisted until about a generation ago, more of us had a greater sense that we're all in this together and that it is our right and our privilege as a society to take the needed steps to ensure our economic security.

We've lost that sense. With the ascendancy of YOYO philosophy, we've lost the ability to come together and create the government we need to meet the economic and social challenges we face at every level. Under YOYO, we can neither shape the way globalization plays out in our lives, nor invest in quality education in our neighborhoods.

It is of course not the only important shift that's occurred. Obviously, our electorate is closely divided along various lines. But tragedy has a way of pushing our differences into the background. Red stater or blue stater, any one of us could have been caught in that storm, just as any of us could be caught in the sights of terrorists. In Katrina's aftermath, there existed, at least for a few weeks, an uneasy sense that the path down which YOYO politics has been taking us is as dangerous as it is unsustainable. And of course, many of us felt this long before the New Orleans levees gave way.

In this regard, when he asserted that America may well be a stronger place once we recover from this devastating blow, the president may have been right. But ironically, it will be because we once again see the danger in the type of government that his administration, with the help of the Congress, has so aggressively been pursuing. The Katrina debacle was a terrible wake-up call, reminding us of the costs of losing sight of our connections to each other.

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