Sunday, December 04, 2005

New Orleans, on it's own.

Three months after disaster, talk about federal help for the beleagured city is mostly that.Tribes Have All the LuckWrongful Imprisonment: Anatomy of a CIA Mistake
And even the small aid offered evacuees will be withdrawn in the near future.Blanco RecordsFor Alito, a Tricky QuestionCunningham Bribery
But the risks that individual New Orleanians must shoulder in such an on-your-own recovery appear staggeringly large.Automakers BailoutWar worries GOPDean Hammers Bush
"There is no market solution to New Orleans," said Thomas C. Schelling of the University of Maryland, who won this year's Nobel Memorial Prize in Economic Sciences for his analysis of the complicated bargaining behavior that underpins everything from simple sales to nuclear confrontations.The Talk Shows
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"It essentially is a problem of coordinating expectations," Schelling said of the task that Vignaud and her neighbors must grapple with. "If we all expect each other to come back, we will. If we don't, we won't.Death Penalty to Be Sought In 'Precious Doe' SlayingBodies of N.H. Children IdentifiedMd. Execution Still On Despite Analysis
"But achieving this coordination in the circumstances of New Orleans,'' he said, "seems impossible."Montgomery Fire VictimTextbook DelaysJunk Food
The situation in which residents find themselves is an extreme example of a trend underway for a quarter-century, a shift of economic risk from business and government to working families, and an increasing reliance on free markets to manage society's problems. Red Cross Bush-Blanco Caffeine Anti-Lice Flaunt it
Safety nets such as unemployment compensation, employer-provided healthcare insurance and pensions, and, recently, effective disaster relief have been reeled in or removed. Increasingly, families from the working poor to the affluent are left largely to buy and sell their own way to safety even when their individual efforts seem utterly outgunned, as they do in the case of Katrina.Detroit Gibbs Wins Redskins Iraq McCainChavez Pipeline Race Allawi In Najaf Season of Scandals
"There are classes of problems that free markets simply do not deal with well," Schelling said. "If ever there was an example, the rebuilding of New Orleans is it."Dean Cunningham Climate Dorgan Mortgage Chic Hotels Sursum Corda
Prospects for a quick municipal comeback peaked 17 days after the hurricane and flood, when Bush stood before St. Louis Cathedral in historic Jackson Square and told a national television audience that "there is no way to imagine America without New Orleans, and this great city will rise again."New Paths Fairfax EPA Slanting Nanotechnology Exercise Wrongful Imprisonment With AOL
The hopes thus raised were kept alive in the first two months following Katrina. The president sought first one, then two emergency spending bills totaling $62 billion. The Army Corps of Engineers quickly signed contracts to rebuild the city's protective levees to their pre-storm condition. The Federal Emergency Management Agency announced it would award 60,000 households the maximum allowable relief of $26,200. A steady stream of planning conferences by architects, urbanists and political leaders spread the good word that major metropolises never die.Yellow Pages Unit BlackBerry Angry BellSouthGrandma Nutcracker Glitter
But in recent weeks, a new reality has settled in as the agencies that were stepping up to help guide the city's comeback have stepped back down again.Big Event
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FEMA said it would stop covering the hotel costs of more than 50,000 households at the beginning of December — later extended until Jan. 7 — even while acknowledging that many, especially in New Orleans, would have trouble finding alternative accommodations.

Despite repeated pleas, the corps and the White House refused to promise any strengthening of the levees beyond what was underway. Investigators, meanwhile, concluded that several of the protective walls that failed did not meet corps-approved standards, a discovery that raised doubts about the safety of the entire levee system.

Emergency spending slowed sharply. The national flood insurance program temporarily suspended claims payments for Katrina, and program officials hinted broadly that they would tighten eligibility requirements to get coverage for the next storm.

Even the tiny agency charged with gauging the elevation of America's ground added an unexpected hurdle. It quietly announced that New Orleans and environs had sunk more than anticipated, forcing it to replace all of its measuring sticks. The result is that New Orleanians will have to build higher to escape future floods.


To an extent almost inconceivable a few months ago, the only real actors in the rebuilding drama at the moment are the city's homeowners and business owners.


New Orleans appears almost entirely dependent on a bottom-up process of one individual's decision to rebuild piling atop another's until recovery becomes self-sustaining.

In theory, such a virtuous cycle is at the heart of every market economy, and, once underway, should revive the city. But a look at some of the uncertainties facing individual New Orleanians — rich and poor, black and white — suggests that this is where matters turn truly daunting.

Levees hold the key

According to Schelling, the key to making almost any kind of human activity work is "credible commitments." Buyers must make them to sellers. Governments must make them to citizens. Nations must make them to each other.

The credible commitment that virtually every resident of New Orleans wants more than any other is a pledge from the Army Corps of Engineers to rebuild the levee system bigger and better than before Katrina.

"If they put back good levees to the [Category 3] level authorized before Katrina and we can get a commitment to build them slowly up to Category 5, people will come back," said Walter Isaacson, a News Orleans native, former editor of Time magazine, former chairman of CNN and co-chairman of the Louisiana Recovery Authority, a new state board appointed by Gov. Kathleen Babineaux Blanco to oversee reconstruction. "It won't be a purely rational decision, but they'll come."


state investigators discovered that sheet pilings along floodwalls that failed on 17th Street and London Avenue near Granada Drive extended to barely half the depth that corps' designs called for, and that the walls themselves were of a weaker design than what the corps had recommended. On Wednesday, corps engineers partially confirmed the findings.

The news has opened a new front in New Orleanians' fight for outside help in rebuilding. In effect, they argue that while what happened to much of the city was a natural disaster, what happened to many of the suburbs south of Lake Pontchartrain was the result of a failure of the corps and therefore something for which Washington should compensate them.

"We're talking about the negligence of man, not an act of God," said Republican state Rep. Emile "Peppi" Bruneau, who represents the area.

"Our citizens are showing the spirit to survive, but it is unfair to ask people to pump their already damaged savings back into their homes and businesses without a demonstrated commitment from the federal government to protect us the right way this time," New Orleans Mayor C. Ray Nagin said.


he problem for residents is that years will pass before all of the investigations are complete and the decisions made. In the meantime, the discovery of flaws along the two canals has caused fear to spike about the safety of the entire levee system and produced the opposite of the "credible commitment" New Orleanians need.

"You have to wonder whether the same flaws exist in places that didn't breach," said King Logan, a marketing executive whose home in the tony Country Club Gardens neighborhood took on 6 feet of water, despite being considered on high enough ground to be safe from flooding.

"I'm certainly not going to rebuild," he said, "until somebody convinces me the rest of the system isn't as poorly built."


If city residents aren't getting what they need from the Army Corps of Engineers, they are having even less luck with the government's national flood insurance program.

In theory, the FEMA-run program should make decisions about whether to rebuild easier because it assumes some of the financial risk involved by promising to cover up to $250,000 in flood damages.

And because FEMA requires that the buildings it insures be built above the projected level for a once-in-100-years flood, the program seems to provide protection against the actual physical risk of flooding as well.

But flood insurance has turned into a morass in the wake of Katrina, with many homeowners and business owners finding it nearly impossible to collect for the just-passed storm or to figure out what coverage they'll be eligible to get for the next one. The disarray represents a second strike against hopes for a go-it-alone rebuilding.

Part of the problem is that while Washington provides basic flood insurance, the government depends on private insurance agents to sell it as part of a standard homeowners' policy. Interviews, lawsuits and complaints filed with the Louisiana insurance commissioner's office suggest that many agents are underselling the flood portion of policies while overselling the company-provided homeowners' part.

Some homeowners, like Louis J. Gentry Jr., who together with his wife, Kim, just finished rebuilding their Lakeview home two years ago and insured it through State Farm, have discovered themselves financially "upside down" without enough flood coverage to pay off their mortgage. Others, like Vignaud, who insured through Travelers, said that they were assured the homeowners' portion of their policies would cover their house's contents even in case of flood, only to learn otherwise since Katrina.

When Laurie Vignaud was in town last week, she registered the car she purchased to replace her drowned Lexus, and renewed her Louisiana driver's license — two inexpensive ways to maintain her connection with New Orleans.

But when the work crew gutting 1249 Granada Drive hauled the last load from the house, she told them to board it up after it dried. Then she and her daughters headed for Houston and a newly rented three-bedroom town house in a gated suburb.

"It would just break my heart if I lose that house," she said. But with so much up in the air about the levees, insurance, her neighbors and the city, she said, "there's no way I can do anything now."

Vignaud's employer, Hibernia, was acquired recently by Virginia-based credit card giant Capital One Financial Corp. and is aggressively expanding in Texas. The bank's Houston-based executives have asked her to stay, according to Hibernia Executive Vice President Willie Spears. Next week, she expects to be in Brownsville to hire a new employee, then fly on to Dallas for more hiring.

Meanwhile, Leroy Vignaud is trying to get FEMA to put a trailer next to his house with the circular staircase. He has purchased a small pickup truck and a few tools.

Legally blind and on unfamiliar terrain, he has asked his wife to drive him home to retrieve what he can.

"I can't walk away from my resources," he said.

On Their Own in Battered New Orleans

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