Dear Friends of CEI:

 

As some of you know, Fran and I are from Louisiana.  I grew up in Pearl River, went to Slidell High, and then to Tulane.  Fran went to St. Rita’s Dominican High School and the University of New Orleans. All of these locations and institutions have been battered badly, some perhaps destroyed (information is very hard to acquire) by Hurricane Katrina.  My brother and his wife evacuated New Orleans and are safe in Baton Rouge, but they have no idea when they’ll be able to return and whether there’s anything to return to.  Much of Louisiana and Mississippi face massive problems before they can even begin to rebuild and to recover.

 

But great disasters force societies to confront their risks and realities; and it is possible that Katrina might encourage shifts toward more entrepreneurial-friendly policies in that state. After all, the last great flood of 1927 (described so eloquently in The Rising Tide) or, more precisely, the way it was handled, inflamed populist sentiments, laying the groundwork for the subsequent success of Huey Long. Under Long and his successors, Louisiana became America’s first regulatory welfare state, dominated by wealth redistribution policies (“Every man a King”). The anti-business attitudes, the ”tax the rich” slogans remain very popular in Louisiana. 

 

And the results of those populist policies have been disastrous. Louisiana and New Orleans were at one time prosperous—the leading communities in the South.  Louisiana’s natural advantages made it a major port and that role stimulated the growth of regional banking and other financial services.  Oil and other natural resources were plentiful, and, of course, tourism and hunting and fishing were added assets.  As a result, Louisiana prospered for some time, even though its politics and its policies were increasingly destructive. 

 

However, over the past 50 years, industries have sought to shift their operations to more favorable climes.  Houston became the nation’s oil capital and grew far more rapidly.  Indeed, Houston is now sheltering refugees from New Orleans.  Atlanta became the South’s commercial capital and Charlotte its financial capital.  Even Louisiana’s natural advantages faded as shipping firms—finding corruption rampant—sought to move their goods through other ports wherever possible.  Populist policies have consequences: A politicized economy becomes too often a corrupt one.  Louisianians sometimes joke:  “We’re a state that does not tolerate corruption; we insist on it!” Amusing, but tragically true.

 

Yet, this disaster as the one before it, gives Louisiana a new chance. Louisiana can rebuild its tax, regulatory, legal, and welfare policies as it also rebuilds its physical structures.  But to do so it must liberate the creative talents and energies of its people.  Louisiana has for too long allowed itself to become a banana republic (absent, of course, the bananas).  It is time for the state to use this disaster to displace the failed populism that for so long has crippled its economy.  

 

Yet the change of policies must await the alleviation of the immediate plight of the area and its residents.  Louisianans already live in an overly politicized world, so I would urge you, if you have not already done so, to consider a donation to a charitable relief group of your choice.  Fran and I have donated to the Salvation Army.  Several CEI staffers have selected the Red Cross or Catholic Charities, among other groups. But do consider this request.  Realize also that for disaster relief—much as for public policy—cash contributions are generally the most useful form of aid.    

 

Some have suggested that New Orleans may never rebuild, that the city will become a ghost town like the abandoned mining cities of the West.  As one who has lived in and loved this area, I believe this would be a tragedy. Louisiana can rebuild, New Orleans can again become the City that Care Forgot—if we care, and if its citizens abandon the populist policies and the fatalistic attitudes of the past.  Let us hope they do.