Political economy: theory and application

Political Economy

Subsidize the rebuilding of homes post-Katrina

Because the majority of the victims of Hurricane Katrina were very poor, many did not have homeowner's insurance or other methods of restoring their houses to livable condition. The government should provide grants to residents to enable them to rebuild their homes, provided they lived in structurally sound enough areas that were deemed not to be at extreme risk should the levees break once again. For families whose homes could not be saved, they should be given financial restitution to enable them to find residences elsewhere, enabling them to rebuild their lives. This policy would bring the New Orleans community together as residents strive to improve their lives. This policy will also give residents some autonomy to choose how their houses could be rebuilt. Specific contractors offering low-cost, subsidized services would be recommended, but residents could choose who would engage in the rebuilding effort specific to their homes.

Volunteers should be used in the rebuilding effort, along with construction companies given incentives to participate such as tax credits. New Orleans should be declared a federal enterprise zone, where all businesses involved in the rebuilding effort or who are rebuilding themselves should be exempt from federal, state, and local taxes for a specified time period. This would empower local businesses and private enterprises in the area. It would encourage new businesses to come back to New Orleans to engage in construction as well as help existing businesses, whose fortunes had been damaged by Katrina.

Affordable housing is an essential component of the health and dignity of all citizens. Too little low income housing exists in the United States, and rebuilding the hard-hit areas with tourist destinations rather than homes would drive entire communities out of the places they had called home for years. It would also cause an influx of indigent residents into nearby areas which could not necessarily support them, causing the unemployment rate to spike in those areas. Helping residents rebuild is the superior strategy.

Of course, this policy has its naysayers. The area hit by the hurricane has been severely impacted, which means that jobs may be difficult to come by for the poorest of the poor, and there are serious concerns as to whether the ability of scientists to gage whether the city could withstand another storm can be estimated. Not all residents will necessarily want to rebuild (nor did all displaced persons have homes). For these individuals, offering them subsidies to resettle in areas so they could find temporary housing and job training, if needed, would be another option that should be made available. But for those who can rebuild, they can become the backbone of the New Orleans -- working to recreate the culture of the city that drew so many people to visit.