What has happened down here is the winds have changed, Clouds roll in from the north and it started to rain. Rained real hard and it rained for a real long time, Six feet of water in the streets of Evangeline.
The nation was in the August dog days of a boring, hot summerjust your every day distant wars, White House investigations, missing persons’ exposes on Fox News, massive bankruptcies and pension looting, and annoying gas prices and the like.
The President was on vacation at his ranch in Crawford, Texas, trying to ignore the distraction created by Cindy Sheehan and a little tent city called Camp Casey. The White House had announced that President Bush was reading John Barry’s The Great Influenza. Perhaps he should have picked another book by Barry, Rising Tide: The Great Mississippi Flood of 1927.
Why? Because, by the end of August, the wind had changed, and the tide was rising. Hurricane Katrina lurched across Florida, stumbled south of the keys, turned north and slammed into the Gulf. The rest of the horrific story played out on 24-7 news channels. I’ve experienced a few hurricanes. This one was different. Rita came ashore soon after.
Mass misery emerged from the devastation of Katrina, bringing with it the shock of more than 1,300 deaths and thousands of injuries; the destruction of many Gulf communities and the flooding of New Orleans; a stunned disbelief in the inability or neglect of FEMA and the federal government to respond to disasters; a clawing agony for the ongoing plight of the refugees; and distress at the energy crunch that swept far beyond the gulf.
How badly mangled have the federal response and recovery efforts been, in the main? To paraphrase Ken Patchen (Journal of Albion Moonlight), “Give me just one speck of proof that this couldn’t have been handled better by a half-dozen drugged idiots bound hand and foot at the bottom of a ten-mile well.”
Most of us are now squeezed by the higher gas prices, and many of us will get whacked by natural gas price hikes this winter. Business magazines report that shortages could close factories and schools (Denver Business Journal, 10/05). Meanwhile, ExxonMobil declared a $10 billion profit for the third quarter, a 75% increase; as did other petro giants. Seems the ghost of Enron is hard to banish.
The federal government has already allocated $70 billion, and may spend up to $200 billion in assistance, clean-up and reconstruction. These commitments have been slowed down and complicated by federal scandals, budget and political problems, piling debt, and a huge money ship steaming daily to the sands of the Tigris and the Euprates.
As a point of reference, the post-WWII Marshall Plan, based on the share of America’s gross domestic product then, would have cost $200 billion today, according to Anthony Gottlieb, who reviewed the book “Postwar” in the New York Times book section (10/16). Gottlieb attests that Western Europe witnessed dramatic improvements as soon as a decade after the devastation. If there is some uneasiness about federal leadership in this disaster, compared to, say, Truman and Eisenhower, it’s understood.
Meanwhile, there’s been a growing brou-ha over the re-colonization of New Orleans, given the large numbers of residents who are unable to return. The people of the Gulf, their lives already a catastrophe, are not protected from the vultures now descending on the coast. Many local workers and refugees from the storm are being overlooked for the initial clean up and construction jobs. At the same time FEMA threatens to cut off hotel/motel payments to people scattered all over the country, landlords are preparing evictions for thousands of residents who can’t return, and refuges from the N.O. 9th ward and elsewhere fear their homes will be bulldozed.
A number of sizable no-bid contracts were let to Halliburton, Bechtel and other mega-corporations. The Governor of Louisiana urged FEMA to overturn the contracts, as they run counter to the local contracting/hiring preferences of the Stafford Act. As of mid-November, 5.4% of the contracts had gone to Louisiana firms, 3.45% Mississippi, 5.15% Alabama (Gannett). Local business leaders, including minority firms, screamed they are not being deployed for reclamation and re-building, and, as of 12/5, only 2,063 out of 28,540 small businesses that had applied for SBA disaster loans had loans approved.
In many parts of black New Orleans and rural Mississippi, the economic situation was dire before the storm. Mississippi and Louisiana never fully recovered from the 2001-2002 recession, with Mississippi at 6.7% unemployment and Louisiana at 6.1% before the storm. Poverty rates for the area were 19.4% in Louisiana and 21.6% in Mississippi. And their pay was 19-28% below national averages, respectively. (Tarpanian, LRA Online, 11/05).
If the controversy is somewhat reminiscent of the sad beautiful song “Louisiana 1927”, by Randy Newman, John Barry reminds that that flood clobbered seven states, killing hundreds and flooding one million homes. “By August 1927 the flood subsided. During the disaster 700,000 people were displaced, including 330,000 African-Americans who were moved to 154 relief camps. Over 13,000 refugees near Greenville, Mississippi were gathered from area farms and evacuated to the crest of an unbroken levee, and stranded there for days without food or clean water, while boats arrived to evacuate white women and children. Many African-Americans were detained and forced to labor at gunpoint during flood relief efforts” (Wikipedia).
Barry asserts that the fallout from government negligence–then– sparked a demand for a stronger federal government. The disaster was said to have helped elect Herbert Hoover, who ably led the Red Cross effort. But as long-term federal promises were reneged, and as the Depression grew, political support shifted to Huey Long in Louisiana and the New Deal nationally, and African-Americans shifted allegiance to the Democrats.
The “re-colonization” of the Big Easy and the Gulf is, similarly, a watershed for all Americans. We will either allow tens and tens of thousands of people to be blown away permanently to the Creole Diaspora, or we will fight for their rights to live and work in dignity, we will help defend New Orleans. The President has proposed a Gulf Opportunity Zone, or GO Zone. It might as well be called a War Zone, as the bureaucratic battering of the people of the Gulf has already yielded combat fatigue, the featherbedding and carpet-bagging is in full bore, and the rip-offs are mounting.
This article will describe problems with the reconstruction process, examine a few of the models for response to major disasters, and suggest some targeted strategies that focus resources on the needs of people and communities. People in the Gulf are still waiting for “the leader” to sort out this mess, as long-time resident Cokie Roberts confided on NPR recently. They’re still waiting for the federal cavalry. But like New York City during 9/11, the federal cavalry may not show for awhile. Local residents, the army of the Creole Diaspora, and a new generation of working class heroes will have to take the reins, and pressure governments to fund a strategy that is focused on the needs of the people and their communities, not just those of big business and big real estate holders.
The Re-colonization of New Orleans?
The river rose all day, the river rose all night, Some people got lost in the flood, some people got away alright. The river have busted through clear down to Plaquemines, Six feet of water in the streets of Evangeline
Bruce Herman is an old friend who runs the National Employment Law Project (NELP). He’s alarmed at the abuses evidence already coming from this brave new world in the Gulf: “Displaced residents of the Gulf Coast, disaster responders, and workers seeking jobs in the devastated areas face uncertain labor and employment protections In the short time since the disaster, stories are already emerging of worker mistreatment and corporate attempts to circumvent still-existing worker protections.”
The stories from the Gulf are reminiscent the 1927 floodworkers being imported by unregulated contractors are sometimes not being paid; no training for workers, exposing them to contaminants; fraudulent “contract work” status, etc. As NELP points out, workers still have the right to be paid, to have safe work conditions, to have family leave for sick members, and to get workers’ compensation benefits if injured.
The controversial roll-back of prevailing wages by Bush was overturned after unions fought it, and after Louisiana electricians testified that they had lost their jobs at Naval Air Station-Joint Reserve Base in Belle Chasse. They had been asked to train unskilled and, in some cases, undocumented foreign workers.
As John Barry bemoaned in a recent NYT op-ed, N.O. is losing the public works structure and civil organization required for a planned long-term response. With the feds refusing to guarantee municipal bonds, the city, state and large institutions are laying off 10-15,000 employees, with more layoffs and budget cuts are on the way. With Congress refusing to budge on waivers to the new bankruptcy rules, thousands of already crushed residents will be hammered by creditors.
A slight diversion might be useful to put the Gulf crisis in context. New Orleans and other gulf-towns are not alone in their fears that the federal government is abandoning them. Rust-belt and even not-so-rusty cities have long struggled to keep their communities surviving. As U.S. urbanization matured in the 20th century, an increasing number of absentee industry owners closed urban divisions and plants. Production was later shifted from the city to the suburbs, then to the south, and finally, across the southern border and across the ocean to Pacific Rim work colonies. Over time, and neglected by finance barons, and forgotten by the federal government, many urban centers declined (became “devalorized”).
A couple of astute authors predicted that, ironically, once rust-belt cities had decayed enough, i.e. “de-valued”, there might be a “re-colonization” some day. “Two of these phenomena represent a seeming departure from the past: revalorization of the urban core; and the establishment of foreign branch plants or subsidiaries that export their products back to the country of ownership” (Susan and Robert Fainstein, in Economic Restructuring and Political Response, Sage, 1989).
This past year, in fact, CFO Magazine reported: “As political pressures mount, look for less-skilled U.S. workers to become more attractive to global companies. The hot spots? Depressed manufacturing centers such as Detroit and Cleveland, says Richard Samson, president of EraNova Institute, a management consulting company (sometimes espousing competitiveness mind-babble). ‘Many unemployed workers and their spouses are willing to man phones or keyboards at competitive rates, minus foreign problems or political flak’, says Samson.”
Samson is not hinting simply at tax-advantaged enterprise zones, but the replication of “new work colonies” that are popular in third world countries. The phrase “minus political flak” is code for non-union, sub-minimum wage jobs with no benefits, similar to the crappy jobs at highly mobile Call Centers springing up around the country. The idea of a “Gulf Enterprise Zone” may not be so great if the result is contingency jobs paying poverty wages and no benefits, and requiring government food stamp and health care subsidies.
Heartland cities-and N.O.– have also shrunk. Pittsburgh and another 12 of the nation’s 100 largest cities and hundreds of smaller towns (not just in the Rust Belt) declined dramatically in population since 1950. New Orleans had already joined this list of lost cities, losing 109,000 residents from 1970-2000. Now it’s decimated.
The scramble toward any development at any price has had many distressed towns lining up, and not just Pittsburgh but also cities like Chicago (with 6 EZs and 129 tax increment zones), San Diego and Atlanta that are in dire fiscal shape. (CFO Magazine, 2/05, page 41). Many workers in the Gulf will jump at any opportunity, just as laid-off, ruined steelworkers might from Youngstown. (Maharidge, “Rust and Rage in the Heartland”, Nation Magazine, September 20, 2004).
And where will people work? Over 600,000 Gulf workers have lost their jobs. Over 100,000 firms are out of business. Some may be able to return to the hospitality sector, if they can locate housing, but what about others? Nationally, the trends are not good. On top of 70-80,000 job cut announcements from GM, Delphi, Merck and probably Ford, three million manufacturing jobs have been destroyed in the last half-decade, the most severe decline in decades. The promise of a technology jobs paradise is also gone, as once well-paid, educated tech workers have joined the jobs exodus “among a wave of Americans taking to the highway to preserve a middle-class life.information workers are having mobility thrust upon them as companies change the way they staff computer-related jobs. Foreign workers are cheaper for some basic programming and technical jobs, and short-term contract workers give companies more flexibility to add and subtract employees as needed.” (Schneider, Washington Post, 11/9/04).
Günter Grass warned of this dark downturn in the economy, and what it portends:
“We all are witnesses to the fact that production is being demolished worldwide, that so-called hostile and friendly takeovers are destroying thousands of jobs, that the mere announcement of measures like the dismissal of workers and employees makes share prices rise, and this is regarded unthinkingly as the price to be paid for ‘living in freedom’. The consequences of this development disguised as globalization are clearly coming to lightWith the consistently high number of joblessthe hope of full employment has evaporated. (Arthur Mitzman, Counterpunch, NYT citation).
Steinbeck wrote about the tragedy of the depression and Dust Bowl. There are no great authors yet who have charted the economic destruction from the rust bowl, now stretched over a third-century. We’ve lost a generation of skilled workers, refugees from a lost American dream. We’re losing another in the Gulf.
Fables of the Reconstruction
Louisiana, Louisiana, They’re tryin’ to wash us away. They’re tryin’ to wash us away.
Governor Kathleen Blanco testified before Congress that in Louisiana, 200,000 homes were destroyed, 81,000 firms shuttered or displaced (41% of the state’s firms), much of the transportation infrastructure down, the region’s institutions destroyed, many communities in ruins. Cities and the state are running out of money or already bankrupt. Mississippi has lost maybe 125,000 dwellings, with damage 150 miles inland from the coast. The Alabama coast suffered some damage as well.
The federal government reported that 2.5 million people had registered with FEMA. A thumbnail at the scale of devastation:
* 90,000 square miles region received federal disaster declarations, a size of the UK
* Economic damages are estimated from $100 billion to $200 billion
* 1 million homes and businesses lost power
* 80% of New Orleans was under water
* New Orleans’ regional jobs have fallen to 337,000, its lowest level since 1965 (Sources: Brookings, N.O. Times-Picayune).
State and local governments have asked the federal government to provide funds toward rebuilding infrastructure—roads, bridges, rail and port facilities, especially the levee systems; rebuilding the housing stock; restoring the wetlands that once protected the area, and backing sizable bond fund programs and other financing tools to increase capital availability to local businesses. There are some federal tax credit programs already enacted for workers, though they are small. Various commissions have been established to help oversee the re-construction.
Governor Kathleen Blanco has requested tens of billions of dollars in federal help to rebuild infrastructure, port and rail systems, institutions, businesses, and housing, and proposed some targeted funds and tax breaks to help workers return. She’s proposed a program similar to the federal Liberty Bonds issued for New York after 9/11. She has requested a $10 billion development fund, as well as funds for a wetland restoration program and improvements to the Cat 5 levee system. She has asked the State Legislature to reorganize state government so as to develop a comprehensive coastal and hurricane protection plan, and instituting uniform construction codes, while streamlining the two dozen levee districts. Blanco has established a Louisiana Recovery Authority to lead rebuilding efforts. The legislature has passed a package addressing some issues.
Mayor Ray Nagin has proposed a major overhaul to the levee system and other infrastructure repair projects, including a new rail system. He has upped the ante in Congress to help workers return to the city, proposing sizable income and hiring tax credits for workers. The Mayor has also established the Bring New Orleans Back Commission, which recently released recommendations by the Urban Land Institute (ULI), a for-profit think tank for the real estate industry. The ULI called for the creation of another recovery authority, a state-chartered corporation with broad authority over the city’s finances, including all recovery funds, the city budget, and taxation. The proposed seven-member panel would have three members named by the President, two by the governor, and two locally-appointed by the mayor and city council. Parts of the plan have already been severely criticized by residents. GOP Congressman Richard Baker of Baton Rouge has proposed a similar corporation, all appointed by the federal government.
Governor Haley Barbour has proposed a $33 billion in federal costs for rebuilding Mississippi, and has focused on the private sector undertaking the lead. He adopted the President’s plan for the GO Zone, promoting business incentives as the primary driver of recovery. He has asked Congress to fund a program for flood victims who didn’t have flood insurance. He has also started a Governor’s Commission on Recovery, Rebuilding and Renewal, which will lead the state’s efforts in rebuilding affordable housing, supported planned communities less dependent on transportation, etc.
President George Bush made a major speech in N.O. on September 15 that proposed a federal leadership role in the largest disaster recovery effort in U.S. history: the GO Zone of business tax breaks aimed at re-hiring workers; Worker Recovery Accounts of up to $5,000 each for evacuees to use for job training, education, and child care; an Urban Homesteading Act, under which low-income people could get free federal property in exchange for promising to build a home on the site. ”Federal funds will cover the great majority of the costs of repairing public infrastructure in the disaster zone, from roads and bridges to schools and water systems,” Bush said. ”Our goal is to get the work done quickly.”
On November 1, Bush appointed Donald E. Powell, chairman of the Federal Deposit Insurance Corp., as the new czar for the federal government’s long-term recovery efforts. Bush also established a Gulf Coast Recovery and Rebuilding Council at the White House, led by Allan B. Hubbard, head of the National Economic Council and assistant to the president for economic policy, according to the Washington Post.
But a number of critics have questioned the urgency of the White House and Congress, given the length of time it took for serious budget proposals. Most of these efforts, other than an initial $65-70 billion allocated, have become bogged down in Congress.
Louisiana Senators Mary L. Landrieu and David Vitter have proposed a $200 billion-plus aid package. Their proposal includes:
* $40 billion on Army Corps of Engineers projects in Louisiana, through a proposed “Pelican” Commission of 9 members, with a presidentially-appointed chairman, the Corps of Engineers chief, the head of NOAA and six Louisianans, including the governor and the state’s Mississippi River Commission member.
* $50 billion in Community Development Block Grants for communities hardest hit
* Billions for rebuilding the bridges and cleaning Lake Pontchartrain
In recent Congressional budget skirmishes, Senator Thad Cochran of Mississippi has proposed $35 billion for immediate rebuilding efforts, twice the size of the White House proposal, and including community block grants to help homeowners without floor insurance rebuild their homes. The Republicans in Congress are supporting the tax-driven recovery bills proposed by the President. Senator Kennedy has proposed legislation that would protect workers in the region, prioritizing local workers and businesses for clean up and redevelopment. The Black Caucus has proposed a victim restoration fund, modeled after the one for terror victims, managed by a special master, along with grants to help local institutions and businesses, and extended health care and education for victims.
The New York City 9/11 Response Model
One of the Congressional hearings focused on the federal government’s response to the 9/11 tragedy. While the overall destruction to the Gulf was much wider, the recovery efforts after the 9/11 attack on New York City offer some guidance on strategies that worked well and some that didn’t.
After 9/11, the city, already in a recession, plunged into a deeper recession that didn’t end until the end of 2003. The city suffered an $87 billion loss, city tax revenue plummeted $1.5 billion, and New Yorkers lost $2.8 billion in wages. There were 80,000 New Yorkers who lost their jobs, 60% low wage earners who averaged $11 an hour. Another 76,000 workers avoided layoffs by working and earning less. More than half the layoffs came from five industries, mainly connected to tourism, hospitality, etc. 20,000 finance jobs were moved out of the city (Fiscal Policy Institute). Recovery has been uneven, as several blue-chip institutions fled to New Jersey, and many of the jobs never returned.
The federal government committed $5 billion for victim’s families and agreed to spend $21 billion in federal aid$6.3 b. for emergency response, $4.4 b. for economic development, and $9.7 billion for long-term rebuilding. Some New Yorkers claim that the feds never fully paid up, with billions perhaps promised over future years but not yet in hand. Millions of dollars in special Liberty Bonds were dedicated to new commercial building construction downtown and a “Liberty Enterprise Zone” was funded by the federal government to promote economic revitalization through tax credits, corporate incentives, etc. The overall downtown strategy was managed by the Lower Manhattan Development Corporation (LMDC). (Gotham Gazette)
However, there were questions about the accountability of where and how the money was spent. A major accountability assessment of the overall strategy by the “Labor Advocacy Network to Rebuild New York” found that the LMDC favored big business and real estate interests over broader community needs, awarded contracts to recipients who had conflicts of interest, was not transparent in it’s spending processes, did not have a diverse board to oversee rebuilding, and limited public input, especially from low and middle-income residents. Meanwhile, Manhattan is still losing corporations to New Jersey.
And, more recently, a four-month New York Daily News investigation into the $21.4 billion in federal disaster recovery aid “has uncovered widespread waste, greed, lax rules and incompetencedetailed how hundreds of millions of dollars were spent on projects that seemingly had nothing to do with 9/11 and lower Manhattan, how millions went to fat cats and firms that were barely hurt and how hundreds of small and less powerful business entities received barely enough to pay a month’s rent.” Organized crime moved in on the Ground Zero debris cleanup, like some of the vultures in the Gulf.
As a primary engine to rebuild the economy, Bush is suggesting that the GO zones would provide tax credits to businesses that hired workers, capital gains breaks for investors, and incentives for workers in the region.
But a writer for the Washington Post points out that the goals of the “Go-Go Zones”-a conservative trickle-down, “bootstrap” approach that utilizes tax tools-will not benefit workers quickly enough to make a difference, and runs counter to the clear need to make large scale direct investments in the region (Block, Washington Post, 10/2/05). Bipartisan in popularity, enterprise zones have a poor to mixed track record. Some have attracted new businesses to distressed areas, but many have also flopped. Numerous studies, including ones by the non-partisan Congressional Research Service, and by Fisher and Peters (Tax Incentives, Enterprise Zones and Job Redistribution 1990-1997), dispute the long-term cost effectiveness of zones. U.S. enterprise zones are among the faulty and inefficient corporate tax subsidy programs exposed by Greg LeRoy in his books and articles, The Great American Jobs Scam, In Search of the Great Pumpkin, etc.
Jack Kemp, an architect of EZ’s, and HUD Secretary under Reagan, also testified before Congress on the disaster and complained that the zones could be more effective if they were had more money and were “juiced up”. He also praised the “Maquiladoras Zones” on the Mexican side of the U.S. border, U.S. and foreign factories taking advantage of cheap labor and tax breaks. Fueled by the failed promise of NAFTA, the Maq Zone is infamous for its substandard working and living conditions-some housing basically no better than hovels with open sewage, breeding higher illnesses. As the Federal Reserve Bank of Dallas noted in January 2004, a major downturn reduced Maq employment by nearly 277,000, or about 21 percent between October 2000 and March 2002. Jobs fizzled again after the Spring of 2003.
Work and living conditions in the Maq zone were horrible in the good times:
“According to a Workers University of Mexico study, maquiladora workers earn between $3.50 and $5 a day – enough to do little more than survive in the border towns, where the cost of living is 30 per cent higher than in the rest of the countryLife inside the factories is often grim. ‘Workers labor from sunrise to sunset. They never see day light,’ says Ojeda, who was a maquiladora worker for 20 years. ‘They are sometimes exposed to toxic chemicalsThey rarely see their families; often wives will work for one shift, then switch with their husbands who take the next shift.'”The maquiladoras are one manifestation of the global sweatshop,” says Larry Weiss, labor and globalization program director at the Resource Center of the Americas. (Soriano, Mother Jones, 11/24/99).
The New Orleans Business Council has informed Newsweek that that maybe they can “use this catastrophe as a once-in-an-eon opportunity to change the dynamic”. What does that mean? Does it mean lower wages, no housing for poor people, a gentrified city, a “whiter city”, as a HUD official opined? Is the GO Zone a vehicle for a new work colony? As Naomi Klein reported, quoting a labor organizer in the Nation: “Now the developers have their big chance to disperse the obstacle to gentrification-poor people.”
After the Storm: A Focus on the People
President Coolidge came down in a railroad train, With a little fat man with a note-pad in his hand. The president say, ”Little fat man isn’t it a shame, What the river has done to this poor crackers land.”
The Netherlands suffered a massive flood in 1953 that killed 1800 people. The Dutch had been fighting the sea for centuries. The nation built a massive $8 billion system of high tech dams and barriers after 1953 that took _ century to build. The “state of the art”, the system was also designed to adapt to the natural flows of the inlets and rivers.
In other disasters, such as the 1900 hurricane that hit Galveston and the 1906 San Francisco earthquake, the federal government acted quickly to secure public safety and confidence, invest in rebuilding, and put homeless and unemployed people to work in the rebuilding efforts (in SF). The feds also cooperated with local governments in adopting rebuilding strategies that militated against similar disasters (Galveston’s sea wall, new building codes and methods in SF). Local governments acted quickly after these disasters to protect the interests of its citizens, taking on the insurance companies in SF and implanting an anti-corruption program in Galveston. (Brenasek, NYT, 10/31/05). There are also many models for longer-term regional revitalization, something the Gulf communities will have to strongly consider. Most were created as top-down agencies. Generally, economic development agencies have focused on road building, infrastructure development and business subsidies, rather than re-employing workers, endeavoring to lift workers up out of poverty or setting positive workforce and training standards.
The Tennessee Valley Authority (TVA) was created in 1933 by FDR and Congress as part of a vast scheme of regional planning and development. The TVA was directed to address the total resource development needs of the region, taking on the problems presented by devastating floods, badly eroded lands, a deficient economy, and a steady out-migration-all in one unified development effort (Columbia dictionary). The Appalachian Regional Commission (ARC) was created in 1965 by President Johnson to address many problems of the mountainous east and south: isolation, poverty, low educational attainment, poor health-care delivery systems, and increasing deterioration of the physical environment. The ARC been credited with helping improve the economic and social indicators in Appalachia this last quarter-century, and the number of distressed counties in the region has fallen.
The Delta Regional Authority (DRA) was created to address similar problems across 240 counties and parishes in an eight-state region of the Mississippi Delta, and was created by President Clinton. The DRA has only begun to make infrastructure investments within the past few years. Amy Glasmeier, a friend and professor in regional studies at Penn State, noted that years ago, the Appalachian and Delta regions were similarly impoverished. “Now they’re very far apart,” she says. “Standards of living, quality of life, levels of education, square miles of road – you name it. The Delta is still way behind” (Breed, AP, 6/16/02). Unfortunately, the Delta does not cover many of the gulf coast counties.
Many of these initiatives have also done considerable collateral damage. While the TVA helped the south recover from the depression, it ruthlessly uprooted farmers and displaced communities in its path toward becoming the largest provider of electricity in the U.S. While the ARC has funneled more than $8 billion in additional federal spending to the member states, highways often became the end all, be all.
Mike Tidwell’s book, Bayou Farewell, warns that the Corps of Engineers, with the help of local pols, contributed to the sinking of the city by wrongly harnessing the Mississippi River, resulting in the loss of wetlands and barrier islands. The levee system was part of a federal flood control policy, ultimately prioritizing the shipping and the oil business. Before Katrina, Congress had finally begun to act on the problem, funding a wetland restoration program against White House wishes, setting aside $500 million of the $14 billion needed for long-term reclamation of wetlands and barrier islands. Tidwell notes that $14 billion equals 6 weeks of spending in Iraq.
And a major Brookings report on the disaster (“New Orleans After the Storm”, October 2005) makes the point that the “the federal hand in New Orleans’ development has been extraordinary, significantly influencing (in partnership with state and local decision-making) how the metropolitan area grew and Katrina’s impact.” Brookings asserts that Federal leadership in levee, highway and public housing construction, and the money attached, pushed development not only into risky, swampy lands, but also had the effect of “red-lining” the black and poor populations into the lowest, most flood-prone areas. Three studies of the levee failures post-hurricane determined that the worst flooding failures were caused by shoddy Corps-supervised levee construction.
The Brookings Institute also compiled a useful assessment of the rebuilding challenge. Its authors promoted high-quality, sustainable development, transforming poor neighborhoods into livable ones, and moving the economy from low-road to high road. The researchers for Brookings especially honed into the problems of rebuilding N.O., and are pushing participatory planning, restoring the delta, housing vouchers for displaced families (to enable mobility), first right contracting and hiring for resident firms and residents, bringing back the universities, enlarged training systems, etc.
The federal government can and has, in the past, provided emergency funding to large numbers of dislocated workers impacted by mass layoffs. One well-funded program that actually worked was geared to helping people who were victims of a federal decision. In the late 1970s, as a near-depression hit the region, the Carter Administration and Congress expanded the Redwood National Park (RNP) in Northern California by 48,000 acres, dislocating thousands of local workers in the logging, milling, and transportation industries. The Redwood Employee Protection Program (REPP) provided up to 70-80% wage replacement for over 6,000 workers and their families, and full health care coverage, full education benefits, and a bridge to retirement for workers near the end of their working life, all for up to six years. A 2 and _ year legal campaign in federal court to defend the program, launched by the lumber unions and the community against the Reagan Administration, resulted in a $100 million victory for the workers in the end, _ the cost of the bail-out for the corporations for their partly clear-cut timberlands.
In New York, labor organized some impressive targeted initiatives to help jobless and homeless residents after 9/11. The Emergency Employment Clearinghouse Program (EECP), managed by the Consortium for Worker Education (CWE), helped locate 7,000 new jobs for laid off New Yorkers, provided education and training that helped 8,000 land a job, and provided $15 million in emergency aid that enabled more than 300 businesses to survive and retain 3,000 workers. The program targeted $7 million in services to the Lower Manhattan community, providing jobs and assistance to small businesses in devastated communities. The program was funded with a $32.5 million dollar grant from Congress that led to a broad partnership to help the displaced workers of the city.
As part of an innovative program for small and mid-sized businesses, the EEC provided short-term wage subsidies to stabilize struggling businesses and help them to keep their workers employed, rehire those who had been laid off, or hire new workers. EEC provided waged subsidies of between 50 and 60% of an employee’s base salary for 90 days. Specialists were hired to work with the various key impacted industry sectors, and participating employers had to provide matching funds. To ensure accountability,
“the EEC did not simply write checks. It required businesses to first provide detailed financial information, including tax returns and payroll information documenting a negative economic impactAfter their eligibility was established, an EEC panel reviewed and selected the participants. Employers were required to file monthly invoices to the EEC to ensure that the subsidies were going to real employees.”
Beyond these federally-endowed agencies, there are hundreds of national, regional and local “bottoms-up” for-profit and non-profit organizations that are successful and accountable to grass-roots leadership that have a long list of credentials in housing, economic, investment, health care and other community-oriented development. However, most have been under increasing budgetary attack since 2001.
A new brand of grass-roots regional development groups arose to confront economic crisis, dislocation and global restructuring since the late 1970s in cities like my town, Pittsburgh, Chicago, Milwaukee, New York, Seattle, Knoxville, etc. They have challenged unilateral corporate divestments, irrational plant closures, and harmful workplace practices, putting in place well-regarded systems to retain and buy-out distressed firms or footloose facilities, employ worker ownership, and incorporate new high performance governance and workforce systems. These increasingly professionalized development and re-investment initiatives learned to:
“spotlight the ‘high road’ approach to area revitalization. The well-worn ‘low road’ cuts wages and benefits, privatizes public services, sends jobs overseas, and avoids or eliminates unions. In contrast, the ‘high road’ sees enterprise and community human resources as sources of competitive advantage to be developed, and treats workers and unions as partners in achieving regional prosperity.” Whalen, Perspectives on Work, Summer, 2004.
And if average Americans felt helpless about being able to help New York dig out after 9/11, the labor movement found a tool for economic recovery that benefited local residents: our pension funds. A coalition of union and public pension funds stepped up efforts after 9/11 and made substantial investments of labors’ capital to rebuild the City in a way that focused on the needs of working and low-income people.
The AFL-CIO announced in 2002 that its Housing and Building Investment Trusts (HIT-BIT) would open a permanent New York City office and allocate a minimum of $750 million for housing and commercial development projects to help the city recover, focused on affordable housing for working families. HIT made four multifamily investments-real estate and mortgage investments– in 2002, five in 2003, and one in 2005, across most of the boroughs, including lower and mid-Manhattan, the Bronx, Bed-Stuy, and Coney Island. Investments included apartment complexes, convertible apartments, and coops, with 9,912 of the 10,625 property units targeted to low or moderate-income residents of the city. BIT made an additional couple of commercial investments. HIT-BIT’s investments to date are $683.9 million, with total development costs of $1.4 billion.
The New York City and State Retirement Systems (NYCERS and NYSLRS), with $42.7 billion and $134.4 billion in assets, respectively (6/04), have also allocated hundreds of millions into investments in low-income, senior and other special housing needs, often targeting the housing needs of their public service members, who are required to live in the city. The State system has also made substantial investments indirectly into small businesses in the city and statewide (Hagerman, Clark and Hess, “Pension Funds and Urban Revitalization Case Studies”).
These investments have led to the hiring and training of thousands of union workers to build thousands of new housing and commercial units to fill the city’s critical needs for affordable housing and economic development. Projects financed by these investment initiatives usually adhered to a responsible contractor policy that set standards for wages and benefits. Returns on investment have equaled or beat appropriate indexes.
And besides pension-financed real estate organizations, there are many new “Heartland Funds”, private equity funds capitalized by union pensions, targeting prudent investments in small-middle size businesses, while paying good wages and benefits to working people. These “worker-friendly” funds are more sensitive to communities and the sustainability of business investments. These funds also have billions in assets.
As a growing source of responsible private capital investment, public pension funds are beginning to have a large effect on regional economies. When deployed prudently and managed professionally, according to researchers for the Pension Funds and Urban Revitalization Project:
Public pension fund investments are seeding urban renewal in cities across the United States. Studying the $193.3 billion California Public Employees’ Retirement System, Sacramento, and the $91.3 billion New York City Employees’ Retirement Systeminvestment in underserved capital markets can help achieve “appropriate” risk-adjusted rates of return while simultaneously promoting economic growth in inner city areas.
“When the focus is on returns in urban revitalization investment, pension funds concentrate on the best deals available rather than on social outcomes,” said Ms. (Tessa) Hebb in a news releaseIt can be argued that such targeting allowed CalPERS to enter the California urban real estate market before it became ‘hot,’ resulting in both good returns to the fund and significant urban revitalization.” (Pensions and Investments Online, 11/16/05)
Workers can set higher standards when others fall down on the job, as Mike Musuraca, union researcher and Trustee of the NYCERs Fund explained after 9/11, shortly after his lower Manhattan office was taken over for the relief effort:
“We are here today because of a shared conviction that the deferred wages of working men and women in the pension funds we represent should be utilized in a way that serve the long-term interests of those men and women and working people everywhere We must find ways to keep the interests of working people at the center of the City’s rebuilding effort, as well as of the economic development in the nation and the world.”
Let’s Rationally Re-Build New Orleans and the Gulf
These examples show that new alliances and alternative strategies to rebuild the Gulf are practical and possible. A broader, inclusive approach is critical. Who will oversee the billions in federal aid, and ensure equity, consistency and accountability in the recovery efforts? Who will ensure that residents and working people of the region will benefit? Will there be a serious examination of what Tidwell calls the disease, re-aligning the channeled Mississippi back towards a natural flow, replenishing wetlands? Who will lead the fight to re-build the levees to the standards of the Dutch?
A new coalition of low-income groups in New Orleans, has taken a stand:
“The people of New Orleans will not go quietly into the night, scattering across this country to become homeless in countless other cities while federal relief funds are funneled into rebuilding casinos, hotels, chemical plantsWe will not stand idly by while this disaster is used as an opportunity to replace our homes with newly built mansions and condos in a gentrified New Orleans.” It is calling for the victims of the catastrophe to participate in the process of rebuilding.
There are lots of proposals to rebuild the region, though there are huge impediments at every step: getting public leaders to embrace broader participation in the advisory processes, getting people re-housed so companies can re-hire, getting the insurance companies to pay on claims, getting insurers to cover new construction and companies.
The Gotham Gazette posed some interesting lessons learned from the NYC rebuilding efforts post-9/11: leadership matters, especially when it is engaged; public discussion and participation helps tremendously; don’t let large property owners dominate the planning; deal with the environmental causes and impacts of disaster; protect local poor, black and immigrant communities that are the first to be shafted.
A national gulf alliance needs to take this big bloated bull by the horns. Local governments and communities, labor, businesses and churches can work together to rationally rebuild the Gulf, but need all of our help. We need to rock the federal government and all elected leaders into fulfilling their duty. What do the people of the Gulf need? They need all hands on deck:
Rebuild the Levees to a Category Five, and Restore the Coastal Wetlands Call the White House and Congress. It is a fundamental demand. It may take a decade or more, like the massive system in the Netherlands, but it must be done. The federal government must mitigate its own negligence, the failure to dig deep-enough footers for the levees, a human error that is now widely blamed by scientists and engineers for the worst flooding problems that occurred after the hurricane.
Support Urgent Survival Needs and Protect the Rights of Victims Seven “Worker Centers” have been established in four-five states by Labor to fight for storm victims’ rights to unemployment benefits and FEMA assistance, and to ensure workers and residents are not screwed. They are working to find emergency housing and re-connect utilities, helping people find jobs and services, while demanding community participation in the rebuilding efforts. The Centers need volunteers and more funding (call 877-235-2469). The government should do its job and enforce wage and health and safety standards, and put controls on mortgage foreclosures, etc.. Support these struggles and other advocacy centers, demand temporary housing so workers can come home, and don’t let FEMA or insurance companies off the hook.
Put People to Work Rebuilding Gulf Communities The scope of the disaster requires that a major public works program like the WPA or, a Gulf Conservation Corps, be launched to employ the residents of the Gulf in clean-up and rebuilding, and reclaiming the natural barriers to storms and flooding. Workers and communities should also be encouraged to set up co-ops and community corporations (CDCs) to address problems in their neighborhoods if local governments and companies are overwhelmed. Government must expedite temporary housing, including the mothballed mobile trailers, so refugees and local workers can be recruited to re-claim homesteads and neighborhoods and restore services. Some unions are establishing no initiation/quick training programs for that purpose.
Establish a “Superfund for Gulf Storm Victims”, funded by the federal government, that provides income replacement/training funds for workers who can’t find work; ensures affordable, safe housing and emergency health care coverage; all to help residents and incentivize victims to return. REPP allowed thousands of certified workers to maintain a livable lifestyle, or transition to other occupations, in the impacted counties of Humboldt and Del Norte in California. Workers in adjoining rural counties hit by the economic downturn suffered much worse, with some timber towns experiencing 50% unemployment.
Fund Government Stimulus Programs that provide targeted tax rebates to low and moderate income families; tax credits for home ownership and renting; and accountable tax credits to businesses that hire and train residents and victims of the storm. The NYC Emergency Employment Clearinghouse program for business assistance worked because the program did its research on specific business sectors that were hurt, and the funds focused on retaining workers and targeted a short-term wage subsidy in and toward struggling businesses.
Re-invest in Safer, More Sustainable Gulf Communities by investing in flood/hurricane-proof design and products; by promoting green building, economic and energy efficiency and self-reliance; by partnering with companies and utilities that manufacture locally. There is an opportunity for new or expanded industries in the region, including manufactured housing, steel framing, super-insulation and air sealing products, solar photo-voltaics and wind-power systems, aerated concrete (widely used in Europe), etc. Target long-term investments toward mass transit, renewable energy production, and public health and school re-construction. While prudent investors need to be assured that the levees will be adequately re-built, the federal government should act as an insurer of last resort in order to kick-start efforts.
Retain Key Industries and Re-train Workers Recruit and re-train where necessary the refugeed skilled workers to fill the thousands of vacancies plaguing shipyards, manufacturers and other industries; support industrial retention, diversification and revitalization efforts; and provide assistance for small and middle-sized manufacturers. Where business owners refuse to return or rebuild viable companies, provide incentives and TA to explore employee/community ownership.
The Gulf needs all of our help in forcing our federal government to honor its commitments, but to do so in a cooperative approach that does not emphasize faulty ideology over results. In the meantime, our nation’s pension and institutional funds, including churches, should explore making diligenced investments in the region, setting livable standards for housing and work. Conscientious investors, including foundations and responsible corporations, should explore investments in alternative energy and transportation systems that help diversify the Gulf economy and lessen reliance on the oil economy. All investors can demand that investments are fair to workers, the community and the environment.
Let’s help rationally rebuild New Orleans, Louisiana and the Gulf, together. It is too important to leave to bureaucrats and corporate barons, which is what usually happens in disaster. As union activist Jordan Flaherty wrote from the front lines of the storm, while being evacuated from the front lines of the storm on September 4th: Long before Katrina, New Orleans was hit by a hurricane of poverty, racism, disinvestment, deindustrialization and corruption.In the coming months, billions of dollars will likely flood into New Orleans. This money can either be spent to usher in a “New Deal” for the city, with public investment, creation of stable union jobs, new schools, cultural programs and housing restoration, or the city can be “rebuilt and revitalized” to a shell of its former self, with newer hotels, more casinos, and with chain stores and theme parks replacing the former neighborhoods, cultural centers and corner jazz clubs.
A Good Fight
It is telling that the President’s political fortunes began waning after ignoring the tent city of Camp Casey, before being blown astray by Katrina. A tent city from another era bedeviled another president, the same president who had benefited from his quick action in the 1927 flood. In 1932, some 45,000 WWI Vets denied the promise of post-war bonuses marched on Washington, hopping rails, and hitchhiking from all four corners of the country, during the depression.
The “Bonus Expeditionary Force” (the “Bonus Army”), established a tent city of 15,000 men, women and children, the largest “Hooverville” in the nation, to demand the reneged bonuses. They were violently and sadly driven out by Hoover’s troops, their camps destroyed. Hoover’s heavy hand, a public relations disaster, may have been the last straw for voters, who ushered in FDR in 1932. But the Vets eventually won the promise in 1936, as Congress paid out $2 billion to 3 million vets, setting the stage for the GI Bill.
It might take a similar encampment of the Creole Diaspora at the White House to force the current Hooverites to fulfill their promise. If that’s what it takes, sign me up. Because it’s obvious it will take a sustained campaign to force our arrogant, head-in-the-sand government to do its job.
“On Their Own in Battered New Orleans”, by the LA Times, decries an apparent full-scale retreat of Bush and Congress from funding the reconstruction. It also asserts that FEMA is balking from providing adequate flood insurance in the future, and private insurers don’t want to pay coverage owed. The city and region are being left to the wolves of the invisible hand. And while my article strongly suggests that large institutional investors and others explore major investments as part of a strategy to pool and leverage public and other private resources, it is obvious, as Nobel economic winner Thomas Schelling states, that “There is no market solution to New Orleans” (alone) (12/4, Gosselin). In the meantime, Mississippi Attorney General Jim Hood has sued the insurance industry for failure to pay existing claims, one good sign of enough’s enough.
Conservative columnist David Brooks of the NYT wrote one of the insightful slants on this storm. “Floods wash away the surface of society, the settled way things have been done. They expose the underlying power structures, the injustices, the patterns of corruption, and the unacknowledged inequities.”
Nawlins has given America more than two centuries of its blood, sweat and blues; if we let the nation’s leaders betray her and the Gulf, America will lose a part of its soul. And if a pathetic, cold-blooded brave new work colony is allowed to seed and take root there on the bones of the victims, it will, like a virus, surely spread to the rest of the country. Just as it is folly that our national leaders have neglected the infrastructure of all of our abandoned and treasured cities, claim Felix G. Rohatyn and Warren Rudman (“It’s Time to Rebuild America: A Plan for Spending More — and Wisely — on Our Decaying Infrastructure” Washington Post, 12/13/05).
The wrenching pain still in the country’s gut is the knowledge that so many people are still homeless or part of the Creole Diaspora. Sidney Bartolemew, the former Mayor of the Crescent City put it plainly: “If America doesn’t stand up for New Orleans, I don’t see how we can hold our head up in the world.”
Bush says he believes in an ownership society. If he turns his back on the Crescent City and other gulf towns, allowing them to die, he will own a charge of gross neglect, and his neo-con allies might suffer the fate of Hoover in 1932 for it. After all, he is the homeland security President who staked his legacy on protecting innocent citizens from terror, when in fact, he failed to protect the citizens of the Gulf Coast from water.
New Orleans and the Gulf belong to its people, the Creole Diaspora and the survivors, not to an ideology or market. So much of what they owned has been destroyed or is now being taken away. They are our brothers and sisters, and they are beseeching us, crying for our help. That is not easy, they are proud people. Let’s help them re-build the Big Easy and Gulf. Let’s help them re-claim their home and hope. As the Commander Robert Gould Shaw said in the movie Glory, “We fight for men and women whose poetry is not yet written.” This is a good fight, a fight for the future. We all own this fight.
This article was prepared for the Heartland e-Journal.
Tom Croft is the Director of the Heartland Network, advocates for progressive “workers’ capital” investment policies in the U.S. and Canada. He is also the Executive Director of the Steel Valley Authority, a regional development authority in Pennsylvania focused on jobs retention, community revitalization and investment in the “next generation” of work. He has managed economic crisis projects for two decades in several states. For more on alternative pension investment strategies, and Working Capital: The Power of Labor’s Pensions (Cornell Press, 2001), visit www.heartlandnetwork.org. For more on economic crisis/deindustrialization alternatives, and to obtain the SVA’s Layoff Aversion Guidebook, authored for the federal government, visit www.steelvalley.org. Write to Tom at email@example.com or firstname.lastname@example.org.
© T.W. CROFT, 2005