President Obama, Recovery and the City that Care Forgot

And yet, I think most of my fellow New Orleanians, while delighted with his visit, were underwhelmed with the President's rhetoric. Too many of us have heard this message before.

Don't get me wrong, New Orleans is still hurting. Few of the houses in my old neighborhood in the lower 9th ward are inhabited. Most neighbors have moved away, probably never to return. My old house, built with pride by my father, was pushed off the foundation by flood and wind, and then squashed. Most New Orleanians have similar stories that can make you cry.

There are few tears left for Hurricane Katrina promises in New Orleans. Those tears were used up long ago as we watched the collective failures of federal, state and local governments as they reacted poorly to Hurricane Katrina and then botched the recovery.

Secretary Michael Chertoff of the Department of Homeland Security was unable to galvanize the federal government's response. He is a good man, but has spent his time as a cerebral lawyer, able to craft a grand legal argument, but unable to bring inspiration and leadership where and when it was most needed.

The government's initial response to Katrina was bad, but the recovery phase has been worse. The federal government could never seem to coordinate its resources and abilities, and cut through bureaucratic problems within the many executive agencies sharing responsibility for the region's recovery.

Clay Johnson, III, President Bush's best friend, and the Deputy Director of Management at the Office of Management and Budget(OMB), the agency responsible for managing and coordinating executive branch agency efforts, was probably the guy that should have taken on the task of forcing the federal agencies to work together, but he did not. Perhaps he was limited by cronyism or incompetence, but the end result was federal government bumbling, waste and inefficiency.

Later, President Bush would bring in better, more qualified talent with ties to the region, that made some progress with recovery, but it was more than a day late, and more than a few dollars short.

So, when President Obama announced that he is pushing the federal government to get it right, promising greater amounts of federal aid, most of us had heard that song before. We also know that too much of the federal aid simply disappeared in wasteful pork, indefensible contract overruns, and political payback.

Maybe it is time for a new idea.

Instead of promising more federal funding to rebuild New Orleans, I would like to see President Obama promise less. That's right, less! I would suggest that he immediately begin to phase out all current programs, with the goal of zeroing out all federal Katrina-aid within the next 3 years.

At the same time that the federal aid is being reduced, the President and Congress should, for the same period, eliminate all income, withholding, and business taxes on all citizens and businesses located in the region.

What is the point of taxing New Orleanians at the current time? The federal taxes gathered from the region, are sent to Washington and then, with the help of Congress, is returned to the region in the form of pork spending, political payola, and inefficient federal programs managed by bureaucrats in Washington. Eliminating the requirement for New Orleanians to pay taxes means that money would remain with citizens in the region and would remain in the hands of the private sector where it could be better deployed.

What a difference that approach would make! Local entrepreneurs would rise up like a hungry trout to a fly. Capital would flow into the region as business leaders elsewhere seek to escape confiscatory taxes and overwhelming regulatory regimes. New Orleans would become a modern day boom town.

Small businesses, that are now being squeezed throughout the nation by lack of credit and by higher taxes, to pay for all the new social spending experiments passed by a fiscally irrational Congress, would find an oasis in New Orleans. Small businesses would hire and innovate and then hire some more. Credit and private capital would flow into the region. Oh, yes….make no mistake, New Orleans would become a boom town.

Lessons from Hurricane Katrina are many, but none more important than the limitations of noble intentions from the federal government.

President Obama can't "rebuild" New Orleans with massive amounts of federal aid and ever-expanding federal programs. Those efforts, no matter how well intentioned, will never produce the desired effects of innovation, job creation, and economic vitality, especially since the President has unwisely expanded government, run up unsustainable federal deficits, and driven up borrowing costs for small businesses.

If the government had the wisdom to unshackle small businesses innovators and dreamers, I have little doubt that they could not only rebuild the region, but spark a national economic recovery. If government would concentrate on efforts to remove the many and growing disincentives to economic growth and innovation, New Orleans would boom.

Your home town would too.