In the wake of Katrina, Ed Glaeser was pointed in his evaluation of New Orleans as an economic entity.
The 2000 Census reported that more than 27 percent of New Orleans residents
were in poverty (relative to 12 percent for the U.S. as a whole). Median family
income was only 64 percent of the median family income in the U.S.
In 2004, according to the American Community Survey, the unemployment rate
for the city was over 11 percent. And New Orleans’ housing prices, prehurricane,
remained far below those of the nation as a whole, providing further
evidence of weak pre-existing demand for living in the city.
By most objective measures, the city, pre-hurricane, was not doing a good job ofIn light of all this, Ed argued that providing cash to residents of New Orleans might be superior economic policy to rebuilding New Orleans.
taking care of its poorer residents. For most students of urban distress, New
Orleans was a problem, not an ideal. Poverty and continuing economic decline
fed upon each other, delivering despair to many of the city’s residents.
Were he talking about any other city, I think Ed would almost certainly be right. But somehow, it seems to me, if we were to have lost New Orleans, we as a country would have lost something beyond an economic agglomeration. Its continuing contributions to American culture--through food and music both--have provided a positive externality to the remainder of the country that it has not been able to internalize through revenue, and the country owes it something for that. Perhaps the cost of losing these contributions would have been less than the cost of rebuilding, but I am skeptical.