Social & Domestic Issues

A Flood of Free Money

If you think the government’s initial response to Hurricane Katrina was incompetent, at all levels, wait till you see the tidal wave of ineptitude, cronyism, irrationality, waste and thievery that’s guaranteed to be involved in the clean-up and rebuilding.

“It’s gonna cost whatever it costs,” explained President Bush, sounding not unlike someone who’s used to spending other people’s money and not too worried that he was already operating, pre-Katrina, at the bottom of a fiscal hole that was gushing out nearly $1 billion per day in new red ink.

The first price tag we’re hearing for reconstruction is $200 billion, or approximately $2,000 per U.S. household. Explains Stephen Moore, a senior economics writer for The Wall Street Journal: “When President Bush announced that the feds would take the lead role in the reconstruction of New Orleans, he in effect established a new $200 billion federal line of credit. To put that $200 billion in perspective, we could give every one of the 500,000 families displaced by Katrina a check for $400,000, and they could each build a beach-front home virtually anywhere in the United States.”

Or if Moore is underestimating and it turns out to be a million displaced households, that’s $200,000 each for a free house, enough for a place a few houses back from the beach.

In any case, President Bush is promising a resurrected New Orleans, “even better and stronger,” but still below sea level, combined with higher levels of “racial healing” by the government and a new war on poverty, one that’s more incentive-based and capitalist than the one in the 1960s.

In addition to new roads and levees, there’s $26,000 in the pipeline for each Katrina-victimized household, and more money and power for FEMA, the Federal Emergency Management Agency. As one of its first efforts at reconstruction, the federal government has purchased more than 200,000 trailers for evacuees — the worst kind of housing when a Category 3 blasts through the neighborhood.

Instead of 200,000 mobile homes, Washington Post columnist Sebastian Mallaby asks why President Bush didn’t take the safer and cheaper route: “Why doesn’t he believe in the private rental market of the South, which is offering 1.1 million units of vacant property?”

Others questioned the Bush administration’s efforts to hand out free $2,000 debit cards to tens of thousands of alleged victims of Katrina, a program that’s now been scrapped. “It’s only been 10 days since the reconstruction funds were voted out of Congress, but there are already stories of misspending,” reported Moore in The Journal. “For example, the Louis Vuitton store reported selling two monographed luxury handbags for $800 each, both paid for by women with FEMA’s $2,000 emergency disaster relief cards.”

In Houston, KPRC-TV discovered that some of the $2,000 debit cards found their way into local strip clubs. A manager at Caligula XXI Gentlemen’s Club told KPRC that he has seen at least one card used at his club. Across the street, a bartender at Baby Dolls, another adult entertainment club, was more forthcoming. “A lot of customers have been coming in from Louisiana and they’ve been real happy about the $1.75 beers,” she told KPRC.

The bartender at Baby Dolls explained to KPRC that she didn’t blame her new customers for using federal dollars: “You lost your whole house, then, why not? You might want some beer in a strip club. There are a lot of guys out there that like to do that.”

Unfortunately, the mismanagement of tax dollars by FEMA that was in plain view at the Houston strip clubs is nothing new. When Hurricane Frances hit Florida last year, an investigative report by the South Florida Sun-Sentinel showed that President Bush declared Miami-Dade and other counties a disaster before the storm had passed through the state, a decision that resulted in nearly 13,000 Miami-Dade residents pocketing FEMA money even though they hadn’t experienced any damage from the hurricane.

With the wildfires that burned through Southern California in 2003, according to a report by The Press of Atlantic City, FEMA awarded $5.2 million to more than 5,000 applicants in Los Angeles even though the fires never burned in the city.

Overall, FEMA has become little more than a mismanaged and costly joke. “In disasters reviewed by the Sun-Sentinel,” reports The Press, “FEMA officials never consulted meteorologists or local officials most familiar with damage in their communities before approving claims.” Bottom line, it’s worse than drunken sailors. At least they’re spending their own money.

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