Thursday, January 12, 2006

That would be a governmental market actor?

Here's the headline in the Financial Times:

Mayor urged to let market reshape New Orleans
Here's the first paragraph:

A New Orleans commission on Wednesday unveiled the first part of a $17bn rebuilding plan for the devastated city following Hurricane Katrina, and recommended the creation of a powerful new public agency to buy up condemned properties.
The thing that first caught my attention here was the contradiction between the headline and the first paragraph. But now I'm trying to understand why this makes sense from a public policy perspective.

The proposal involves buying out property owners in neighborhoods where insufficient numbers of people choose to return -- in other words, government subsidies. Not that I have a problem with this, per se. But rather than use government money to channel development in a particular way, it sounds like the majority of the government funds -- $12 billion out of the $17 billion cost of this commission's spending, according to the article -- will be spent to cushion the blow of the hurricane for people who decide that they want to opt out of the rebuilding of New Orleans. What am I missing? It sounds like an opportunity missed for better rebuilding.

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