New Orleans

There is no way the general public can be aware of the challenges that are ahead for the rebuilding of New Orleans. Keeping in mind that a large part of the neighborhoods that were destroyed were inhabited by people living in poverty, who has the incentive to rebuild?

Most of the residents were probably renting. Those who were probably highly leveraged, with minimal equity in their houses. We know that county records were destroyed: how will people even prove they had ownership? Insurance policies, if they pay out at all, will go to paying off mortgage holders, not residents. Again, who has the incentive to rebuild housing for a group of people who are unlikely to qualify for new mortgages? Aren't insurance companies likely to avoid highly leveraged loans, which many people would need to buy a house in the first place? And what about income? Most people in this area probably are without jobs currently and will have been without jobs for months by the time they might be re-employed (jobs will be scarce as businesses try to recover from their un-insured losses). No recent job history. Given the lack of income most are probably experiencing where ever they are right now, either no credit or bad credit.

What company would ever invest in this situation? The possibility for return is small and the risks are huge! The answer can only be the government. This is what government is for. Either through well monitored and well conceived incentives to companies to invest or through direct investment.

More importantly, it is the job of the government to be proactive when it is not in the private commercial interest to do so. What do I mean by that? That there is no incentive for private businesses to invest money in re-enforcing levees. There is no incentive for private companies to buy unused weapons grade fissionable materials from foreign countries. These type of activities, preventing disasters, not recovering from them, is government's economic responsibility to its citizens.