To Rebuild Or Restructure?

As Democrats begin to recognize that the devastation from and the response to Hurricane Katrina has exposed the insidious failings in the conservative project, they must do more than revive the post-1964 debate between the left and the right on the role of government and how best to stimulate the economy.

The reason is simple. Setting aside the bungled emergency planning and response, the major issues at play in the Gulf Coast reconstruction are local manifestations of national problems. To rebuild the Gulf Coast and do nothing to address national-level root causes will only ensure that the goodwill flowing into the region will be twisted by forces more powerful than today's outpouring of national sympathy.

What are those issues? Three come to mind immediately. Ecosystem depletion, suburban sprawl and federal deficits. Ecosystem depletion is driving both the threat of stronger storms and our increased vulnerability to storms. As The Economist noted this weekend, a researcher from the Georgia Institute of Technology has just made it clear that global warming is responsible for the increasing severity of hurricanes. Meanwhile, the nation's coastlines and wetlands—which should act as storm barriers and flood-control systems—are instead used for high-rise hotels or landfill, putting more Americans at risk. Unless we address both of these massive problems we are condemned to harsher storms and more devastation—year after year.

Suburban sprawl is our national pattern of land use, made possible by 50 years of federal transportation and mortgage policies. By subsidizing the costs of automobile commuting (roads, parking, pollution, gasoline, mortgages), the federal government has undermined our cities, leaving more behind in poverty than many Americans would like to believe. To rebuild the greater New Orleans metro region with a full measure of equity, the regional incentives for rebuilding sustainably and equitably will have to overwhelm the national incentives for sprawl. In an borderless national economy, that can happen only by reform at the national level.

Of course, federal deficits put the lie to George Bush's entire agenda, but even more so in regards to rebuilding the Gulf Coast. Promises of $200 to $300 billion added onto a negative federal budget balance mean that America must finance the reconstruction of the Katrina-affected areas through more national debt. Faced with $66 trillion in Medicare deficits alone, what good is it to reconstruct New Orleans if it means the national economy will collapse all the sooner?

With that in mind, it makes little sense to mount a new offensive along the lines of the 1964 Great Society debate between the liberal President Johnson and the conservative Sen. Goldwater. Then, the post-war economy was booming, and so the logical issue was to make sure that the boom did not leave the poor and vulnerable behind. But a social safety net or, in this case, $300 billion in reconstruction, is meaningless if in delivering such aid the host economy is pushed to collapse. Even my Keynesian colleagues have a hard time arguing for deficit spending when the interest payments on the national debt are already crowding out the spending they seek.

No, today the debate must be about a new economic engine that is sustainable in every dimension: environmental, fiscal and social. Let the conservatives defend the old economy. It's time for progressives to lead.