The Disaster Profiteers: How Natural Disasters Make the Rich Richer and the Poor Even Poorer

by John C. Mutter

  The wealthy in New Orleans have their enclave too. They are mostly in and around the Garden District, essentially the equivalent of Pétionville in Haiti. Audubon Place, immediately across from the luxuriant Audubon Park, is a private gated community. Tulane’s president has a home—a mansion—right on the corner. Audubon Place didn’t flood at all. It’s in one of the few parts of the city that sits nicely above sea level. So, like Port-au-Prince, the wealthy in New Orleans quite literally occupy the high ground.

  This geographic arrangement is far from happenstance. The Mississippi River floods regularly. The floods are the source of fertile soil that made the delta such an ideal place for cotton farming (and the Irrawaddy Delta a fine place for rice growing). Anyone living in the Mississippi Delta before the levee system was constructed (and even after) would have experienced numerous flooding events, and it would not take long to learn which locations remained above the floodwaters. If you are wealthy, that’s where you move. Property values quickly rise in those places as they become known for their natural desirability. In very little time, they become enclaves of the rich. But if you are not rich, you stay right where you are, as marginal people in marginal lands.

  It would be a significant exaggeration to equate New Orleans with Haiti, but numerous times in print, on television, and in conversations I have had with people in New Orleans, the response to Hurricane Katrina was said to “make us look like a third-world country.”6 Just what people meant by that statement was never quite clear. It was always said with the same sort of embarrassment that came over the government officials I met with in Taiwan. The level of death and destruction was more like what we are used to hearing about in a developing country, such as Haiti or Bangladesh, not a rich country.

  So, despite being located in the world’s leading economy, New Orleans and the Katrina disaster exhibit many characteristics that echo those of two of the very poorest places on Earth.

  At the time Katrina struck, corruption was endemic in all levels of government in New Orleans. Louisiana ranked third in the United States in the number of corruption-related convictions relative to total population (following Alaska and Mississippi) in 2005.7 Two of the most prominent government officials at the time of Hurricane Katrina have since been charged with corruption. In 2014 Mayor Ray Nagin was convicted and sentenced to ten years in prison on 20 counts of various corrupt activities: one overarching conspiracy count, five counts of bribery (he was charged with six), nine counts of wire fraud, one count of money-laundering conspiracy, and four counts of filing false tax returns.8 Aaron Broussard, the chief executive of Jefferson Parish, which includes a large section of suburban New Orleans, has also pleaded guilty to political corruption charges.

  The corrupt activities that Nagin was convicted of were not all directly associated with Katrina. Many were “normal.” Nagin has insisted he did nothing wrong, and he may even believe it. The activities were just the way a mayor goes about business in New Orleans. The storm, however, offered a special opportunity for Nagin’s corrupt dealings.

  Corruption differs little in Haiti, Myanmar, and New Orleans, different though those settings are. Those in power in government, whether through election or by seizure, surround themselves with powerful supporters whom they reward with lucrative contracts or favors to conduct business. In return, they get loyalty, kickbacks, and no scrutiny of their own wealth-generating activities. None of those in power show much care for their people except in times of elections (if they have them), when they must pretend to do so.

  Despite the vast and obvious differences between Myanmar and the United States, it is very hard to read accounts of the official government reaction to Cyclone Nargis in Myanmar and not recall the reaction of the Bush administration to news of Hurricane Katrina in the Louisiana Gulf Coast. Both President George W. Bush and Vice President Dick Cheney were on vacation at the time, and neither thought the situation serious enough to interrupt their leisure time. Days passed before Bush and Cheney returned to Washington. The timing is uncannily similar to the time it took for the Myanmar leaders to take action on Nargis.

  We can only speculate about just what Bush understood about the scale of the destruction and the relief operations under way in New Orleans. It is utterly unclear whether Bush, from his vacation home in Crawford, Texas, or from the Oval Office in the White House, knew more or less about the tragedy unfolding in the Mississippi Delta than Than Shwe, the top general of the armed forces of Myanmar, knew from his office in Naypyidaw about the suffering in the Irrawaddy Delta. Both were informed, but both acted—in very different ways—as if they really didn’t know, didn’t believe, didn’t want to believe, or didn’t care. Or couldn’t comprehend.

  And it wasn’t just President Bush who seemed to think Hurricane Katrina wasn’t worth worrying about so much. Secretary of Defense Donald Rumsfeld attended a San Diego Padres baseball game the day Katrina made landfall. Two days after, when the massive tragedy unfolding in New Orleans was undeniable and Bush’s vacation had ended, Secretary of State Condoleezza Rice went to see a Broadway play, where she was booed by the audience. Undeterred, the next day she attended the US Open and went shoe shopping on Fifth Avenue in New York. Michael Chertoff, the head of Homeland Security, which had absorbed the Federal Emergency Management Agency (FEMA), seemed not to pay much attention for days, claiming afterward to have been unaware of the gravity of the situation. And every statement out of the Bush administration claimed that the relief efforts were going well, just as the generals would claim in Myanmar.

  When Than Shwe and George Bush finally began to accept the scope of the disasters in the southern delta reaches of their countries, each acted defensively, concerned more about mitigating political and reputational damage than about the vast damage to life and property. Each had the immediate impulse to assert that everything was under control. Each was eventually persuaded by the media and/or his own staff that he needed to show interest and visit the scene. Bush first flew over the scene in Air Force One on the way back to Washington from his vacation. Although the plane was flying low and relatively slowly, the pass over New Orleans couldn’t have taken much time. Photographs show him staring out the window from his private cabin with a puzzled look on his face. News media were invited into the president’s quarters on the plane in the hope that photos would capture the commander in chief looking vexed, concerned but in charge, giving orders. Instead, he looked hopelessly distant from the tragedy below. It earned him the title of the Flyover President9 from those who felt he was detached from most aspects of life in the United States.

  Bush may truly have been unaware of the full scope of the tragedy in New Orleans. After all, the day after the hurricane passed, the central part of the city looked damaged but not devastated, and Mayor Nagin said the city had dodged a bullet. The Lower Ninth had already flooded; he just didn’t know it.

  Once they finally arrived at the disaster scene, each leader, looking appropriately concerned but now in charge, praised their disaster management agency leaders for their excellent and timely work. President Bush achieved almost instant derision for his infamous statement that Michael Brown, whom he had personally chosen to head FEMA, was doing a “heckofajob [sic].”10 These words came despite being briefed earlier by Brown and others that New Orleans was 90 percent underwater and that “nothing was working”—according to Brown in a later interview on his 2011 book, Deadly Indifference: The Perfect (Political) Storm: Hurricane Katrina, The Bush White House, and Beyond.11

  Unsurprisingly, in his book Brown attempts rather shamelessly to shift the blame from himself to those above him, especially President Bush. Brown sees himself as the person in the administration who had to take the blame for the botched Katrina response. In US politics, someone always takes the fall when something goes badly wrong, whether they carry any direct blame or not. There were calls for Brown’s resignation for days before he was dismissed, and when things go wrong in
US responses to natural disasters, FEMA’s head is always blamed.

  It is particularly important to recognize just how bad Katrina really was. It was not bad just because the response was dreadful. The finger pointing was not about something trivial or a political squabble; it was about the responsibility for massive death and destruction.

  Hurricane Katrina was off the scale in so many ways. While death tolls are surprisingly hard to measure accurately and, as we discussed earlier, don’t have very much to do with the long-run social and economic consequences of disasters, one thing we do know with great certainty is that the Katrina mortality figure, whatever it actually is, is appallingly large. The “official” figure is 1,833; the true figure may be as high as twice that.12

  Until Katrina, even the most massive storms and hurricanes in the United States had not killed many people. Hurricane Andrew made landfall in Dade County, Florida, at category 5 on August 24, 1992. It is notorious in US hurricane history, not because of the number of fatalities it caused but because it resulted in 11 insurance companies being forced out of business by the thousands of claims made by survivors. The death toll was 65. Superstorm Sandy killed 117 people in the United States, the majority of them in New York. Outside the United States, Haiti was hardest hit with 53 deaths.13 These figures are not trivial, but compared to Katrina, they are quite small.

  You have to go a lot further back in history than 1992 to find a hurricane with a fatal effect similar to Katrina’s. The first you find is in 1928, the Okeechobee hurricane, named for Lake Okeechobee in south Florida. Most reported deaths occurred when levees on the lake were breached, flooding extensive areas of the surrounding farmland. It may be that as many as 2,500 people died (the original official figure was 1,836, remarkably close to the official figure for Hurricane Katrina), but the great majority were black migrant farmworkers, many from the Bahamas, whose numbers were not known before the storm. Hundreds were buried in unmarked mass graves. White people died too, but they were buried in the few caskets that were available. There never was and will never be an accurate count of the dead from the Lake Okeechobee hurricane.

  To find a hurricane in the United States with a larger estimated death toll than Katrina’s, you have to go back more than a century to the so-called Galveston Flood (actually a hurricane) of September 8, 1900.14 The death toll there exceeded that of the Lake Okeechobee hurricane and Hurricane Katrina combined by a substantial margin. The Galveston News published lists of confirmed dead in the days following the storm and on October 7 made a final tally of 4,263 deaths. The Morrison and Fourmy Company, which published general directories of business and private addresses in many Texas cities in the early 1900s, estimated that Galveston’s population dropped by 8,124 but acknowledged that 2,000 or so people may have moved away, so their figure is not a death toll. The most common totals you will see on websites and other sources range from 5,000 to 8,000, the three zeroes a clear giveaway that the figures are not accurate. But even the lowest number, probably derived from the Galveston News figure and inflated for good measure, still considerably exceeds the Katrina number.

  The reason the situation in New Orleans was so bad physically was not a forecaster’s error. The storm track was fairly simple, a minor variation on many storm tracks seen before in the Gulf. Hundreds of storms have passed through the area, and that information is stored and analyzed to assess the possible track of any new storm. Katrina was not a freak event. Forecasters were issuing warnings that New Orleans might be in the path of a major storm for many days before August 29. In fact, three days ahead of Katrina’s landfall, the National Hurricane Center was issuing warnings based on projected tracks that were eerily close to Katrina’s actual path.15 It was known that the Gulf of Mexico was unusually warm, so the buildup of hurricane strength was predicted quite well. The information provided to those in authority in the Gulf Coast was more than enough for them to make evacuation plans and protect the people of the region.

  Katrina was first and most importantly an urban tragedy. The concentration of people, particularly in the poorer parts of New Orleans, convolved with the force of the storm surge to make Katrina an off-scale tragedy. In other, less urbanized parts of the Gulf Coast, damage was enormous as well, but the death tolls were much smaller. Katrina actually made landfall in Mississippi, in Pass Christian, yet the Mississippi death toll, though high at 238, was not so enormous as the New Orleans figures. Evacuation had been more timely, orderly, and successful in Mississippi. Based on that figure, you could conclude that if New Orleans had been evacuated as well as Mississippi had been, the total Katrina deaths might have been more like 500 to 600. That would keep the storm in the top rankings of hurricane mortality in the United States, and quite significant globally, but it would still be a fraction of what actually happened.

  The levees were the central problem for New Orleans. Those that failed were not those built to control flooding by the Mississippi River. Those are the only levees visitors to New Orleans are likely to see, and those levees held firm during Katrina.

  New Orleans is bordered to the north by Lake Pontchartrain and is protected from the lake waters by an extensive levee system. Those levees, like the Mississippi River levees, were not breached; still, water did come over their tops as the storm moved inland and the winds changed direction, creating the lake equivalent of a storm surge that pushed south, the opposite direction from the main surge that drowned most of the city.

  The levees that failed were those that constrained the waters of man-made shipping canals. The first to breach, and the one that proved the most deadly, was the Industrial Canal that connects Lake Pontchartrain to the Mississippi River. River and lake levels differ, so entry to the Industrial Canal from the Mississippi is through the Inner Harbor Navigation Canal Lock (more commonly, the Industrial Lock). The canal levees that failed were not designed to handle the storm surge that funneled toward New Orleans. They were built to contain the industrial waterways for shipping through the city, not to protect the city from storm surge.

  Plans for a canal between Lake Pontchartrain and the Mississippi River were made in the late nineteenth century, and the right-of-way for the original connection gives Canal Street, in the center of New Orleans, its name. That right-of-way was never used, and when the Industrial Canal was built beginning in 1914, the chosen site thrust through the Ninth Ward. Today the Lower Ninth Ward lies to the east of the Industrial Canal and the ward’s Bywater section lies to the west. Part of the canal was excavated through uninhabited swamplands, but in the Ninth Ward, houses and businesses and a century-old convent were demolished to make way for it.

  The Industrial Canal was the first to serve commercial shipping and provide harbor facilities, including shipyards for vessel maintenance. It was also the first of the levees to be breached when Hurricane Katrina came ashore, flooding the Lower Ninth Ward.

  The Mississippi River Gulf Outlet (MRGO) and the Gulf Intracoastal Waterway were built later and connected to Industrial Canal. They were to serve as shortcuts for ships to the Gulf of Mexico. These canals, constructed to facilitate commerce, cut through what were then and still are today some of the poorest parts of New Orleans. Residents of these areas had little say in where the canals were located, nor did they derive very much benefit from them. At the time they were constructed in the mid-twentieth century, they probably looked very safe. But MRGO was breached in 20 places during Hurricane Katrina, flooding all of Saint Bernard’s Parish and parts of Plaquemines Parish. It has subsequently been closed.

  Farther to the west in the wealthier section of Lakeview, two more canals suffered levee breaches—the Seventeenth Avenue Canal and the London Avenue Canal. (There is a third canal, the Orleans Avenue Canal, that was not breached.) Both canals head around the middle of the city and exit into Lake Pontchartrain. They are drainage canals used to pump water from the city during heavy (and not so heavy) rainfall. Without them and the many miles of
underground drainage systems, New Orleans would flood under even fairly moderate rain. During Katrina, the pumps failed and the pumping stations were flooded. Much of New Orleans is today in a depression, often called the New Orleans Bowl, having subsided to that lower level over the last three centuries. When the French founded New Orleans in 1718, they chose the site because it was strategically located in a defensive position on a sharp bend in the river. It was also a good location for trade and at that time was on high ground above the river. Today the city is mostly below sea level except in a few places, near to the river and the lake.

  The canal system in New Orleans is hardly a marvel of modern engineering, but, at the same time, it is hardly ancient. When the shipping canals were built, understanding of hurricane risk was not very sophisticated. Early plans for the Industrial Canal were drawn up about the time of the Galveston hurricane in 1900, when those most knowledgeable about weather systems believed that Galveston could not possibly flood to a depth greater than four feet.16 That is what the best science of the day indicated.

  Those who designed and built the Industrial Canal system in New Orleans didn’t have much more knowledge. The now commonly accepted concept of a weather front was not accepted in the United States at that time. (Only after World War II was the concept widely accepted.) Meteorology in the United States was behind developments in Europe. Most people believed, or convinced themselves, that events like the Galveston hurricane were freaks of Nature and unlikely to recur, at least in the lifetime of anyone who was then alive. Katrina, however, was not a freak event. It was a fairly ordinary hurricane, not among the strongest. Many similar hurricanes had passed through the Gulf. In 2005, there was a vast store of meteorological experience of hurricanes much like Katrina.