Krugman Pegs Bush’s Speech

Paul Krugman pegs Bush’s speech and lets the cat out of the bag…

Now it begins: America’s biggest relief and recovery program since the New Deal. And the omens aren’t good.

It’s a given that the Bush administration, which tried to turn Iraq into a laboratory for conservative economic policies, will try the same thing on the Gulf Coast. The Heritage Foundation, which has surely been helping Karl Rove develop the administration’s recovery plan, has already published a manifesto on post-Katrina policy. It calls for waivers on environmental rules, the elimination of capital gains taxes and the private ownership of public school buildings in the disaster areas. And if any of the people killed by Katrina, most of them poor, had a net worth of more than $1.5 million, Heritage wants to exempt their heirs from the estate tax.

Still, even conservatives admit that deregulation, tax cuts and privatization won’t be enough. Recovery will require a lot of federal spending. And aside from the effect on the deficit – we’re about to see the spectacle of tax cuts in the face of both a war and a huge reconstruction effort – this raises another question: how can discretionary government spending take place on that scale without creating equally large-scale corruption?

The Heritage Foundation’s Post Katrina Manifesto is here. It’s good to be informed about who’s fueling the priorites of our leaders.

Krugman asks, “Is there any way Mr. Bush could ensure an honest recovery program?”

Yes – he could insulate decisions about reconstruction spending from politics by placing them in the hands of an autonomous agency headed by a political independent, or, if no such person can be found, a Democrat (as a sign of good faith).

He didn’t do that last night, and probably won’t. There’s every reason to believe the reconstruction of the Gulf Coast, like the failed reconstruction of Iraq, will be deeply marred by cronyism and corruption.

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9 Responses to Krugman Pegs Bush’s Speech

  1. Teresa says:

    The corruption will continue as long as they are in power. Karl Rove is in charge of the reconstruction. I don’t know what we can do. What foreign country will be paying for it and what will happen to our infrastructure.

  2. Teresa says:

    Actually I think they are going to run into trouble. Folks is hoppin’ mad down there.

    And going down into the lowlands of the bayous and the Mississippi Delta. They don’t realize what they’re getting into.

  3. Ben Mercadante says:

    Amen Teresa,

    Yes, remember that movie “Southern Comfort” with Booth Powers commanding a bunch of out of towner Guardsmen on a weekend exercise in the bayous….Bush’s bunch may fair no better.
    An economic scholar I am not, but Krugman I like and somewhat understand. I am sure this package is something that has been thrown together, I wonder if they think they will get away with the kind of waste and misappropriation that occurs in Iraq…one would think not, but I do put anything past these propagandists.

  4. Teresa says:


    I think they are headed for big trouble. They’re not dealing with Iraqis. They’re dealing with some angry good ‘ol boys, politicians, 1000’s of newly homeless, jobless self respecting American citizens, water moccasins, local governments and bureaucracies, total confusion, no leadership, runaway corruption, and a stinking filthy mess that will prove hard to overcome. Mega problems loom and will probably short change them immensely.

  5. Marjorie G says:

    I responded to this paragraph, as we hope that GOP will finally see the light:

    ”Bush subscribes to a political philosophy that opposes government activism – that’s why he has tried to downsize and privatize programs wherever he can. (He still hopes to privatize Social Security, F.D.R.’s biggest legacy.) So even his policy failures don’t bother his strongest supporters: many conservatives view the inept response to Katrina as a vindication of their lack of faith in government, rather than as a reason to reconsider their faith in Mr. Bush.”

  6. Donnie From Houma, LA says:

    Amen Teresa and Ben. Uncle Sham might bite off a lil more than he can handle if they try to come and play games down here. It could very well turn into a revolution that they can’t afford to have right now. Everyone that grows up down here, has known their whole life, that a hit on New Orleans, would spell trouble. Every storm that even shows signs of coming to Louisiana, brings people down here to talking about New Orleans. This no big secret, yet they act as though they didn’t know the seriousness of what could happen.

    Teresa Says:
    September 16th, 2005 at 3:23 am

    Exactly Teresa. If you add up all the factors, this may very blow up in Bush’s face. I grew up in a bayou community, and I know the mentality of these people. To compound the matter, most people down here own guns, have hunted their whole lives. They know how to use them. Then if you look at this story, you can see how this can get very ugly real quick.

    Gun Sales Surge In Louisiana Following Storm

    POSTED: 3:50 pm CDT September 16, 2005
    UPDATED: 4:57 pm CDT September 16, 2005

    WASHINGTON — Law enforcement officials said people in Louisiana rushed to purchase guns in the chaotic days of looting and lawlessness following Hurricane Katrina.

    FBI officials said the 13,256 checks requested in the first 12 days of September were nearly as many as for the entire month a year ago.

  7. Ginny in CO says:

    The only way I can describe this is “System Failure” I don’t give a rats a** whether it was Republican or Democrats who ultimately blew this money. Where was the press? Government auditing as the contracts and money went out? Where were the state auditors, and congressment who had the power to get the money?

    Presumably it can be unraveled and whether or not criminal charges are ever filed, I hope the names of the people responsible get written into the history of Katrina.

  8. Ginny in CO says:

    Sorry, wrong link (although a good one too) this is the one: LINK

  9. Donnie From Houma, LA says:

    Ginny, I’ll give you one guess as to what we had as Governor, eight years ago. That’s right, Murphy J. “Mike” Foster (R) from 1996 to 2004. The Mayor of New Orleans, was Marc Morial, from 1994 to 2002. He’s the son of Earnest Morial, that the convention center that everyone got enraged about, is named after.