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.