City Journal: Big Easy Rising

The current issue of City Journal has an article from Nicole Gelinas which is well worth a read. It’s an overview of New Orleans’ recovery from Katrina and how in many ways the city has successfully translated one of the worst disasters in American history into what was essentially a much-needed wake-up call from the standpoint of citizen involvement, innovation, entrepreneurship and renewal.

Our buddy Quin Hillyer notes that Gelinas is a Tulane grad, so her knowledge of the Big Easy is more than just based on a policy-wonk analysis of crime rates and educational studies. That’s quite clear in the article; the pride in seeing things improve in New Orleans is obvious throughout the piece.

The shock of Katrina, it turns out, produced a surprising renaissance in citizen initiative, one result of which was widespread recognition among New Orleanians that all that federal cash wasn’t going to solve the city’s long-standing problems on its own. Instead, engaged residents have kept local politicians on their toes, making sure that they use the recovery funds to transform and rejuvenate the city. They have taught the rest of the country, still reeling from the financial and economic crisis, a lesson: how to do recovery right.

Gelinas goes through a litany of the changes which have hit the criminal justice and educational systems of the city, complete with the new district attorney and police chief and the transformation of the schools in the city to charters. What she also mentions is the rise of the city’s entrepreneurial class, telling the story of Nic Perkin and Justin Brownhill, a couple of New Yorkers who airdropped into the city after Katrina to open the Receivables Exchange – a Web-based clearinghouse for companies and individuals to trade bills of lading and other receivables as commodities. The exchange now has 55 employees in its downtown headquarters and continues to grow.

Perkin and Brownhill picked New Orleans for hardheaded reasons, not emotional ones. They needed the East Coast time zone to run a financial business, as well as a legal environment favorable to trading receivables (Louisiana had it—who knew?). They also wanted someplace cheap. At a start-up company, Perkin explains, “every dollar makes a difference.” New Orleans, with low taxes and inexpensive commercial and residential real estate, fit the bill. Three years on, Perkin thinks that he and Brownhill made the right call: their company, the Receivables Exchange, has grown from five local employees to 55. The partners have found that many of the talented people who left the city for better economic opportunity long before Katrina are eager to return, helping reverse the brain drain—a sign of the resurgent hope in New Orleans. And Perkin and Brownhill have discovered a benefit in the ease of persuading potential clients or vendors to come to New Orleans for a meeting: it’s a short flight from both coasts, and visitors enjoy the food and the sights.

Gelinas doesn’t mention that the state of Louisiana is contributing to the educational revival by providing private-school sholarships for well over 1,000 Orleans Parish students, which is a precursor to what will hopefully become a much expanded school choice program. One item we can add to the entrepreneurial revival is an anecdote we picked up from a startup operator in the city shortly following Ray Nagin’s re-election. That entrepreneur said he’d voted for Nagin over Mitch Landrieu for reasons you wouldn’t expect.

“I love Nagin,” he said. “He’s a terrible mayor. He’s incompetent as hell. But because he can’t get anything done, he generally has no choice but to leave people like me alone. And because of that I’m free from bureaucrats sticking their noses and fingers into my business. I can focus on doing my job. Somebody who’s more effective probably makes my life more difficult.”

Whether Landrieu will reinvigorate the city’s bureaucracy to impinge upon legitimate business or just improve on the things Nagin did a horrible job with is still unknown. But Gelinas’ point does stand that New Orleans is no longer a city whose residents will stand for failed government such as Landrieu’s predecessors offered.

New Orleans could still fail, of course. The city has yet to prove that it has the political fortitude to drive down crime and keep it low. Social problems, including young single motherhood, still pervade whole neighborhoods. Complacency and voter apathy could return. The infrastructure that the feds are building could remain unfinished. The newcomers could give up—just as previous New Orleanians, both native and transplanted, reluctantly gave up on the city before Katrina.

But for now, New Orleans has something that it hasn’t had in decades: optimism. That’s an asset that the whole country could use a dose of.



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