"In the case of New Orleans, the model we used was the housing situation," says Scott. "The initial Red Cross estimate of houses destroyed was 267,000, and 75 percent of them are in New Orleans. So we argue that the strength and speed of the recovery will be limited by the availability of housing. If someone has eight restaurants, even if they open them back up again right now, they can't staff them because the workers don't have housing."
The housing formula generates sobering statistics on the post-Katrina economic outlook for the state. Even as Scott and his team of economists added 20,000-30,000 jobs for relief workers living in or commuting to New Orleans to their data, they arrived at a total of 337,000 jobs ' a number that effectively wipes out four decades of growth and puts the Crescent City at its 1963 employment levels.
Scott's estimates were also informed by personal experience. He has a townhouse in Old Metairie that took on more than 4 feet of water and has been back to the city numerous times to try and sort out insurance issues. And like so many other Louisiana residents, he has a hard time seeing a clear picture of the timetable for rebuilding efforts. "There's a limit on flood insurance, there's a shortage of contractors, problems with mold remediation â?¦ so when you look at the total number of homes damaged, it boggles the mind. Some people have asked what the margin of error is for this forecast, and we tried to hold our hands apart as far as we could. There's just so much uncertainty."
Even the staggering mid-80s Louisiana recession caused by the oil industry's downturn doesn't compare to Katrina's damage to the economy. "The size and geographic impact are the two main differences," says Scott. "The [oil] recession occurred over a six-year period, and we lost 9 percent of our jobs ' about 148,000 in the state. That's a huge hit, and it hit virtually every metro area in the state. Now we've lost twice as many jobs in about two months, but it's been like a rifle shot aimed directly at New Orleans."
With so much of the damage concentrated in the New Orleans region, Scott emphatically warns of a false sense of economic security in areas such as Baton Rouge, Acadiana and north Louisiana, which mostly emerged physically unscathed from hurricanes Katrina and Rita. "We're already doing surveys in Baton Rouge on how much business there relies on New Orleans, and it's a lot," he says. Suppliers from multiple industries have lost their New Orleans customer base, and the flip side is also true; restaurateurs in particular have scrambled to try and replace goods they bought from New Orleans. The overall ripple effect is significant. (Scott, for example, had four speaking engagements in New Orleans cancelled, and the status of his consulting contract with the city of Kenner is up in the air.)
While the metro New Orleans area staggers to get back on its feet, Scott says displaced residents and businesses will spur economic growth in other regions of the state. He estimates that Baton Rouge will be able to accommodate up to 50,000 new residents and 23,000 jobs, making the capital city the state's largest metropolitan area in 2006. Retail operations in Houma should also increase. Statewide, the already-booming construction industry will make further gains. And oil industry infrastructure repairs will bring increased employment in the Lafayette region.
"[Lafayette] has the servicing firms that are going to be charged with repairing structures in the Gulf of Mexico," he says. "As a result, we bumped up Lafayette by 4,000 jobs in 2006. It's going to take a minimum of one year to repair some of these pipelines and platforms. The Chevron Typhoon, a billion dollar facility, has been inverted. So if you're a fisherman, imagine a $1 billion bobber turned upside down."
While those repairs are under way, Scott says New Orleans' main economic engines ' the petrochemical industry, tourism, shipbuilding and the port system ' can only recover as fast as the housing situation in New Orleans improves. "Bollinger and Avondale ship yards and Lockheed Martin will come back, but they're struggling because they're labor-intensive and workers need places to live.
"The most problematic area is tourism," he adds. "Jazz Fest and Mardi Gras will come back at a smaller level to start, but the biggest problem is convention business. In the past, if you were a convention planner looking at dates between June and November [during hurricane season], there was always a little red flag. Now it's a big red flag."
Ultimately, Scott says federal relief money is the biggest question mark ' and he's discouraged by recent developments. "There are some recent proposals like the Louisiana Recovery Act, where the federal government will buy property and people will then get some of their wealth back. For some people, injection of federal money is going to be critical, because at least part of their wealth is built up in their homes. And we have to do something about the levee system. If you do want to rebuild, who's going to loan you money in an area that's been flooded when the levee system hasn't been fixed? But the unnerving thing is to watch the change [at the federal level] since we've gotten further and further away from the hurricane. The drop in sympathy level is palpable."
High-profile criminal defense attorney Daniel Stanford awaits his fate in the Curious Goods conspiracy trial.
The Louisiana Department of Wildlife and Fisheries is set to put the kibosh on the legal ownership of monkeys trained to help the disabled, and the agency wants to know what you think.
A federal judge on Thursday asked lawyers battling over Louisiana's new, restrictive abortion law for an agreement that apparently could let clinics stay open — at least for a while — after the law takes effect Sept. 1.
An abortion rights organization wants a federal judge to block enforcement of Louisiana's new abortion law while its lawsuit to overturn the law makes its way through court.
Republican presidential prospects Ted Cruz and Bobby Jindal are planning to speak at an Iowa Christian conservative event in September.
The attention surrounding Victor White III has spiked with the release of last week’s autopsy report, which has raised a number of serious questions about the night of his death and has put the Iberia Parish Sheriff’s Office under an increased wave of scrutiny as more national media outlets are jumping on the story, most recently seenh on MSNBC's The Rachel Maddow Show.
Thursday's Blogs from the Bog!
Dogs get back-to-school blues; mother pleads for release of journalist; ice bucket challenge and more national and international news for Thursday, August 28, 2014.
A group supporting taxpayer-funded private school tuition vouchers is appealing a federal judge's order that Louisiana must provide regular reports to federal officials on the state's voucher program.
The Discovery Channel has canceled reality TV star Will Hayden's popular "Sons of Guns" show after his arrest on an aggravated rape charge.
The LPSB will finally hear from the attorney it hired to investigate the superintendent at a special meeting Thursday at 4 p.m.
Authorities are investigating a report that a student there warned the principal of impending violence similar to that depicted in the movie "The Purge."
Saints cornerback Champ Bailey has played for more than a handful of playoff teams during a career that has seen him selected to 12 Pro Bowls.
Police say a 56-year-old Lafayette man walking behind a dump truck died when the truck hit him as it was backing up.
New Orleans Saints quarterback Drew Brees is a proud papa of new baby girl.
The books on Louisiana's last budget year have been closed, but it took a bit of borrowing from this year to make the numbers work.
The Iberia Parish Coroner responded Monday to the attention surrounding the questionable shooting of Victor White III, a black man from New Iberia who died April 2 while in the custody of local law enforcement.
Two months after lawmakers agreed to create a $40 million higher education incentive fund, no decisions have been made about how to divide the money.
With Drew Brees back healthy, the New Orleans Saints are free to work on the little things that can make the difference between a Super Bowl run and something less.
Incumbent U.S. Sen. Mary Landrieu and her lead GOP challenger Congressman Bill Cassidy are running close when it comes to money. Landrieu has $5.5 million to Cassidy’s $5.6 million in the bank.
With expectations mounting that Gov. Bobby Jindal will soon announce his campaign for president, attention is turning to not only who he will bring along with him but also what will transpire politically back home during the transition.
Seven of the 11 U.S. cities in a new ranking of “most dangerous diets” are in the Bayou and Lone Star states, but the ranking is more about poverty than fried oysters.
Lafayette police are investigating a fatal shooting involving an alleged burglar and homeowner.
Saints tight end Jimmy Graham got the message from the NFL. He's not dunking footballs over goal posts any more.
With qualifying over, the start of campaign season is official, and for the Lafayette Parish School Board, the race toward Nov. 4 will pit 20 candidates in battles for all 9 of the district’s available seats.