"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."
The recent release of Victor White III’s autopsy report could spell trouble, as it tells a much different story of his death than the one told five months ago by the Iberia Parish Sheriff’s Office.
“Candidates for Congress and members of Congress spend between 30 and 70 percent of their time raising money to get back to Congress or to get their party back into power.”
Over the last four days of the trial against attorney Daniel Stanford, there’s been one notable absence from Judge Elizabeth Foote’s courtroom: attorney Bill Goode.
Saints quarterback Drew Brees and wide receiver Nick Toon are not on the same page yet, and time is running short for Toon to get it right.
U.S. Rep. Vance McAllister started his sign-up for re-election the same as other candidates, filling out paperwork and handing over qualifying money. But he finished it like no other, doused with ice.
Friday's Blogs from the Bog!
Jell-o sales plummet; Hamas kills suspected informers; bodies arrive in Malaysia and more national and international news for Friday, August 22, 2014.
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Qualifying continues through Friday.
The political tilt of the Senate during President Barack Obama's final two years in office is likely to hinge on a handful of female contenders in tight and costly races.
A former BP executive will be allowed to travel to the United Kingdom later this month while he awaits trial on charges relating to an investigation of the 2010 Gulf oil spill.
Friends and family will celebrate Spider's life in September.
Saints safety Jairus Byrd has rarely been so eager to hit and be hit, if only to reassure himself that his surgically repaired back is as healed as doctors believe.
Jindal privatized nearly all the LSU hospitals without waiting for federal officials to sign off on financing arrangements that rely on millions of federal Medicaid dollars.
U.S. Sen. Mary Landrieu and her main Republican challenger, Congressman Bill Cassidy, verbally sparred as they officially signed up on the opening day of qualifying for Louisiana's November election.
Superintendent tells crowd he'd just emerged from a four-hour meeting with the attorney hired to investigate him.
The start of the three-day qualifying period for November’s elections has so far yielded 10 official bids and one new announcement from candidates seeking a seat on the school board.
It’s been just over four months since attorney Barry Domingue committed suicide the morning before he was to stand trial for a second day in the federal Curious Goods case, leaving his fellow attorney/co-defendant Daniel Stanford with a temporary mistrial and awaiting his day in court.
Candidates for Louisiana's Nov. 4 election must officially sign up for the ballot this week.
Gov. Bobby Jindal's effort to derail Louisiana's use of the Common Core education standards was halted Tuesday by a state judge who said the governor's actions were harmful to parents, teachers and students.
New Orleans Saints running back Mark Ingram isn't letting a humbling start to his pro career lower his opinion of what he can still accomplish in the NFL.
Visualize Lafayette’s next great thing from 3,000 feet.
A Baton Rouge judge issued a temporary restraining order Monday against enforcing a law that prohibits anyone 70 or older from running for justice of the peace or constable.
Gov. Bobby Jindal believes the last-minute passage of a pension hike for his state police superintendent, Col. Mike Edmonson, was improperly handled, according to the governor's office.
As the courts hash out the attempts to preserve and shelve Common Core in Louisiana, a group of six state lawmakers are planning an Aug. 22 trip to Oklahoma to meet with their counterparts and strategize for the 2015 regular session.