"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."
Louisiana has joined nine other states in support of Indiana’s appeal of a federal judge’s ruling that the Hoosier State’s ban on sam-sex marriage violates the Constitution.
The Saints are being cautious in an effort to minimize risk of re-injury.
LSU Health Sciences Center says people with a common, hard-to-treat kind of lung cancer can join a new national trial to test drugs faster.
As New Orleans Saints coach Sean Payton and general manager Mickey Loomis spoke about the opening of training camp, steep, tree-covered mountains were in full view behind them.
The family of fallen cyclist Lon Lomas is speaking out after the release this week of the man charged with his death.
"The solutions are obvious: undo consolidation, or amend the charter to make this hybrid attempt at a new form of government work better."
Friday's Blogs from the Bog!
Marijuana source of disputes for HOAs; experts say still safe to fly; Russian-supported attacks on Ukraine and more national and international news for Friday, July 25, 2014.
The Board of Elementary and Secondary Education is considering whether to get involved in a lawsuit against Gov. Bobby Jindal for his attempts to undermine use of the Common Core education standards in Louisiana's public schools.
The latest meeting of a south Louisiana flood board that stirred political turmoil with a lawsuit against the oil and gas industry is taking place amid uncertainty over the future of the lawsuit — and the board's own membership.
The photos taken nearly a mile under the Gulf of Mexico are so clear that small holes are visible in a lifeboat that may have gone down or been scuttled when a passenger ship was sunk by a Nazi submarine in 1942.
Advocate columnist and Jindal shill Quin Hillyer has been against the New Orleans levee board lawsuit from day one, but a recent piece targeting author/activist John Barry prompted the perfect rebuttal from the board’s former vice-president, who takes Hillyer to task on just about every distorted claim he’s made on the issue.
Thousands of people who bought health insurance through the marketplace created by the federal health care overhaul face price hikes next year that could top 10 percent.
Louisiana fell one spot in an annual national ranking of child well-being that looks at poverty, education and health access.
A federal judge has decided he doesn't need to hear more arguments in the case of a gay couple who want a Louisiana marriage license.
Saints again bring playoff aspirations into 2014 campaign.
New details in the case against the man arrested for last week’s bomb threat and bank robbery has surfaced, including a MidSouth Bank surveillance video showing the alleged suspect attempt an early-morning bank robbery.
Parents and teachers who support the Common Core education standards sued Gov. Bobby Jindal Tuesday over his actions against the multi-state standards, accusing him of illegally meddling in education policy.
An arrest was announced this morning in connection with last week’s bomb scare at UL Lafayette.
Attorneys, judges and others interviewed by LaPolitics expect 15 to 20 district judge races this year.
"I feel like I'm under siege," an attorney said recently over drinks at Galatoire's Bistro in Baton Rouge. "We all do. Every time I turn around somebody wants a check. District attorney races. The judges. They're killing us."
As a requirement for running for Congress in the 6th District, former Gov. Edwin Edwards has filed his financial disclosure statement with the U.S. House showing his income in 2013 totaling $242,787.
Unlike those swindled by Bernie Madoff, the victims of Texas businessman Robert Allen Stanford’s Ponzi scheme won’t be getting any relief from the Securities Investor Protection Corp.’s emergency fund after a recent appellate court ruling.
The legal challenge is part of a continuing struggle over Common Core, which has become controversial since the Board of Elementary and Secondary Education adopted the standards in 2010.
The lone Democrat to announce he's running for governor, state Rep. John Bel Edwards, criticized Republican Gov. Bobby Jindal's budgeting tactics as "running the state like a big Ponzi scheme."