To Each According to his [pocketbook]??

I was reading an article yesterday in the Times about the need for thousands of home demolitions in New Orleans, and one of the things that struck me is that due to the recent quadrupling of the cost of performing renovations (all across the Gulf Coast) - a lot of people will be unable to restore their homes and consequently they will need to be destroyed (the homes, not the people). This is a prime example of where the government needs to step in and 'control' the market as opposed to letting the market function unfettered.

Why has the cost of renovation quadrupled - b/c there a hell of a lot of demand for contractors and construction services, and there isn't the requisite number of construction workers and supplies to fulfill that demand. But why should this surge in demand, fueled by a gut-wrenching catastophe, bring a windfall of profits to contractors, construction companies, construction supply companies? This is a wasteful wealth transfer that will in no way affect the supply of those available to rebuild/renovate homes - we're dealing with an event that requires an economically short-term solution....it's unlikely that there will be a substantial amount of capital redirected toward the construction sector for long-term use. Instead, construction services available will be rationed via the marketplace...the contractors will be able to command huge profits, while effectively pricing the non-affluent, non-insured out of the possibility of restoring their home.

These people will be forced to partake in some grand redevelopment scheme (which may or may not turn out to be a good thing - depending on who wins the developer/conservationist battle) or to leave the area altogether. This seems unfair to me, why should these individuals be deprived of the choice of restoring their homes, should they so desire? Because they aren't flush with cash? -- I think we could do things little differently.

For starters, why allow the 'market' to ration these limited resources - because, if the 'market' does the job, then only the wealthy will win. But it wasn't just the wealthy who were injured by the hurricane, it seems to me that we should be focusing on an equitable restoration/reconstruction - In my mind the gov't should step in and cap the costs of construction services (only throughout the recovery period) so that nobody gets screwed out of a 'restoration' option. Of course this won't bring any new 'supply' of construction services to the table, so the gov't could redirect resources (federal and private, with some sort of incentive package) in order to fill the gap. This doesn't seem like it would be that difficult - sure the gov't would be 'pushing' resources around that otherwise wouldn't be pushed, but really what's the harm. And - if a gov't incentive structure can't motivate enough resources toward the Gulf such that affordable and equitable construction services are available, then perhaps some form of lottery system should be implemented. I think in this type of a disaster recovery we as a society should really be focused on equity.

This storm hurt many of the residents along the Gulf - it affected some more than others, but it seems patently unfair that only those with the most money or those with the best insurance (read: those with the most money) should be able to put themselves back into the postion that they once were, before the storm. But our national obsession with the 'invisible hand of the marketplace' will do just that - the 'market' will rebuild Trent Lott's house, but the 'market' will level the Ninth ward. God bless efficiency......