Snow supports federal agency to rebuild NO

[southsider2k5]

http://futures.fxstreet.com/Futures/news/a...-f05e0f08-27895

 

Treasury Secretary John Snow said that he liked, in general terms, an idea floated by a Louisiana Congressman for a new federal bailout agency to help rebuild New Orleans. Under the plan, the government would buy homes and land, clean up the property, and sell it back to the private sector. Rep. Richard Baker, R.-La., the author or the plan, estimates it will cost about $80 billion. "Without endorsing Congressman Baker's proposal, that approach, done the right way, has some merit to it," Snow said in a television interview. Under the plan, homeowners would be able to sell their homes to the government for not less than 60% of their equity before Hurricane Katrina struck the region in late August.

[Balta1701]

That would be an absolutely massive improvement over the "you're on your own" that we've given that area thus far, or the original floated ideas, such as putting either Karl Rove or FEMA in charge of the rebuilding efforts.

 

The rules would have to be pretty darn stringent so as to make sure that the land wasn't being sold on the cheap or bought at incredibly high prices in order to enrich some politician's cronies, but it could work very well if done fairly.

[YASNY]

That would be an absolutely massive improvement over the "you're on your own" that we've given that area thus far, or the original floated ideas, such as putting either Karl Rove or FEMA in charge of the rebuilding efforts.

 

The rules would have to be pretty darn stringent so as to make sure that the land wasn't being sold on the cheap or bought at incredibly high prices in order to enrich some politician's cronies, but it could work very well if done fairly.

 

You are talking about New Orleans, which is in the state of Louisiana. The odds of being able to pull this off without the local politicians getting their grubby little hands in the pot are almost nonexistant.

[Balta1701]

You are talking about New Orleans, which is in the state of Louisiana.  The odds of being able to pull this off without the local politicians getting their grubby little hands in the pot are almost nonexistant.

Well, compared with the alternatives, a federally managed program with strict rules written by the feds about how it's to be pulled off certainly seems to be both less able to be defrauded and vastly more fair than either simply dumping money into contractors in the area or throwing caution to the wind and just not doing anything.

[YASNY]

Well, compared with the alternatives, a federally managed program with strict rules written by the feds about how it's to be pulled off certainly seems to be both less able to be defrauded and vastly more fair than either simply dumping money into contractors in the area or throwing caution to the wind and just not doing anything.

 

I agree. Thank God the republicans control the purse strings at the federal level.

[NorthSideSox72]

I think a major caveat should be placed on this money going to homeowners. If you take the buy-out and move back in, you are REQUIRED to purchase insurance on the property that covers floods and hurricanes. If you cannot do so, then you can't move back. Further, if you take this deal, and then stop insuring later, you are ineligible for ANY government assistance in response to a flood/hurricane in the future.

 

The reason for this is that Katrina was NOT some unpredictable event. It was inevitable. NO has been destroyed more than once in it's history by floods and hurricances, and it sits below sea level surrounded by big water on 3 sides (another big factor was the loss of natural reefs and bars in the alluvial plain, thanks to the Army Corps of Engineers). If people want to choose to live there, then make sure that NO doesn't become a permanent financial crutch for the rest of the country. Those billions of dollars are going to adversely effect the whole rest of the country in some form, to help a few. Make those few take responsibility. If they can't afford the insurance, then take the buyout and leave (someone else will buy the home). Don't make the rest of the country pay for your poor choices again.

 

I realize this is harsh, but I hate to see us prop up this disaster waiting to happen again.

[WCSox]

informer...se don she don be don se day-o... me look you boom boom down...

oh...different snow. my bad.

 

[Balta1701]

I agree.  Thank God the republicans control the purse strings at the federal level.

Yeah, thank God the Republicans aren't overrun by cronies in major industries who would want to get a slice of that pie.

 

Also thank God that they clearly learned their lessons in Iraq about how cronyism can dismantle a reconstruction project, so surely they'll do a better job th is time.

[YASNY]

Yeah, thank God the Republicans aren't overrun by cronies in major industries who would want to get a slice of that pie.

 

Also thank God that they clearly learned their lessons in Iraq about how cronyism can dismantle a reconstruction project, so surely they'll do a better job th is time.

 

Yeah, I know. But I couldn't resist.

[Balta1701]

Some more talk about the "Baker Plan", and more details.

 

Todays New York Times has an article on legislation being offered by the same Richard Baker, titled "A Big Government Fix-It Plan for New Orleans".  The "plan" will pay landowners 60% of their equity before Hurricane Katrina.  Not 60% of the land value; 60% of the equity.  It will pay 60% of the remaining loan to the mortgage holders.  It will turn around and sell the land to developers. "To finance these expenditures, the government would sell bonds and pay them off in part with the proceeds from the sale of land to developers"  In other words, we won't do the whole rip-off from the poor landowners; we'll bilk the taxpayers, too.  The developers, if you do the math, will end up paying something less than 60% of the pre-hurricane value of the land, and the taxpayers will pay the rest.  Sweet!

If they were going to pay the old landowners a fair price, demolish the homes, clean up the land, and then sell the land at a fair price (i.e. the government is on the hook only for the price of the cleanup, and if they do a fair job then perhaps they even turn a profit on the back end of the sale, this would be a fair deal. But here, the government is not only funding the cleanup, it's leaving the people who lost their homes still mired in significant amounts of debt, and at the same time selling the land to real estate businesses at a discount beyond what even the government bought it for.

 

You could make this program work right, but at least based on the description in the NY Times, it at least still sounds like it's designed to be a handout to whatever real estate group is friendliest with whoever winds up running the program.

 

Sadly, even if this program was set up to bilk the taxpayers into financing profits for real estate conglomerates, and at the same time it left homeowners on the hook for 40% of the cost of their destroyed houses, that'd still be better than the "SOL" we've given them thus far.

[YASNY]

Some more talk about the "Baker Plan", and more details.

 

If they were going to pay the old landowners a fair price, demolish the homes, clean up the land, and then sell the land at a fair price (i.e. the government is on the hook only for the price of the cleanup, and if they do a fair job then perhaps they even turn a profit on the back end of the sale, this would be a fair deal.  But here, the government is not only funding the cleanup, it's leaving the people who lost their homes still mired in significant amounts of debt, and at the same time selling the land to real estate businesses at a discount beyond what even the government bought it for.

 

You could make this program work right, but at least based on the description in the NY Times, it at least still sounds like it's designed to be a handout to whatever real estate group is friendliest with whoever winds up running the program.

 

Sadly, even if this program was set up to bilk the taxpayers into financing profits for real estate conglomerates, and at the same time it left homeowners on the hook for 40% of the cost of their destroyed houses, that'd still be better than the "SOL" we've given them thus far.

 

If these homeowners had insurance, which many didn't, then they wouldn't take a financial hit. However, is the government supposed to be the nation's insurance company? Free insurance for everybody? Medical? Homeowners? ... If they are getting 60% return on what WAS the value of their property, as opposed to what the current value actually is, they should be thankful.

[WCSox]

If these homeowners had insurance, which many didn't, then they wouldn't take a financial hit.  However, is the government supposed to be the nation's insurance company?  Free insurance for everybody?  Medical? Homeowners? ... If they are getting 60% return on what WAS the value of their property, as opposed to what the current value actually is, they should be thankful.

 

I feel bad for the people who couldn't afford homeowners insurance. Then again, I'm sure that a large percentage of them couldn't afford it because they instead chose to spend their extra money on cell phones, DVD players, satellite TV, $20,000+ cars, etc. Why be responsible with your income when the government will bail you out if a disaster hits?

 

It's a shame that government assistance is so widely-abused by people who just don't want to act like responsible adults. There are a lot of honest, hard-working people who actually need (and deserve) it.

Edited January 6, 2006 by WCSox

[NorthSideSox72]

I feel bad for the people who couldn't afford homeowners insurance.  Then again, I'm sure that a large percentage of them couldn't afford it because they instead chose to spend their extra money on cell phones, DVD players, satellite TV, $20,000+ cars, etc.  Why be responsible with your income when the government will bail you out if a disaster hits?

 

It's a shame that government assistance is so widely-abused by people who just don't want to act like responsible adults.  There are a lot of honest, hard-working people who actually need (and deserve) it.

 

Agreed.

 

See post #6.

[Rex Kickass]

If it's inevitable, see how easy it would be to insure your house against it.

[NorthSideSox72]

If it's inevitable, see how easy it would be to insure your house against it.

 

Which is exactly my point. It would be REALLY expensive, as it should be. No more making the rest of the country pay for someone's stupid choice to live in a sub-sea level flood plain.

[Rex Kickass]

Well, then why are we so eager to rebuild it?

[NorthSideSox72]

Well, then why are we so eager to rebuild it?

 

Good question.

 

I, for one, am not.

[WCSox]

Good question.

 

I, for one, am not.

 

I agree.

[Balta1701]

Which is exactly my point.  It would be REALLY expensive, as it should be.  No more making the rest of the country pay for someone's stupid choice to live in a sub-sea level flood plain.

Time to abandon California, New York, and Florida.

[YASNY]

Time to abandon California, New York, and Florida.

 

2 out of 3 blue states and the other borderline. Sounds like a plan to me.

[Balta1701]

2 out of 3 blue states and the other borderline.  Sounds like a plan to me.

Well, the destruction of New Orleans has almost certainly turned Louisiana into a hard red state, so congrats.

[NorthSideSox72]

Time to abandon California, New York, and Florida.

 

No, but you bet your ass they should pay the insurance rates and not get taxpayer money when the obvious happens. People can live wherever they want - just don't make me pay for their mistake. There should be national-level zoning, jus like municipalities have for flooding. If you live on the coast of Florida, you are sure as heck in a hurricane zone, and the stipulation should be that no emergency assistance money should go towards your loss of property if that hurricane happens.

[Balta1701]

No, but you bet your ass they should pay the insurance rates and not get taxpayer money when the obvious happens.  People can live wherever they want - just don't make me pay for their mistake.  There should be national-level zoning, jus like municipalities have for flooding.  If you live on the coast of Florida, you are sure as heck in a hurricane zone, and the stipulation should be that no emergency assistance money should go towards your loss of property if that hurricane happens.

Unfortunately though, that doesn't happen. When there's an earthquake, or mudslide, or hurricane, what things do you expect to happen? You expect the police to show up, the fire dept. to show up, do their job, etc.

 

There are dozens of areas in this country where people live in areas of massive geologic hazards. Based on the potential for hazards, there should be no one living along the Pacific Northwest, in Hawaii, on the East Coast, or in Tornado Alley. Everyone should huddle together somewhere in North Dakota.

 

Any time there is any sort of disaster in any area, the taxpayers are going to foot some portion of the bill simply for the rescue, police presence, and other associated government tasks (rebuilding roads, etc.). Even if people pay the higher insurance rates, the taxpayers are still on the hook for a significant portion.

[YASNY]

Any time there is any sort of disaster in any area, the taxpayers are going to foot some portion of the bill simply for the rescue, police presence, and other associated government tasks (rebuilding roads, etc.).  Even if people pay the higher insurance rates, the taxpayers are still on the hook for a significant portion.

 

And that's as it should be. However, the American taxpayer should not be the nation's insurance company.

[NorthSideSox72]

And that's as it should be.  However, the American taxpayer should not be the nation's insurance company.

 

Exactly.

 

That was sort of my point. I said nothing of rescue and clean up, which are to be expected. I specifically referred to property loss and damage. THAT should fall under a zoned expectancy system, in my opinion. The insurance companies can then sort it out, and natural business competition will force rates higher for specific events in those specific zones, as it should be.