The Disaster Profiteers: How Natural Disasters Make the Rich Richer and the Poor Even Poorer (23 page)

After the 1906 earthquake in San Francisco, city officials attempted to remove Chinatown from the city in order to claim the valuable downtown property for redevelopment. Chinatown was popular with white people, but the Chinese people themselves risked beatings by white vigilantes if they strayed outside the ethnic community. Most Chinese had gone to San Francisco after the California Gold Rush ended and set up their own district. Very restrictive immigration laws prevented the population from expanding. (An active group known as the Japanese and Korean Exclusion League worked vigorously to ensure these very tough laws existed.) After the quake, Chinatown was effectively purged of its inhabitants, who were moved to Oakland and to the Presidio area, well out of San Francisco itself. That plan, really an exercise in social engineering, failed. City planners woke up when they realized they would lose considerable tax revenues and a flourishing trade with China and Japan if they moved Chinatown and its residents out of the city: hardly an act of generosity toward its Asian residents, but the Chinese population was allowed to return.

The Japanese in 1923 came close to blaming Koreans for the damage to Tokyo—the damage caused by the fires, at least. Americans did not blame the Chinese for the destruction of San Francisco. But in both cases the chaos of the disasters gave cover and opportunity to settle old grievances in grim ways. The opportunity a disaster presents can be to provide the greater good to all people, to take good for just a few, or simply to give free rein to act on prejudices.

In New Orleans, poor black people were not accused of causing the natural disaster of Hurricane Katrina, but they
were
accused and summarily punished for causing a disaster of social unrest. The fact that the accusation was largely false has not penetrated the public mind and still resonates today. The accusation was all that was needed to give permission for those in power to act to change the social order, as we will see in the following chapter.

Chapter 7

Rebuilding as Social Engineering

Disaster seen as an opportunity for engineering social change is not a new idea.

The Great Kanto Earthquake of 1923 occurred simultaneously with a typhoon, the only occurrence of such a double disaster on record. The earthquake, and more so the subsequent fires, destroyed 45 percent of Tokyo and 90 percent of Yokohama, killing well over 100,000 people. (As always, estimates vary.)
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The fires no doubt killed more people than the quake itself as the quake occurred around midday, when many people were cooking outdoors on open fires. Descriptions of the conflagration sound like scenes from a fiery hell. Some 38,000 people were incinerated together when they sought refuge in a huge former army clothing warehouse; it was instantly engulfed in the inferno of a massive fire tornado created by the typhoon winds and the roaring fires.
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Like so many other disasters at that time and even today, the Kanto earthquake was seen as a divine message. In this case, it was said to be a clear statement to the people of Tokyo that they were being punished for living a profligate lifestyle of luxury and excess.
The ruin of Tokyo was seen as an opportunity for retrospection and reevaluation of morals.

A certain elite also saw the earthquake as an opportunity to rebuild the city in a more modern and efficient way, similar to Georges-Eugene Haussmann's renewal of Paris, with wide boulevards and grand architecture, at the behest of Napoleon III in the 1850s. (Tellingly, Haussmann's plans have been criticized for creating an overly grandiose city meant for tourists, the wealthy, and the bourgeoisie, with working-class people effectively ignored and marginalized to the periphery of the city.) In its layout and architecture, the new Tokyo was meant to somehow reflect new moral values as well. Haussmann used military cannons to demolish Paris, but for Tokyo, there was no need for cannons: Nature had razed the city.

In fact, the grand plan for heroic and moral reconstruction of Tokyo never came to fruition. James Schencking, a professor of history at Melbourne's Asia Institute, outlines several reasons, not the least of which was the vast cost involved.
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But the driving force was business interests and the demands of commerce. Business owners had no interest in waiting while elaborate plans were drawn up and debated and rebuilding was executed according to plan. They wanted their businesses back and running as soon as possible, and that meant more or less re-erecting what they had before, perhaps with some minor improvements. They had no interest in a Haussmann-like Tokyo; that might take too long. And they prevailed. Tokyo was rebuilt quickly and with few improvements.

After the Tokyo disaster in 1923, there was no chance for Schumpeter's gale to bring creative destruction, and this is the norm rather than the exception. Even when new materials and technologies are available, there is a very strong impulse to get things back on track quickly.

Makeover planning was also contemplated for San Francisco after the 1906 earthquake. In the nineteenth century, fires in Boston and New York had damaged large tracts of land in both cities and had been viewed as, and had effectively become, opportunities for renewal, for expansion, and, of course, for profit. Kevin Rozario, in
Culture of
Calamity: Disasters and the Making of Modern America,
describes how property values rose steeply in New York after the fire of 1835.
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In some instances, the values rose almost tenfold, and property owners who may have been of the middle class before the fire were suddenly propelled into the wealthy class. The wealthy became even more so.

San Francisco had a Haussmann-like plan too—the Burnham Plan—on the table before the earthquake, but it had stalled for many of the same reasons the Kanto renewal plan would not get enacted. The 1906 earthquake achieved the first part of the plan, which was the razing of large parts of the city. Like those who backed plans for renewal in Tokyo, those who backed the Burnham Plan tried to use the opportunity the disaster presented to make improvements. But as would happen in Tokyo, businessmen in San Francisco wanted their businesses to come back quickly so they used financing, largely from outside the city and the state, to start rebuilding quickly. San Francisco's strategic location and central port/trading facilities were too important to regions outside the city to let them die. Non-San Franciscans “needed” San Francisco, and it was largely rebuilt with money that came from elsewhere in the United States.

The external private capital for rebuilding acted then much like foreign aid for disaster relief does today. The affected area was relieved of the need to fully fund the reconstruction. It was similar in that way to the rebuilding of Lisbon after the earthquake of 1755. The city and port of Lisbon were critical for trade at that time, and much of the financing for reconstruction came from Portugal's trading partners.

As in New York, property values in San Francisco increased quickly, and businesses boomed. In his book, Rozario includes a photo of the San Francisco business district taken in 1906 and one from the same location in 1909. The first shows utter destruction, while in the second you cannot tell that the destruction had ever happened.

When everything had quieted down in New Orleans after Katrina, there were plenty of people itching to use the opportunity presented by the razing of the city to give New Orleans a makeover. A makeover plan that was included in a report from the Committee for a Better New Orleans became a starting point. For most of the planners, a New Orleans makeover meant changing the demographics as much as the architecture and city layout. That is, in fact, what has happened.

One person who anticipated demographic change was John Logan, a professor of sociology at Brown University. He used the assessment of damage categories by the Federal Emergency Management Agency (FEMA) in New Orleans to correlate the extent of damage with socioeconomic indicators, asking, in effect, who suffered the most.
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Logan's conclusions: “The storm's impact was disproportionately borne by the region's African American community, by people who rented their homes, and by the poor and unemployed.” In many instances, the most affected people fell into all four categories simultaneously. The greatest single disparity was by race. Logan's analysis showed that the populations of the most damaged areas “were 45.8 percent black, compared to 26.4 percent in undamaged areas.” In other words, being African American made it almost twice as likely that your dwelling would be seriously damaged.

Less than a year after the storm, in May 2006, Logan speculated about what the “new” New Orleans might look like. He reasoned
that if repopulation was not permitted in regions that were heavily damaged (something that was being talked about at the time and advocated by many of my colleagues in the natural sciences), the city would lose 50 percent of its white residents and more than 80 percent of its black population. The final sentence of his paper reads: “This is why the continuing question about the hurricane is this: whose city will be rebuilt?”

As it turned out, Logan wasn't quite right about the percentages, but he had the right idea. What happened in New Orleans mirrors what the generals did in Myanmar because it involved, in part, being strategic about doing nothing. The first attempt to reshape New Orleans came soon after the storm. Called Bring New Orleans Back, or BNOB, it was the product of an advisory panel handpicked by Mayor Ray Nagin. The most influential person on the panel was the real estate mogul Joseph Canizaro. Like many of his colleagues high up in the New Orleans elite, he viewed the damage to the city caused by Katrina as an opportunity. He expressed it this way: “I think we have a clean sheet to start again, and with that clean sheet we have some very big opportunities.”
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Others were not as tactful. Richard H. Baker, the ten-term Republican representative from Baton Rouge, was quoted by the
Wall Street Journal
as saying, “We finally cleaned up public housing in New Orleans. We couldn't do it, but God did.”
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Soon after, he posted a sort of retraction and rewording, saying that he was misquoted and what he “remembered expressing” was “we have been trying for decades to clean up New Orleans public housing to provide decent housing for residents, and now it looks like God is finally making us do it.”
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I wonder if Joe Canizaro knew of Haussmann or the postdisaster master planners in Tokyo and San Francisco. I doubt it, but he was following in their path. The logic is, in brief, that the most damaged areas are the most likely to be damaged again (for the same reasons
they were so badly damaged in the first place) so the best thing to do is strip people out of those areas. That will keep people safe. Even though they might not want to be moved out, it's for their own good.

In an article in
Mother Jones,
Mike Davis argued that the New Orleans elite had long been anxious to purge the “problem people” from the city and tells us that one French Quarter landowner, speaking to
Der Spiegel,
said, “The hurricane drove poor people and criminals out of the city and we hope they don't come back.”
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You can only imagine what was said behind closed doors on New Orleans' tony Audubon Drive. US housing secretary Alphonso Jackson predicted that the city was “not going to be as black as it was for a long time, if ever again.”
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It seemed more like a wish than a prediction.

The
Washington Post
quoted then Republican House Speaker J. Dennis Hastert advocating bulldozing part of New Orleans and Republican senator Rick Santorum suggesting that people should be punished for “ignoring” pre-storm evacuation orders, as if being flushed out of their homes and into the Superdome were not punishment enough.
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In New Orleans, race played a defining role in hurricane mortality as well, though it did not look that way at first. What stood out most strongly in the initial statistics of deaths from Katrina was that the elderly were particularly at risk. In retrospect, that hardly sounds novel, but it did catch people by surprise, mainly because the proportions were so high—about 75 percent of the deceased were over 60 and nearly half were over 75. That's very different from the representation of that 60-plus age group in the population.

What was more surprising from the initial impression was that black people were underrepresented in the deaths relative to their numbers in the New Orleans population overall. This seemed especially so given the racial makeup of those suffering from heat and hardship after fleeing to the Superdome. This fact led some commentators to
gleefully suggest that race was not an issue in Katrina's lethal blow. Freelance journalist Cathy Young even wrote an article titled “Everything You Knew about Hurricane Katrina Was Wrong.”
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But victims of disasters and survivors of disasters are not likely to have the same demographics. In fact, you might well expect them to be different—survivors should be younger and stronger, able to swim or climb to a rooftop. Those who could not would become victims. But why were black residents underrepresented in the death toll?

These two observations are actually linked. First, if elderly people are overrepresented among the deceased victims, you have to ask about the racial mix of the elderly. That's what I did when I first looked at the death statistics and what Patrick Sharkey noted in the
Journal of Black Studies
in 2007.
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It doesn't take long to realize that among the elderly, white people are
over
represented, particularly elderly women. In general, women outlive men, and white people outlive black people. So there simply were more elderly white people for Katrina to seek out than elderly black people. Sharkey made the adjustment for the initial population figures and found what most people suspected, that “race was deeply implicated in the tragedy of Katrina.”

The first version of BNOB was described by Marc Morial, the New Orleans mayor who preceded Ray Nagin, as “a massive redlining exercise wrapped around a land grab.”
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Basically, it proposed that some areas not be rebuilt at all. And no prize for guessing which areas would not be rebuilt—those where the “problem people” lived. The most damaged areas would be turned into greenways, pleasant places for the on-average whiter residents to enjoy biking and other leisure activities on weekends. Joseph Canizaro was the main architect of the plan, and it was instantly viewed as a master plan for the business elite, an exercise that Mike Davis dubbed “ethnic cleansing GOP
style.”
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And who was in a better position to benefit from such a plan than a real estate mogul? So the answer to John Logan's question, “Whose city will be rebuilt?” began to emerge soon after the hurricane had carried out its first phase and a wealthy elite saw how to take advantage of the opportunity.

Not surprisingly, the advisory panel's plan was met with hostility when it was presented at a packed town hall meeting in January 2006. The presentation drew an oft-quoted remark from Harvey Bender, a resident of New Orleans East (a place that might have ended up as a nice golf course in BNOB), when he stood up in the meeting during the time for public remarks to say, “Mr. Canizaro, I don't know you, but I hate you. You've been in the background scheming to take our land.”
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Who could blame him?

Canizaro and the mayor and the advisory panel really
did
seem surprised at the hostility to the plan, just as President George W. Bush and his coterie apparently had been by the damage Hurricane Katrina had caused. And the problem is the same in each instance. Decisions were made by an elite group focused entirely on their own self-interest, distant from those for whom they had responsibility, oblivious and uncaring of the needs and the lives of anyone but themselves and their close-knit group of associates.