When It Rains, It Pours
Just when all the harrowing events of this new century's first two years were starting to fade from present reality to recent memory, along comes Hurricane Katrina. If ever there was a case for forward-thinking financial planning, this was it.
But a government that passed a $280 billion highway
bill (with a $100 million bicycle path) apparently couldn't come up
with $40 million to reinforce the New Orleans levees. Now it probably
will cost another $100 billion to rebuild that city and the surrounding
Gulf coast. Talk about pennywise and pound-foolish. Next time a client
wants to avoid an expense like umbrella liability insurance, this could
be a good reminder.
What were the lessons of the hurricane? With the
outpouring of funds for victims, Katrina did show the generous side of
the American public. But it also showed that one bad storm could turn a
part of America into a disturbing Third World wasteland.
Some observers, like Bill O'Reilly of Fox News, said the lesson was not to trust government and don't be poor. If you make the first mistake or find yourself in poverty, there's a good chance you're doomed to suffer when disaster strikes.
Fair enough, I suppose. But the courage on September 11 of some government workers (essentially New York City firefighters and policemen) provided a spark that united the entire nation. The New Orleans debacle spawned a natural but unseemly wave of recriminations from a public that was suddenly ashamed of what happened, and divided the country.
My own guess is that, once shamed, America will display its resilience, show its generous side and rebuild the devastated areas faster than expected. But it's not certain. Cities like Newark and Detroit never recovered from the riots of the 1960s, and transplanted evacuees from Katrina may well find that life somewhere else is much better.
Cruel as it may sound, life does go on. Still, it
was a little unseemly to watch the stock market rally in early
September. One couldn't help but question whether the stock market
would have reacted in similar fashion if it had been Manhattan or
Greenwich, Conn., under 15 feet of water.
Watching the reaction of folks in the advisory
business was a much more uplifting experience. As Ray Fazzi
reports in Frontline News on page 27, some advisors rose to the
occasion after the hurricane. Word has it that the Financial Planning
Association, which has scheduled its 2006 conference for New Orleans,
is hoping the city recovers to the point that it can follow through
with its commitment.
New Orleans in September isn't my favorite climate, but let's hope they can.
