The Era of Disaster Recovery and Prevention . . . And What It Means to Investors

The recovery from Katrina and Rita ushers in a new era of Disaster Recovery and Prevention. Governments and people are rethinking their response to disasters and the steps they can take to prevent or minimize the worst consequences. The biggest catalyst for this new era is the political fall-out from Katrina.

The slow response to Katrina was a black eye for the Bush administration. For Michael Brown, the ex-head of FEMA, it was a national humiliation. The fates of Louisiana governor Kathleen Blanco and New Orleans mayor Ray Nagin remain to be seen, but reports have pointed out their failures in prevention and response, and that will come into play at election time.

President Bush wants to make up for the bungled response (and restore some political capital)and has earmarked a recovery effort that may total $200 billion dollars. The early response to Katrina has become a cautionary tale for politicians and bureaucrats in federal, state and local governments, and you can be sure they will be pushing for more disaster prevention spending in their own particular fiefdoms. And the media is keeping watch