Steve Teles’s post below starts the process of distinguishing between what we need to do for New Orleans as a set of physical structures and social relationships and what we need to do for the people who lived there (and may or may not live there again). That’s a crucial distinction to make.
I like the idea of giving money to individuals. So should anyone who believes in limited government. It’s fast, it’s efficient, and it’s fair. But I’ll bet any amount of money that’s not what happens, since it would deprive those currently in office of the chance to hand out goodies on a discretionary basis and thus to accumulate chits in the favor bank.
I’m not clear on whether the argument that New Orleans makes economic sense as a port an oil terminal is true. There will naturally be a substantial port at the mouth of the Mississippi, which is where New Orleans was built. But only the Corps of Engineers has kept the mouth of the Mississippi at New Orleans by preventing the Mississippi from diverting itself into the Atchafalaya. The problem is that Morgan City doesn’t have a French Quarter.
As to making the city government a protectorate, in my view that simply isn’t within the authority the Federal government has, or should have. Cities and county governments are the creatures of their states. Alas, it isn’t clear that Baton Rouge has a political culture any less corrupt or incompetent than that of New Orleans.
And while the Big Easy has certainly been ill-governed in many ways, its government isn’t the first one I’d like to see in receivership. There are worse faults than corruption and incompetence.