The Disaster Profiteers: How Natural Disasters Make the Rich Richer and the Poor Even Poorer (25 page)

At the same time, the size of the black middle and upper class has dropped 4 percent and that of the white upper and middle class has grown 8 percent. New Orleans has a higher share of minority-owned businesses relative to the size of the black population than US averages, but the receipts from those businesses amount to only 2 percent of the city's business.

And the essentials of living in New Orleans have become harder for some. The percentage of those renting apartments at an unaffordable rate (considered to be more than 35 percent of income) rose by 10 percent following Katrina. Now more than half of the city's renters are making unaffordable rent payments, a figure that is well above the national average.

The only place where the state pays for your accommodation is prison, and if that's your home in New Orleans, you have fewer roommates. The rate of incarcerations has fallen there after initially spiking immediately after Katrina, but it still remains well above the national average, especially for violent crime.
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To Richard Campanella, a geographer at the Tulane School of Architecture, New Orleans is becoming gentrified. The mode of gentrification follows that of places like Austin, Texas; Portland, Oregon; and parts of Brooklyn, New York. Young urban rebuilding professionals (YURPs), or, alternatively, the creative class, are attracted to the very rundown and grimy aspect of these areas that make some people want to leave. They start upscale businesses like specialty coffee shops and yoga studios and go to the inevitable Saturday farmers'
market where they talk about “tactical urbanism, the Klezmer music scene and every conceivable permutation of sustainability and resilience.”
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Christchurch, New Zealand, experienced the same sort of regeneration following the 2011 earthquake, with young people from out of town starting cultural organizations and businesses in areas that were damaged and saw land prices fall.
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In the American Midwest, the disaster that Detroit suffered was economic, due to the decline of manufacturing industries, especially the big US automakers that were the city's main employers, but postdisaster gentrification has much the same signature as that in New Orleans. The extent of urban blight is huge. Detroit has lost more than a million residents since its peak, and that has meant a vast number of abandoned houses and businesses. Detroit filed for municipal bankruptcy in 2013, the largest such case in US history. Public services are minimal. Most of the streetlights don't work. Firehouses and schools are closing all over the city.
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But, just as in New Orleans, new businesses are starting up, launched by young urban professionals. Detroit even has a new Whole Foods (as does New Orleans), a beacon of gentrification. Some large businesses are growing in Detroit too. Quicken Loans has its headquarters in downtown Detroit. Its owner, Dan Gilbert, has purchased or has long-term leases on 60 buildings in the central business area.
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Cheap real estate is the reason why you see so many businesses started by young out-of-towners like those Richard Campanella describes starting up businesses in New Orleans. The similarities are striking. And the situations are very different from the sort of reconstruction we saw in San Francisco in 1906 and after the Kanto earthquake.

This sort of revitalization is highly isolated, with pockets of progress amid a sea of stagnation. It is not the sort of development that can bring a whole community forward. It doesn't create many
jobs and interacts only with a few of the more well-to-do people. In Detroit, it has been called a private boom among public blight.
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How did New Yorkers behave and how has recovery been after Superstorm Sandy? For most people in New York, Superstorm Sandy was a huge supernuisance. The city was without power for a few days, gasoline was hard to come by, public transportation was badly disrupted, and there was no cell-phone service. But the storm's death toll was not very high, given the number of people who were affected. The storm was forecast well—New Yorkers heard about it for days before it came ashore. The storm snaked up the Atlantic seaboard, then made a sharp turn left toward New York, but all this was predicted and quite accurately. Areas that anticipated flooding were evacuated.

Many of those who died were found in areas where people were supposed to have evacuated but didn't, either by choice or lack of means or knowledge. (This also happened on the Mississippi Gulf Coast during Katrina; the number of deaths there was also relatively small for a storm so large in an area so densely populated.) There were only two deaths in Manhattan. A typical cause of death for those who died farther inland was a tree falling on them or their home or electrocution by fallen power lines. Many people suffered fatal injuries in falls in their darkened homes, which happen in regular storms as well. Some people were asphyxiated when they ran backup generators inside their homes.

But some people were a lot more than inconvenienced. Some people on Breezy Point and in very similar locations on Staten Island and in New Jersey lost their homes.

Although there was no crime reported in Manhattan or in many other areas, including Newark, New Jersey, which is known for its high crime rate, that was not true for other parts of the city, especially South Brooklyn and Queens. Some looting did happen.

Rebuilding and renewal have proceeded differently in New York as well. A state buyout program allows owners of damaged or destroyed homes to sell their property at a reasonable price and start anew in another location. Those areas will be returned to Nature and will never be developed for housing in the future.

Some people don't want to leave. They want to rebuild, but to do that, they have to raise their houses to a safe level so they will not be flooded again. Doing that costs about $100,000, and FEMA will cover only $30,000. Because most people have no way of financing the rebuilding, some people are selling their properties for a song, and the new owners are razing and rebuilding them. The price of flood insurance has become astronomical.
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What most people from outside the region don't realize is that these beachfront areas in New York are not the playgrounds of the wealthy. They are very much working-class neighborhoods and include low-income project housing in the Far Rockaways. At the same time, the neighborhoods are not enclaves of “problem people” whom the elite are itching to move out to improve the city. No one had a master plan at the ready that would erase the communities from the map of New York. Planners realized rather belatedly that these areas probably should never have been developed for housing in the first place. But no one had aspirations to reimagine New York without these areas.

For certain, some parts of the shoreline devastated by Sandy are not rebounding very quickly, and some people are in limbo, not knowing whether they will or will not be able to rebuild or move. The wealthy are not trying to remove the lower-income people to build seaside palaces on high stilts. There have been no land grabs.

For most New Yorkers, Sandy is a thing of the past; for others, it drags on in contested insurance claims and temporary housing. In 2015, there are still places you can't get to on the subway, but in
most of the city, especially Manhattan, you'd never know that the storm had happened. As noted, for most New Yorkers, Sandy was a transient inconvenience. New Yorkers don't much like to be inconvenienced and complain about it a lot, but there is a world of difference between a few days without a cell phone and loss of home and livelihood.

What protected most New Yorkers was their relative wealth as well as the efficient functioning of city institutions. What made those who suffered end up in bad situations was the danger of the places they lived. But, like those in the Lower Ninth Ward of New Orleans and the rice farmers of the Irrawaddy Delta, they did not live there out of hubris, thumbing their noses at the dangers of their chosen life. They were there because that is where they could afford to be, where they could make a living, and where generations lived before without experiencing anything of the dangers that others know are present. They lived in dangerous situations because they didn't know they were doing so, because their financial situations forced them there, or both.

Was New York's rebuilding after Sandy a form of profiteering by those who had suffered little? The term
profiteering
has an ugly ring to it.
Profit,
from which
profiteering
is derived, means the advantage or benefit that is gained from doing something.
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The gain can be and most often is money, but it need not be. A profiteer is someone who makes an unreasonable gain by taking advantage of a situation. And profiteering is, of course, what profiteers do. In New Orleans, the racial disparities among returnees indicate that there has been social profiteering by an elite, a reinforcing and exaggerating of conditions that give advantage to a small group. A few powerful New Orleans planners tried a land grab as blatant as any that happened in Myanmar, under guises that seemed to be little different. But is a Teach for America volunteer in New Orleans aptly described
as a profiteer? That seems unfair. What about business interests in and around Kanto and San Francisco that ensured that their needs trumped more inclusive visions for those cities? Or Haussmann's disregard for lower-class Parisians? All, to varying degrees, are forms of profiteering, but what is gained, what advantage is taken, differs from case to case. What all these cases do reflect is an ordering of society and a geography of poverty and wealth that increasingly put physical and financial distance between the classes. And every disaster, because it harms the lower ranks and merely inconveniences the upper, separates us more and more.

Chapter 8

Disasters as Casus Belli

Divided societies can respond explosively when under stress. Divisions provide an undercurrent of tension that adds energy to the system, and, as we see with climate change, added energy can cause explosive changes out of proportion to their proximate causes. If natural disasters continue to add to, rather than diminish, the growing distances between classes and races, we are likely to continue to see more upheavals—even those not related to natural disasters at all. We are seeing these already, and it is surprising how similar their narratives are to those of natural disasters.

The tragedy in Ferguson, Missouri continues. A grand jury has determined that the policeman who shot an unarmed African American youth, Michael Brown, in August 2014 will not be indicted. The policeman responsible has resigned. More rioting after that decision has further deepened the analogy with the Rodney King riots in Los Angeles in 1992. Three weeks earlier another, older black man, Eric Garner, had died at the hands of the police in Staten Island, New York. Again the policeman was not indicted. In December 2014, a deranged young black man first shot and wounded his ex-girlfriend
in Baltimore, Maryland, then went to New York where he shot two policemen at close range while they were sitting in their patrol car in Brooklyn. He then ran off, descended into a subway station, and killed himself with the same weapon. He had posted his intentions on social media, citing motivations of revenge for the killings by police. All the police officers involved in these alleged incidents of misconduct were white, though the young man's victims were not. Months later, when things seemed to be calming down, two more policemen were shot and wounded in Ferguson, and a young black man was arrested.

The governor of Missouri first replaced the local Ferguson police with the highway patrol, then brought in the National Guard to maintain order. The local police were replaced because they had overreacted to the initial protests—they immediately donned riot gear, fired tear gas, threw flash grenades, and, in camouflage gear, pointed heavy assault weapons (not standard police issue) at peaceful protestors from atop roaming armored vehicles (also camouflaged). But that didn't stop the escalation of protests and an increase in violence. The police prevented reporters from going into some areas and detained but did not charge them. The police just didn't want reporters to see what was going on. Most recently, the Justice Department found that police officers and city officials in Ferguson routinely violated the constitutional rights of the city's African American residents and made racist jokes in their city e-mail accounts, including one about President Barack Obama.
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Armored vehicles carrying soldiers with powerful weapons at the ready and patrolling city streets belong in countries at war. We see them, too, in places where large crowds have gathered to protest the actions of authoritarian governments, as in the Ukraine and Venezuela, hoping to dislodge the government and change the regime. But the soldiers who roamed the suburban streets of Ferguson and
New Orleans were indistinguishable from those deployed in conflict settings. This is due to a disturbing and increasing militarization of policing in the United States. Who would even have guessed that a small-town police force in Ferguson, Missouri, would even have such equipment? Apparently, it is widely available and widely used. In his 2013 book
Rise of the Warrior Cop: The Militarization of America's Police Forces,
Radley Balko, a
Washington Post
reporter, describes this trend.
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He also details its very negative consequences for civilian law enforcement, including mission creep among SWAT teams, where more and more force is used for fairly minor infractions. The normally strong separation between military activities and civilian police work is made vague and porous if the police themselves obtain military equipment and take actions indistinguishable from military ones.

Police departments across the United States have become paramilitary units.
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And this assertion is especially true in places like Ferguson and New Orleans, where a majority black and poor population is policed by a majority white police force that does not come from the community it serves and sees its work as containing the “problem people.”

This mind-set—that a “problem people” majority must be contained for the sake of the privileged minority who live among them—is all too common around the world. From it we can discern a narrative common to most natural disasters almost regardless of where they happen and how citizens are governed. First, a terrible event happens. Nature has a tantrum, everything seems terribly wrong, outside the norm. A massive fire erupts on an oil rig. A riot breaks out. The ground shakes violently where no one could remember it ever having shaken before. A massive storm arrives out of nowhere. This is analogous to stage 1 in Susan Sontag's
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brilliantly satirical description of
science fiction movies of the 1950s—it's the arrival of the Thing. In the movies Sontag discusses, the Thing almost always arrives in the United States or Japan, often from outer space but sometimes from deep inside Earth. The terrible event of a disaster can arrive anywhere.

The authorities are the most surprised, or act as if they are, even though they should be the least surprised. The class, race, or ethnic group of those who form the authorities, whether a military junta, a major company, or an elected governor, does not reflect that of the majority of the people most affected by the event. The authorities consist of a small, perhaps tiny elite that holds almost all the wealth and political power. They don't care very much about those most affected by the event. They have to say they care and sometimes they do initially, but that soon fades. The Thing doesn't care about any humans, either.

Scientists say they are not surprised. They say “I told you so,” and then are not heard from again. Sometimes a smug scientist is interviewed on television. When the Thing emerges, the press is initially delighted. They describe it in apocalyptic terms and rush to see it for themselves and report back from the field, breathless and harried. Scientists do the same.

The authorities downplay the scale of the event, wanting us to think it's not as bad as reporters and scientists are saying. You can't believe those reports, the authorities tell us. We all know how they exaggerate. Don't worry; everything is under control. You can trust those in authority. New Orleans is over 80 percent submerged—no problem, we've got it, we'll send KBR, the private security firm that was made infamous when a group of Blackwater guards was involved in the killing of seventeen Iraqi civilians.
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A no-bid contract to KBR would get things moving along the fastest.

An attempt is made to deal with the event that is in proportion to its advertised, downscaled magnitude. In Sontag's science fiction
movies, for example, police are sent in to deal with the Thing and are slaughtered. The head of Homeland Security pays no attention to Katrina and trusts Michael Brown to deal with the problem. At least in science fiction, or figuratively, Brown will be slaughtered soon enough. In Myanmar, the generals ask, Cyclone? What cyclone are you talking about? Everyone in the elite stands flat-footed for days, hoping that the Thing will go away. Incompetent people in government who are political appointees with little to no experience make pathetic efforts to deal with it. People in the affected area try to help each other because no help has arrived. Lying and finger-pointing begin. All attempts to kill the Thing are failing badly.

The elite start to panic while regular people don't, although the media says they do. But soon the regular people start to realize they do not have the capacity to gain control of the situation and no one has come to their assistance. People who have been bravely helping each other realize that food and water are running out. They can't produce either out of thin air. Because no one has come to help, the people take what they need from stores. The media sometimes call these actions provisioning (if performed by members of the elite's racial group) and sometimes call it looting (if performed by those outside the elite's group).

Frustration mounts among the affected population. They are angry but not panicked and are starting to feel hostile. Members of the elite class in the affected area are long gone, having left at the first news of the Thing. If they made the mistake of staying, they are rescued by the first of the rescuers to arrive on the scene and are treated for any injuries they might have sustained.

Looting, whether real or imagined, extensive or trivial, begins in earnest and is a game changer. Looting is a godsend for the elite. It's a way out, a way to deflect attention from their incompetence. Looting is a godsend for the media, too, and where earlier the elite wanted
everyone to ignore the media, now they want everyone to believe the media. No more downplaying. The media are showing things as they really are, they tell us. By this time, the Thing that arrived to start all the trouble is gone, and it's hard to keep the public's attention. The story has moved back a few pages in the newspapers and is no longer the first item discussed on the nightly news. Then, luckily, looting “breaks out,” and there is something to exaggerate and moralize about, a way to frame a story that the public will accept—a framing adapted from movies mixed with racial and class bias. The event is back on the front page again. When there are no reports of looting—as in Japan after the Tohoku earthquake and tsunami—media focus remains on government incompetence and inconsistent reporting from authorities.

The elite who supposedly struggled to quell the Thing are able to say that the very people they were trying to save from the monster are actually monsters themselves. They are problem people behaving badly, rejecting the elite's valiant, not to mention expensive, efforts to help them. They are criminals, bad people, not only stealing luxury goods from stores owned by good people but raping and killing each other, even children. It doesn't matter that few if any of the stories of rape and murder are substantiated; it's just what you would expect these non-elites to do. What next? Soon they will start killing and raping members of the elite. They must be suppressed at all costs. We need curfews, martial law, the military, and shoot-to-kill orders. That's the only hope.

By this time in the disaster event, the Thing re-emerges; it had not gone away at all. But it has changed. It is no longer an act of Nature; it's a group of people. The military is brought in. In some countries, the military is already there. Looting and crime, real or manufactured by the media, become the reason to wage war on the people.

The elite win. How can they not? They command the military. “Peace” is restored.

Scientists give advice. Sontag's young hero scientist, having built a device to kill the Thing in his lab, stands cheek to cheek with his beautiful girlfriend, looks into the sky, and asks, “But will they return?”

Today's scientists say the Thing
will
return, and it will be bigger and more aggressive than ever. They recommend abandoning places where the Thing might appear next and creating massive fortifications against it everywhere that matters to them. Members of the elite consider protecting themselves but hardly anyone else. Plans are being considered for a storm barrier to protect lower Manhattan, for example, but not much can be done about the Rockaways. That's too bad, but what were those people doing there in the first place? What were people doing in the Lower Ninth Ward? Didn't those problem people know it was dangerous?

Now the second opportunity opens wide: The winners can plunder the vanquished. It's their turn to loot, but they would never call it that. Money is needed and needed quickly. No time for lengthy bidding processes, review, and oversight. “Dangerous” lands must be taken and used for better purposes. Scientists agree. In rich countries, that means gentrification or “urban renewal”—euphemisms for property development that benefits the elite and enriches them. In poorer countries, it means land grabs under bizarre laws made by the elite that typically ensure that regular people either do not own land or can be easily displaced from areas they have been farming and living on for generations. Or rebuilding in a damaged area becomes so expensive and so regulation-restricted that those who lived there earlier (in the Lower Ninth of New Orleans, for instance) can't possibly afford to return. The losers also lose what capital assets they might have had, and the winners gain them. Capital is key to gaining wealth. If winners already had private capital assets, and they usually
do, those assets become more valuable. The winners can control who gets the lucrative contracts for reconstruction of public infrastructure and ensure that they go to members of the elite.

The rich win; the poor lose.

It's completely expected in a world of great inequality that the outcome of a natural disaster will also be unequal. Disasters may well affect everybody, rich or poor, in some way, and they are never pleasant for anyone. We want to believe that a disaster is a moment when everyone pulls together—but it is not. It is a moment of pulling apart because the effect on each group is so different, and the way each group can cope is vastly different. The way each group can
capitalize
on a disaster is incomparably different—the rich can, the poor can't. Schumpeter's gale puts wind in the sails of the rich's yachts but sinks the fragile craft of the poor. The rich can move further up; the poor can only stay in their poverty trap or slide down the slope back into the trap—descending from having land and a meager income to no land and no income, for example.

Thomas Piketty, the French economist who recently rose to international stardom with his book
Capital in the Twenty-First Century
,
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has argued that the only time inequality decreases is in times of catastrophe, after which inequality inexorably rises again as returns on capital outpace the overall economy (r > g). Piketty is referring to financial crises; the opposite is true for natural disaster crises, where owners of capital see the value of that capital actually increase rapidly in the immediate postdisaster period. Disasters make the owners of capital even more wealthy; those lacking capital are made poorer, and inequality becomes greater.