Several years ago, Louisiana saw an extraordinary amount of destruction due to Hurricanes Katrina and Rita. Some of the economic effects are already apparent: out-of-state relocations, devastated state institutions, the financial impact of providing extra services to those affected by the storm, and the delay in insurance and/or Road Home settlements. Less quantifiable, but equally important, are the impacts of the changes in demographics and political attitudes.

First, let’s discuss the long-term demographic changes we expect to see before the next census in 2010. According to the 2000 census, the New Orleans metropolitan area was home to 1.3 million people. Because the storms’ impacts were not uniform between parishes or even between neighborhoods we will have to separately analyze the effects.

About 700,000 people live in Jefferson, St. Charles, or St. Tammany Parishes, which were hit with some flooding and/or storm surge, but not to the extent of Orleans or St. Bernard. Jefferson Parish will suffer some absolute population loss for a variety of reasons including business failures, disruptions in the school year, housing problems and of course their respective domino effects. Therefore, we foresee most of the population loss in Jefferson being offset by the continuing population gains in St. Tammany and St. Charles Parishes (Since Katrina, in fact, St. Tammany Parish has experienced an INCREASE of 6,500 registered voters). Overall, we see a 5-10% population loss by 2010 for these three parishes.

The 100,000 people who live in St Bernard and Plaquemines Parishes face a very different future. These areas were in the direct path of the storm, and received the brunt of the after-effects (storm surge, flooding, and oil spills). We believe this triple-whammy has created an environment where few (most likely less than half) can or will return. St. Bernard Parish President “Junior” Rodriguez, in fact, estimated that “more than three-quarters of the parish’s homes are total losses.”

485,000 people reside in Orleans parish where the impacts from the storm vary by neighborhood, although significant long-term population losses are still expected here.

Some areas of New Orleans, including Algiers on the Westbank and the region that stretches from Uptown to the Quarter, were relatively untouched by the flooding. While most residents will likely return, the disruptions to schools, businesses and everyday life could result in an 8-15% population loss in this part of Orleans parish.

According to the 2000 census, 300,000-350,000 people live in the part of Orleans Parish which experienced major damage and flooding; in some cases the flood waters lingered for weeks. (This was the area that was prominently featured in the media.) Even assuming a complete rebuilding of the residences and businesses that once populated the flooded areas, (a very optimistic assumption) it is difficult to fathom even a half of those in the “wet” areas permanently returning.

Overall, the projected population loss to the New Orleans metropolitan area will likely result in a metropolitan area that by 2010 will contain a metropolitan area of 850,000-1,000,000 people, for a net loss of 300,000-430,000.

Not all of the people leaving the Greater New Orleans area will be leaving the state. Cities around Louisiana have accepted evacuees from New Orleans, particularly Baton Rouge and Lafayette. Baton Rouge will likely receive the bulk of those who choose to remain in Louisiana. As the second largest metropolitan area, Baton Rouge is best positioned, in terms of schools, jobs, and available homes, to accept the inflow of people from New Orleans. Also, many people from New Orleans have relatives in Baton Rouge, and vice versa. Overall, we see about a 50,000 permanent population increase for Baton Rouge – a figure echoed by the head of the Chamber of Commerce. Lafayette will likely see an addition of around 20,000 people, While Alexandria, Monroe, and Shreveport will see smaller long-term increases to their populations.

The second and equally powerful change brought about by the storm is one of political attitudes. Some political “experts” believe that the recent hurricanes will create a demand for bigger government and a return to a New Deal-style of economics. This view is rooted in events that took place after the 1927 Mississippi River flood. But unlike the 2005 storms, government played a small role in the storm of 1927. Businessmen in New Orleans, who sacrificed St. Bernard and Plaquemines Parishes to save their own interests, were viewed as the villains. (Mainly because they never followed through with their commitment to reimburse the people of St. Bernard and Plaquemines Parishes for the damages they incurred.)

In the aftermath of Hurricane Katrina the “villains” appear to be the inflexible and uncaring bureaucracy of FEMA, and the indecisiveness and often bickering local political officials, and the many problems related to the administration of the “Road Home” program. In stark contrast to the storm of 1927, many individuals and corporations were clearly willing and able to help those affected by providing food, shelter, and even jobs.

Therefore, we see Hurricane Katrina creating further disgust against the “business as usual” politics of Louisiana. History has shown us that political shenanigans are least tolerated in times of suffering and/or blatant corruption. Prior examples of voter revolts include the economic depression of the 1980s and the FBI gambling probe in 1995.

The extent to which the current political culture can decisively respond to the disaster will determine the extent of voter anger in future elections. Term limits have already created the probability of many new faces in the legislature. However, those eligible to run for re-election may be defeated if they are perceived as playing the same old games with regards to the expected budget shortfalls in the near-term and the longer-term infusion of money from the federal government. Needless to say voters will not tolerate the subsidization of sugar mills, $200,000 renovations, and expensive vehicles in the midst of this tragic situation.

So far, the response from most of the politicians in Louisiana has been underwhelming. We have seen constant finger pointing, indecisiveness, and bickering between state officials, and between state and federal officials. There are already signs of discontent crystallizing.

A final minefield for the current political class is the touchy issue of resettlement of evacuees from the poorer sections of New Orleans. In 1980, then-Governor, Bill Clinton lost re-election partially because he accepted 20,000 Cuban refugees from the Mariel boatlift in his state at President Carter’s urging. Shortly after their arrival, they rioted and escaped. Fast-forward to 2005, where FEMA looked for places to establish “trailer parks” for New Orleans evacuees, which was controversial for many communities, as images of the looting and rumors of violence at the Superdome have made local officials nervous.

Mother Nature has significantly changed the Louisiana landscape, both economically and politically. The political impacts are clearly worth watching because the widespread impacts of these storms will play a large role in deciding who our leaders will be for the foreseeable future.