HOW HE SEES IT Bush abandons small government goal

President Bush didn't mention any dollar amounts when he pledged to rebuild New Orleans, but clearly he's not going to blink at sums as high as $200 billion.
This president, who was elected on a Reaganesque platform that called for shrinking the federal government, has made clear that he now sees government as a solution, not a problem.
Bush's speech in New Orleans last week "was the final nail in the coffin" for the small-government movement, says Steven Slivinski, director of budget studies for the Cato Institute in Washington.
"But we've been on this road for a while," he said. "Even before 9/11, Bush's first budget grew government by 6 percent or 7 percent, almost double the historical average growth rate."
Stung by criticism of his early response to Hurricane Katrina, Bush now appears ready to throw almost any amount of money into reconstruction. The federal government's traditional role after a disaster is to clean up debris, provide temporary housing and rebuild public infrastructure, but Bush's vision also includes rebuilding neighborhoods and retraining workers for new jobs.
"This is a radical departure from the past 30 years of federal response to natural disasters," Slivinski said. "And the fact that they're not arguing with the $200 billion figure worries me. It may be the tip of the iceberg."
At a time like this, it's entirely appropriate to harness the borrowing and spending power of the federal government. But federal dollars aren't free money. "We need to think of it in terms of resources, not just dollars," said Murray Weidenbaum, a Washington University economist. "The construction industry has a limited capacity for putting up buildings. The money is really a proxy for resources we can bring to bear."
Highway bill
Weidenbaum would like to see the government pay for the reconstruction partly by cutting back on other things, including many projects in the $286 billion highway bill that Congress passed this summer.
Like his response to the 9/11 attacks, Bush's response to Hurricane Katrina may shift a great deal of decision-making away from states, cities and the private sector.
The extent of the federal power grab isn't yet known. One key question: Will hurricane victims be eligible for aid if they choose to stay in a place like Houston, or will they only get help if they rebuild in the hurricane zone?
Russell Roberts, professor of economics at George Mason University in Fairfax, Va., hopes compassion will be directed to individuals, not localities.
"I would give the money to the people, except for the infrastructure part," he said. "You don't want to tell somebody who gets set up in Houston, 'Well, we're moving you back.' We shouldn't be moving people around like cattle."
Difficult decisions also must be made about which neighborhoods to rebuild. If private insurers were calling the shots, the lowest-lying areas would be allowed to return to swampland. Under our government flood-insurance program, some people will probably be allowed to put their homes and their lives at risk all over again.
We have a chance to rebuild a better, more sustainable New Orleans than the one that existed before. If we measure success by the amount of taxpayer money that's thrown at the problem, we'll have squandered that chance.
X David Nicklaus is a columnist for the St. Louis Post-Dispatch. Distributed by Knight Ridder/Tribune Information Services.

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