Here is my take on the future of New Orleans, in my Creators Syndicate column. My conclusion was that the grain and oil port facilities will be rebuiltthey must beand that the tourism business will revive. The French Quarter, on relatively high ground, was not damaged as much as most residential districts. But the neighborhoods in which the criminal underclass held sway before the flood will probably not be rebuilt. New Orleans will likely become something like a larger Key West, with port and petroleum facilities.
For the last 25 years New Orleans has been a metro area with little economic dynamism. You can see that by comparing the metropolitan area populations of New Orleans, Houston, and Dallas-Fort Worth over the last 65 years.1 In the America that was about to enter World War II, the three metro areas were of roughly similar magnitude.2 Today metro Houston and the DFW metroplex are roughly four times as large as metro New Orleans. I've also given the population increase (or decrease) percentages for each decade and for 2000 to 2004.
YearNew OrleansPop.HoustonPop.Dallas Fort-WorthPop.20041,340,735.25,129,9659.95,764,88710.420001,337,7264.14,669,67125.25,221,80129.219901,285,270-1.43,731,13119.64,042,64232.719801,303,80014.03,119,83143.03,046,08425.219701,144,13015.82,181,31538.02,432,70636.5+1960987,69528.21,581,13748.01,782,13340.71950770,19021.91,068,46745.31,266,69135.31940631,869-735,283-936,180-As you can see from the data, from 1940 to 1960 New Orleans grew robustly, but Houston and DFW grew much faster. New Orleans slowed down but still grew at rates similar to national growth, between 1960 and 1980. In the 1970s decadethe last in which it had significant population growthNew Orleans benefited from increased oil prices. But Houston benefited even more and grew larger than DFW for the only time during this period. Since the oil bust of the early 1980s, Houston has grown less rapidly than DFW, but it has still grown robustly. New Orleans, in contrast, has essentially had a stagnant population over the past 25 years.
To put it another way, Houston was only 16 percent larger than New Orleans in 1940. By 1960 Houston was half again as large, by 1970 twice as large, by 1990 three times as large, by 2004 four times as large. For more than half a century, and at an increasing pace over the last quarter century, people have been voting with their feet for Houston and Dallas-Fort Worth and against New Orleans. New Orleans is about twice the size it was in 1940, while Houston and Dallas-Fort Worth are seven and six times the size they were at the beginning of World War II. Houston and Dallas-Fort Worth are not as constrained by physical limits as New Orleans is, and so you might argue that New Orleans could not have grown as much. But even so, these numbers are evidence that business-friendly policies, vibrant entrepreneurial spirits, and corruption-free government can make huge differences in how great metropolitan areas growor fail to grow.
1 I have added up the populations using the 2000 Census definitions of the metro areas. Metro New Orleans = Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, and St. Tammany parishes. Metro Houston = Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller counties. Metro Dallas-Fort Worth = Collins, Dallas, Denton, Ellis, Henderson, Hood, Hunt, Johnson, Kaufman, Parker, Rockwall, and Tarrant counties. I used the Census results for 1940 through 2000 and the Census Bureau's estimates for 2004. I would be grateful for any corrections of mistakes in computation. 2 Actually, if we used contemporaneous definitions of metropolitan areas for each of these censuses, the contrast would be starker, because the current metro area definitions for the Texas cities, especially DFW, included counties that were entirely rural in character until the 1960s or 1970s or even later. Many of them had population declines in the 1940s, as rural counties tend to lose populations when there are great wars.