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March 16, 2007

Three Bears, No Goldilocks - Part III - When the Levees Broke: A Requiem in Four Acts
by M.A. Nystrom

So far in this series, we've heard from Michael Panzner via his book Financial Armageddon, and Peter Schiff via Crash Proof. But perhaps you're still not convinced of how bad things might get. I realize that it is difficult to even begin to even imagine what life would be like after a complete financial collapse and everything that would entail. But there is no need to imagine it: You can see it with your own eyes in Spike Lee's incredible documentary on Hurricane Katrina, When the Levees Broke, A Requiem in Four Acts. Unlike Schiff and Panzner, Lee is not a financial writer; he is a storyteller, and the story he tells is the spellbinding, horrifying tale of government incompetence, (financial) collapse and the breakdown of society. I was left time and again shaking my head incredulously, wondering how this tragedy could have occurred in the United States, but realizing at the same time that this is most likely just a small preview of what the rest of America will face after the perfect financial storm. When historians look back at the history of America, Katrina and the government's response -- or more accurately, its complete lack of response -- will surely figure prominently as a sign that the nation was already well along its steep moral and economic decline.

Striking is not only the complete lack of preparation - by the citizenry and at all levels of government -- but the complete breakdown of civilization for days, weeks -- in some ways to this day -- that followed the storm. As I watched, transfixed, I realized that this is what life would be like during America's second great depression. For those of you willing to see a preview of the depression - rather than just reading about it (and learning how to "profit" from it) - this documentary is required viewing. Katrina is both a metaphor for, and a microcosm of the global financial storm that is brewing and how it may affect you on a very personal level. Like with Katrina, everyone knows that the perfect financial storm is coming - it is only a matter of time before it hits. And like Katrina, most people are woefully unprepared for its arrival. As one piece of graffiti scrawled on a demolished New Orleans home put it, "Hope is not a plan."

From Lee's film, we learn that a potential levy breach and flood of New Orleans was among the top three potential domestic threats identified by the federal government. Such an event ranked right up on the list with a San Francisco earthquake and a terrorist attack on New York. Just a year earlier, in 2004, the Federal Emergency Management Agency (FEMA) conducted a mock hurricane simulation known as "Hurricane Pam," which identified strategic weaknesses, made a number of startlingly accurate predictions, including a levee-topping storm surge resulting in more than one million people displaced. The study further concluded that over 100,000 people -- many homeless, elderly and disabled -- had no access to cars and would not be able to evacuate.

In spite of this, we see President Bush sidestepping responsibility: "I don't think anyone anticipated the breach of the levees," he says with an uncharacteristic and sheepish grin on his face. I guess he didn't read the report about Hurricane Pam. His denial is strikingly similar to Condoleezza Rice's claim in 2002 regarding another American disaster, 9/11: "I don't think anybody could have predicted that ... they would try to use an airplane as a missile, a hijacked airplane as a missile," I guess she didn't read FEMA's report that on that one, either. So if no one at the highest levels of government reads FEMA's reports, how important can FEMA be? Apparently not very, since Bush gave leadership of the agency to the unqualified Michael Brown simply as a political reward.

The point here is that when (not if) Financial Armageddon is upon us, don't expect much more from your government than denials of culpability and a shirking of responsibility. Perhaps something like: "I don't think anyone could have foreseen a dollar crash," or "I don't think anyone had any idea that the nation's retirement system was bankrupt," might do. But considering the kind of appointees sitting on the Board the Federal Reserve these days, such denials may in fact even be true! (Kevin Warsh (Kevin who?), the latest appointee to the Federal Reserve Board is a 35 year old complete unknown among economists--even among the economists who have populated the Bush administration. The only qualification that jumps out at you is the $165,000-plus his father-in-law (the son of Estee Lauder) has donated to various Republican committees since 2002.)

This is how our government apparently functions these days - its all just politics. When disaster strikes, your best bet is to assume that you'll be on your own. So it was with Katrina. The first responders were overwhelmingly average citizens, stepping up to the plate, neighbors risking their own lives to rescue and assist neighbors. Lee interviews many of them, including Sean Penn. I don't know what he was doing down there - it wasn't explained - but he was out there in a boat day and night, along with other Samaritans, trying to help as many people as they could. That is how it had to be, since the Federal government didn't show up in New Orleans until five days after the storm, in spite of all their grandiose promises. The Royal Canadian Mounted police were in New Orleans offering help before the Feds and the National Guard ever arrived. Where was the rest of the government? Bush was vacationing on his ranch in Texas; Cheney was off somewhere fly fishing; Michael Chertoff was in Atlanta at an unrelated conference and Condoleeza Rice was shoe shopping in New York.

Spike Lee has done a masterful job with this documentary - interviewing hundreds of citizens, residents, survivors, and interspersing their stories with images of New Orleans before, during and after the storm. The story is told through their eyes, with their words and voices. To his credit, he does not annoyingly insert himself into the film the way Michael Moore does in his documentaries. Spike Lee's face is not seen, and even his voice is rarely heard. What is seen is the future of America: People stranded, camped out in the streets for days with nowhere to go, no food to eat, no water to drink. Trash and debris are everywhere. Corpses are left on the streets - in a major American city - for days. The local police, when they are seen, are more concerned with protecting property from looters -- or actually participating in the looting itself -- than with attending to the well being of the people.

When the Federal Government finally arrives on the scene, their evacuation efforts are carried out with the clumsy bluntness of the US military. People are herded onto random busses and airplanes without choice, without any indication of where they are going until they arrive. Some end up on 30-hour bus rides into the unknown. Families are broken up - husbands separated from wives and small children taken from their parents. Now known as refugees - refugees in their own country - one million former citizens of New Orleans are scattered across the country like dead leaves - simply dropped off and told to fend for themselves, without any support, any contact with their family or friends, no way of contacting them or getting back home. All of this in the United States of America.

Katrina was a terrible tragedy, one that continues to unfold. Unlike the debris of 9/11, which was quickly cleaned up, most of New Orleans is still in shambles. The city's population is a fraction of what it once was; unemployment, homelessness and depression are up. There are so many more stories and insights in the documentary that I cannot even begin to do the film justice other than to just say: see it. (A note of advice: It might be cheaper to buy it than rent it, especially if you end up paying a late fee for two disks -- as I found out. If you do rent them - rent the separate disks one at a time!)

The documentary opens with a video montage of New Orleans, before, during and after the storm, set to Louis Armstrong's "Do You Know What It Means, to Miss New Orleans?" As one interviewee put it - if this can happen to New Orleans, it could happen to any American city, which is a chilling thought. Why was New Orleans so neglected? Was it because the population was predominantly poor and black? Or was it because the government's focus was placed squarely on Iraq? Or was it because there was no political advantage to helping a city that votes Democrat? Was it incompetence? Or just general indifference? There is no single clear answer, but rather a combination of all of these. I have never been to New Orleans, so I don't know exactly what it means to miss New Orleans, but I can imagine it. I am an American, and I know what it will be like to miss this place when it's gone. In a way, I miss it already.

Comments welcome here: http://www.bullnotbull.com/blog/?p=109

Also of Interest:
Three Bears No Goldilocks - Financial Armageddon
Book: A New American Dark Age
Ron Paul: The Coming Entitlement Meltdown

Must See Video:
Jones on Money, Gold and Silver
Video: The Secret Government - Bill Moyers
Video: Why We Fight

Michael Nystrom
Editor
www.depression2.tv
www.bullnotbull.com

M.A. Nystrom is a private investor and consultant currently living near Boston. He earned his MBA from the University of Washington with a specialty in International Marketing. Following his retirement from the US securities industry, he picked up the hobby of web design, a trade he now plies at his big-picture investment oriented website www.depression2.tv.

Copyright © 2005-2009 M.A. Nystom

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