Why Houston's prospects for recovery look good - unlike some other hurricane-battered cities

Twelve years after Hurricane Katrina struck the Gulf Coast, New Orleans has never fully recovered. Hundreds of thousands fled and never came back. Its population today is 80 percent of what it was before the storm. New Orleans is not alone.

After Hurricane Ike, Galveston, Texas lost 20 percent of its population. Hurricane Andrew forced out about 30,000 people or 35 percent of the population of Homestead, Florida.

Yet many believe Houston and surrounding environs may be spared a similar fate. "It will recover. It will absorb this shock. And how long it's going to take depends on how big the shock is, but it will recover," says Mercatus Center economist Veronique de Rugy.

Her optimism is based on Houston's unique strength as an engine of the American economy and New Orleans' particular weakness.

Former Louisiana Congressman Billy Tauzin, who switched from Democrat to Republican, often said of his state: "Half of Louisiana is under water and the other half is under indictment." 

After Katrina, one Louisiana Senate seat flipped Republican, and so did the governor’s office. New Orleans Democratic Mayor Ray Nagin was sent to jail on bribery charges in 2014, as was former Democratic Congressman William Jefferson in 2009. Jefferson infamously used a Louisiana National Guard detachment to recover personal belongings from his home, even as rescue operations were still underway a few days after Katrina.

Jim Letten, U.S. Attorney for the Eastern District of Louisiana, told Reuters in 2008 that the Bayou State's tolerance for corruption, "drove many companies away and kept them away."

"My sense is we will not see that in Texas, both because the leadership, the community leadership, and the political leadership in Houston is far more effective," Karl Rove, former senior adviser to President George W. Bush, told Fox News. "The political culture in Texas is far more pro-market, pro-economic growth, pro- business than Louisiana," he said.

For hundreds of thousands of Texas homeowners, and small businesses facing an uncertain future, there is a silver lining. The nation needs Houston, its workers, and its economy.

One third of the US gasoline supply is refined there. Many fuel pipelines that pump industry's life blood emanate from the Texas gulf coast. "So there’s a lot at stake in terms of getting it back up and running," says Glen Hall, U.S. Editor at the Wall Street Journal.

"The port in Houston is a very, very big deal, says Brian Brenberg, Chair of the Program in Business and Finance at King's College. "It accounts for $250 billion-plus of economic activity across the state of Texas and beyond every year. Texas itself is a big deal. Almost 10 percent of U.S. economic output is coming from Texas," he says.

It is that reality that has shifted debate in Washington, too. The returning Republican Congress' priorities have suddenly been reset. "For one thing, I do not expect that President Trump is going to continue talking about a potential shut-down," says de Rugy. "I also think that a lot of Republicans will be eager to provide help alongside with Democrats."

But Congress' new priority of emergency spending illustrates another reality - that a country with a $20 trillion debt is not in a great financial position to bail out victims of unforeseen disasters to come.


Doug McKelway joined Fox News Channel (FNC) in November 2010 and serves as a Washington-based correspondent. Click here for more information on Doug McKelway