It's ironic that the hit will be taken by some of the disaster-capitalist vultures who swept up the pieces after Katrina, buying up what they thought was prime real estate.

http://www.powells.com/biblio/18-9780805079838-0
"People still reeling from catastrophe were being hit again, this time with economic 'shock treatment,' losing their land and homes to rapid-fire corporate makeovers."

Whatever we do, we must make sure we do it with borrowed money.

You talk about the economy affecting the reconstruction. What about the other way, what effect might have the hurricane on the already weakened economy, or it may be the first piece to start the domino fall.

Also, insurance coverage is different (lesser) than what it was when Katrina hit. Insurance companies realized how much they could lose if a big storm hit, and how difficult it was to tell wind from water damage. According to Insurance may not cover as much under Gustav, deductibles of 2% to 5% of the home value are now mandatory. When Katrina hit, deductibles were much smaller.

Also many policies have a wind exclusion. (The always did have a water exclusion.) If people with the wind exclusion want wind coverage, they can only buy it from the state-sponsored insurer, Louisiana Citizens Property Insurance Corporation. Coverage from Citizens is only on a depreciated value basis, and does not include additional living expenses.

With the lesser insurance coverage available, people will have to dig more deeply into their own pockets to pay for damages. This is almost certain to have indirect financial impacts. People are already having difficulty paying their mortgages. With all of the payments required under deductibles, and the possibility of being without a job and having no coverage for additional living expenses, even more folks will default on mortgages. This will make the plight of banks in the area even worse than they were before.

Long term, the prospect of multiple hurricanes hitting the area with little insurance coverage available would seem likely to depress real estate values. Thus, even homeowners who can make it through the immediate problems are likely to experience a loss when they sell their home. This will have a further adverse impact on banks.

I have actually commented a few times that another direct hit by a major storm within just a few years of Katrina might be the end of New Orleans as a major city. But the kind of death toll that Katrina caused is a very rare occurence. The levees were a major identified concern prior to Katrina. In fact, I did think Katrina was going to be pretty bad, and commented to my wife before it hit that it may very well wipe out New Orleans. But the worst of the levees have been patched up, and people are heeding the call to evacuate.

I am not downplaying the storm, just saying that Katrinas are exceedingly rare.

But do you honestly think that since 2005 there has been massive investment in actual physical infrastructure? And if so, obviously depending on the storm itself, do you think that this newly improved infrastructure will be able to withstand it?

Depends ... I've been to New Orleans several times before and after Katrina/Rita (My brother owns a house there). People in New Orleans with means can afford insurance. Insurance allowed home and business owners to not only repair direct damage but to make improvements. The structures of people with means tended to be stronger and better located, above sea level, for instance. The wealthy neighborhoods did not flood nor did they sustain much in the way of wind damage. More damage was done by fires that were difficult fo fight because of no pressure in hydrants or fire department out of service.

Persons without means or in neighborhoods that were well below sea level such as Lakewood in NO or in ares east of the city such as St. Bernard Parish, were wiped out. The cheaper, newer suburban- style structures were ruined. Infrastructure improvement here would be limited to replacement, in that light, any infrastructure replaced may or may not be sturdy enough to withstand a storm.

The repairs to the industrial infrastructure have been substantial, where essential. New Orleans area industrial infrastructure is massive; oil terminals, piers, refineries, chemical plants, power stations, pipelined, railroads, canals and locks, warehouses ... because of a built-in redundancy, much of these facilities were ready to operate in a short period of time after Katrina. Nevertheless, there were large problems with pipelines and electric power availability. Large areas of south La and Mississippi were without power for months. This included refineries. Storm currents damaged pipelines under shallow water that took a long time to repair. Like the flood walls, the repaired sections are as good as new and should withstand anything other than the direct hit of the most powerful storm.

As for the older sections adjacent to the repaired sections? ???? ;)

I think its fair to say that the older, shallower platforms and support structures are in poor condition due to neglect. Many of these items are at the end of their service lives and it would be uneconomical to improve them. I cannot judge whether this is wise ... Other facilities, such as the refinery at Chalmette, which received a direct hit from Katrina is very much in service and has been - as far as I can tell - been the subject of continuous improvement. Power must still be supplied to the plant and fuel to process, obviously.

In my opinion, the problem with repair to the city and it's support structures is more a matter of concept than investment. the MRGO canal is still ready to direct trillions of gallons of ocean water into the heart of New Orleans and St. Bernard parish. There has been more than enough time to remove the shippers who use that canal and close it. The basic design approach hasn't really changed since the 19th century; to fight the water rather than accomodate it. The fight approach is familiar, but it is expensive and requires the entire area to be equally defended; any leak or rupture anywhere can inundate the whole. The approach is ignorant, in my opinion; water has been in the southern gulf for millenia and to predend it can be kept out at all times is delusional.

Part of this has to do with the 'dialog' between the 'environmentalists' and the business people who run things. That's a characteristic of the 'peak oil' problem, isn't it? Denial...

See my blog. URL is in my profile. I put all the links I am following there. :-)

The high points...the NHC just came out with another update. And CNN is doing wall-to-wall coverage.