Who Will Get Rich from Katrina?

It seems if one has White House connections, one may receive reconstruction contracts:

WASHINGTON (Reuters) – Companies with ties to the Bush White House and the former head of FEMA are clinching some of the administration’s first disaster relief and reconstruction contracts in the aftermath of Hurricane Katrina. At least two major corporate clients of lobbyist Joe Allbaugh, President Bush’s former campaign manager and a former head of the Federal Emergency Management Agency, have already been tapped to start recovery work along the battered Gulf Coast. One is Shaw Group Inc. and the other is Halliburton Co. subsidiary Kellogg Brown and Root. Vice President Dick Cheney is a former head of Halliburton.

I guess taxpayers might take cheer that Bush issued this executive order:

WASHINGTON (Reuters) – President Bush issued an executive order Thursday allowing federal contractors rebuilding in the aftermath of Hurricane Katrina to pay below the prevailing wage. In a notice to Congress, Bush said the hurricane had caused “a national emergency” that permits him to take such action under the 1931 Davis-Bacon Act in ravaged areas of Alabama, Florida, Louisiana and Mississippi. The Davis-Bacon law requires federal contractors to pay workers at least the prevailing wages in the area where the work is conducted. It applies to federally funded construction projects such as highways and bridges. Bush’s executive order suspends the requirements of the Davis-Bacon law for designated areas hit by the storm.

In his very good coverage of the FEMA foul-up and how the Bush White House can even abuse tragedy to push partisan wedge issues, Kevin Drum notes:

Remember back in October of 2002, when George Bush took a careful look at the Department of Homeland Security ā€” an organization originally proposed by Democrats ā€” and tried to figure out how he could gin up some pre-election Democratic opposition to creating it. His answer was to insert a bit of strategic union busting into the DHS bill, something that he knew no Democrat could possibly support. Voila! Democrats opposed the bill and the president accused them of not caring about national security. That was good for a pickup of two seats in the Senate. Fast forward to September 2005. What would be a good way of trying to gin up some Democratic opposition to reconstruction in the aftermath of Hurricane Katrina?

Kevin cites this suspension of the Davis-Bacon Act and provides this note for the math challenged:

$9 an hour is about $18,000 a year. The prevailing wage wasn’t about to create any new millionaires on the Gulf Coast.

This believer in markets, however, has one question. If Federal contractors pay less than $9 an hour, how will they attract skilled construction workers? Hopefully, the demand for construction workers will be such that wages rise beyond what the Davis-Bacon Act would require. But then Iā€™m assuming that this Administration actually tries to do a better job in rebuilding New Orleans than they did during the first few days following Katrina.