Food for thought from Joel Kotkin & David Friedman at TNR:

While these and other basic needs went unmet, New Orleans politicians, like so many liberal leaders in cities nationwide, focused on an elite-driven agenda designed to create an ephemeral economy rather than a broad-based one. Their lack of proper economic focus allowed what should have been a healthy city to fall largely into poverty and decrepitude. From its earliest origins under the French, New Orleans’s most fundamental commercial advantages arose from its role as the largest port at the intersection of the Mississippi and the Gulf of Mexico. Yet for decades New Orleans leaders sought to attract conventions and the arts while failing to compete with Houston and other places around the Gulf in developing a high-wage economy around trade activities and related services.

Despite being one of the nation’s premier entry points for grain and oil, New Orleans has proved remarkably unable to stimulate production or wholesale trade jobs. Before the storm hit, these two essential sectors accounted for 11 percent of the city’s job base; in Houston, where many of the Katrina refugees may end up staying, they account for 14.2 percent. In addition, New Orleans relied upon the leisure and hospitality sector to provide 13.3 percent of its jobs; in Houston, the tourism industry has a hold on only 8.7 percent of the city’s jobs. The difference between the two cities’ economies is perhaps best illustrated by the fact that between 1994 and 2004, the number of jobs in New Orleans grew by only 4.3 percent compared to 23.1 percent for Houston, in part because the Texan metropolis has successfully attracted jobs connected to international trade.

So if not in trade and commerce, where did New Orleans place its bets for the future? Like many cities, its leadership gambled that the arts, nightlife, and a tourist economy could build prosperity, or at least a semblance of it. Just a month before Katrina hit, the city hosted a major conference in which edgy culture and high-end-tourism were touted as the key to its economic prospects. Other cities, of course, have also embraced the disastrous idea that hipness, not economic fundamentals, would lead to urban renewal. And in all of them–Detroit, Baltimore, San Francisco–the cost of this strategy has been substantial. Trying to foster a cool atmosphere has done little to stop Detroit’s economic decline. Baltimore struggles with rising crime and a tepid economy. And San Francisco, despite all its natural advantages, has lost jobs and much of its middle class, mutating into a playground for young, affluent liberals.

The problem is that while great restaurants and music appeal to the urban rich, the economics of tourism leave huge segments of the population behind. In contrast with jobs in trade, manufacturing, engineering, medicine, and finance, culture and tourism pay very low wages and permit little or no upward mobility. For example, a 2002 study for the AFL-CIO showed that nearly half of all full-time hotel workers could not earn enough to keep a family above the poverty line.

Read the whole thing. I might add that San Francisco has had the advantage of a very large and prosperous state to leech of of. Not so with New Orleans.