Walter Block makes the point that the market rather than government should decide whether New Orleans should be rebuilt:

Private enterprise alone should determine if the Big Easy is worth saving or not. Problems of "transactions costs" will be far easier to overcome than challenges presented by an inept and economically irrational government. Possibly a Donald Trump type might try to buy up all the buildings at a fraction of their previous value, and save his new investment by levee building and water pumping. He wouldn't need to get 100% sales. A lesser amount, say, 90%, might do, and he would only make his initial purchases subject to reaching this level. That is, he might first purchase options to buy.

But I'm not sure this is relevant given the fact our society is organised so that government is very much involved in the infrastructure and it's not realistic to expect we can privatise a whole city at this point in time.

But I would guess it's probably efficient to rebuild in any case even from a purely economical standpoint. Because I think once the water is pumped out, we'll see most of the city is still there, so it would be quite a waste to write it all off. Repairing the city will surely cost less than building a completely new city elsewhere. And indeed, when you ad to that the emotional component of not wanting to lose such a historic place, plus that it's good for the soul, the decision shouln't be too hard.

Here in Holland in 1953 we had almost exactly the same thing happen. Also a flooding of a huge area, because a storm broke the dikes - something which had been predicted by experts for years but they didn't do anything about it. But it was all rebuilt and they made super strong dikes that are expected to break only about once every 10000 years.

Henry Sturman