Katrina’s “Terror” Highlights “Free Market” Myth

“The Navy is asking for $2 billion in Federal Emergency Management Agency funds, saying in a memo that it wants to restore Northrop’s three Gulf Coast yards, where most of the Navy’s surface ships are built, to their pre-Katrina ‘capacity and profit opportunities.’ Most of this $2 billion would be used to rewrite Northrop’s usual contracts with the Navy to shift the full burden of hurricane-related cost overruns and shipbuilding delays from Northrop to the government. On top of that, Northrop said it expected to get $1 billion from its insurers to repair damaged buildings, despite a nasty battle with one company that has ended up in court. Shipyard delays, the Navy argues, only increase the cost of the ships, which already carry billion-dollar price tags. And because Northrop is the region’s largest employer, with about 18,000 workers, the sooner it returns to full speed, the stronger the local economy will be, both the Navy and Northrop say.”

- Leslie Wayne. “Northrop Grumman Seeks $2 Billion to Repair Hurricane Damage,” NYT’s, 11/17/05.
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Note: The House of Representatives is currently considering H.R. 4133 “to temporarily increase the borrowing authority of the Federal Emergency Management Agency for carrying out the national flood insurance program.” The resolution is entitled the “National Flood Insurance Program Enhanced Borrowing Authority Act of 2005.” It contintues: “The first sentence of subsection (a) of section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)), as amended by the National Flood Insurance Program Enhanced Borrowing Authority Act of 2005 (Public Law 109-65; 119 Stat. 1998), is amended by striking `$3,500,000,000' and inserting `$8,500,000,000',” it reads.