EconSouth (Fourth Quarter 2006)

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Volume 8, Number 4
Fourth Quarter 2006


Housing, Energy Loom Large in '07

Southeastern Economy to Grow Modestly in 2007

Global Outlook Generally Bright in '07

Carpeting on a Roll in Georgia


Fed @ Issue

Q & A

Research Notes & News

Southeastern Economic Indicators




Q & A

'The Local Communities Have to Determine Their Destiny'

An Interview with Donald E. Powell, Federal Coordinator of the Gulf Coast Recovery and Rebuilding Council

Donald Powell
Photo courtesy of the Gulf Coast Recovery and Rebuilding Council
Title Federal Coordinator
Organization Gulf Coast Recovery and Rebuilding Council
Function President Bush created the council to strengthen federal support for the recovery and rebuilding of the Gulf Coast region affected by Hurricanes Katrina and Rita.
Web Site
Other Powell received his bachelor's degree in economics from West Texas State University and is a graduate of the Southwestern Graduate School of Banking at Southern Methodist University. He has been chairman of the Board of Regents of the Texas A&M University System, an advisory board member of the George Bush School of Government and Public Service, and chairman of the Amarillo Chamber of Commerce. He has served on the boards of High Plains Baptist Hospital and the Harrington Regional Medical Center.

Donald E. Powell has served for the past year as the federal coordinator of Gulf Coast rebuilding following his appointment by President Bush. In this role, he has had the task of developing a long-term rebuilding plan for the region in the aftermath of Hurricanes Katrina, Rita, and Wilma. This plan includes coordinating federal efforts in the area and helping state and local officials reach consensus on their vision for the region. Prior to this appointment, Powell served four years as the chairman of the Federal Deposit Insurance Corp. (FDIC), capping close to 40 years of experience in the financial services industry.

EconSouth: Why did you decide to take on the Gulf Coast restoration challenge?

Donald Powell: I've thought a lot about that. I have always felt guilty about one thing in my life: I never served in the military. That's always haunted me because the men and women in the military are my heroes, together with public school teachers and police officers. This job is a way to serve my country. The second reason would be because the president asked me to. The third is that I've always loved jobs that nobody else wanted. It's the challenge. I don't think anybody would cherish this job or seek it out.

ES: We are now more than a year beyond Hurricane Katrina. What have been the biggest accomplishments in the restoration effort?

Powell: We've been at it for almost a year, and we've been able to assist in building a foundation for recovery. Specifically, the levees are under construction. Housing programs have been established. With infrastructure, we're on the way to recovery.

ES: What are the biggest remaining challenges?

Powell: Insurance. It's available now, but affordability is an issue. We're looking at ways to assist in that area. I think housing is still an issue. It hasn't really kick-started yet even though the money is in the hands of the states. We're trying to facilitate getting the money in the hands of people who are building. Labor is another issue. There are fundamental issues you have in any community: education, health care, and criminal justice. All those core issues affect the quality of life. All those are interconnected.

ES: At the FDIC, you pursued legislation to reform deposit insurance. Do you see a need for legislative action in rebuilding the Gulf Coast?

Powell: It's important that we review the Stafford Act [the Robert T. Stafford Disaster Relief and Emergency Assistance Act]. There's lots of discussion about Gulf Opportunity Zone tax credits, which are incentives that encourage the private sector to rebuild an area. In his speech in New Orleans' Jackson Square [in September 2005], the president talked about home ownership and ways to increase home ownership along the Gulf Coast. The flood insurance program should be reviewed. We're involved in making suggestions about that program.

I've always loved jobs that nobody else wanted. It's the challenge. I don't think anybody would cherish this job or seek it out.

ES: Has bureaucratic red tape been an obstacle in rebuilding efforts on the Gulf Coast?

Powell: There has been a massive amount of red tape. Part of that is the cautious side of government, making sure rules and regulations are followed because we're talking about lots of money. One of the things we're directly involved in now is public assistance project worksheets, which involve the Federal Emergency Management Agency (FEMA), the state, and the local people. It's kind of a triangle, and you've got to work with all of them to set the bureaucracy aside so money will flow into the community.

A second issue we're finishing up is how you speed up the process of getting the money that's been allocated by the states to home owners to assist in the rebuilding. That allocation involves agencies such as the Small Business Administration, FEMA, and perhaps some others. Again, this urgency is overshadowed by making sure this money is spent the way it's supposed to be, that there's no fraud, and that there are proper checks and balances. There's always that tension between accountability and getting the money out fast.

ES: Has this catastrophe made people more cooperative or divisive?

Powell: It depends on which day you catch them. As you know, this was a catastrophic event that affected 1.2 million people. And some 800,000 were displaced. Just assume this happened to you and your family and that you were living in a three-bedroom home, and now you're living in a trailer. Now you're in a strange area. Your kids are not going to the same school, and your doctor's gone. Your life is turned upside down. So there are emotional and mental issues. Some days you're very grateful. Some days you're very angry. I think the local leaders are dealing with all those issues, which is important. I think everybody has a sense of urgency to get everything back. Everybody wants it to happen overnight, and it just takes a little time.

house under construction
Photo by Boston Productions Inc.

ES: Do you have a timeline for when everyone can say the job is finished?

Powell: I don't know. We don't have anything to compare this to. There are things you can look at, like housing. I know in Louisiana they lost 21,000 to 22,000 homes. In Mississippi it's about half that. Do the math. It's going to take a long time just to rebuild those homes. If you started today and said we're going to build so many homes a day, just the mechanics of doing that would take a long time. Meanwhile, it's slowed down because you've got issues about planning.

The local communities have to determine their destiny as it relates to where they're going to rebuild. You've got environmental issues. You've got legal issues. You've got all kinds of issues that slow this process down. And yet you've got people who say, "I'm ready to go back to my home. I want to go now." It's very emotional, political, legal, regulatory, and environmental. All those issues come into play. It's complex.

ES: What are your personal measures of success for this assignment?

Powell: It depends upon the subject. I used to measure everything in relation to debris. Even though that remains an issue, basically it's been addressed and dealt with. We're on third base, headed for home. Now, obviously, I look at economic indicators: sales tax revenues, building permits, airline boardings, bank deposits, number of kids in school, population trends—all those things that are important to life and that measure a vibrant economy. Is it back? How many schools are open? How many hospital beds do you have? What's the criminal element like? All of those things are important. It's a combination of things.

ES: How do you envision the Gulf Coast will look in five to 10 years?

Powell: I can see a vibrant economy in 10 years. I think the infrastructure will be, if not all rebuilt, very close. But more important, the leadership in the Gulf Coast will be smarter and better than it has been in the past. I think each of them are looking at ways to upgrade the socioeconomic environment, and that the leaders will acknowledge needed improvement in areas such as education, medical care, and the criminal justice system. I think all those areas will be better. And when you measure those against historical levels, there's going to be lots of improvement. I think home ownership, property ownership, and unemployment will all be better. I think quality of life as it relates to those three fundamental things I mentioned earlier—education, health care, and criminal justice—will be much better. A lot of it depends on local leadership and the will of the local people. I'd say more than a lot. I'd say all of it.

This interview was conducted by Ed English, a staff writer for EconSouth.