The catastrophic government failure that conspired with Hurricane Katrina to devastate New Orleans two years ago will not easily be forgotten. The images were stark–families stranded on rooftops, panicked masses at the fetid Superdome, bloated bodies left adrift–and the soundbites terse, with Bush’s back-slapping “Heckuva job, Brownie” providing the best summary of his Administration’s sense of accountability to the people of New Orleans. In the media and among the American public, the outrage–at the suffering, injustice and official incompetence–was seemingly universal. So it is difficult to understand how New Orleans could have been allowed to endure what came next.

When the Gulf Coast desperately needed a massive public works program, what it got was a stronger dose of the very same toxic neoliberal policies that laid the groundwork for the Katrina disaster. Public services were starved as critical government functions were outsourced to politically connected corporations. Because the Bush Administration refused to allow emergency funds to pay municipal workers’ salaries, 3,000 were fired. Millions in taxpayer funds went to crony firms such as the funeral company Kenyon, a division of Service Corporation International (a big Bush donor), which was hired to retrieve dead bodies at $12,500 apiece. The privatized reconstruction regime was not only grossly inefficient; it cut out rank-and-file New Orleanians who actually cared whether the effort succeeded or failed. As Nation columnist Naomi Klein points out in her new book, The Shock Doctrine: The Rise of Disaster Capitalism, “Washington could easily have made it a condition of every Katrina contract that companies hire local people at decent wages to help them put their lives together. Instead, the residents of the Gulf Coast…were expected to watch as contractors created an economic boom based on easy taxpayer money and relaxed regulations.” With little oversight, these contractors have exploited the most vulnerable. Undocumented immigrants, typically paid meager wages, make up a quarter of the reconstruction workforce. Meanwhile, much of the city is being rebuilt with the cheapest labor of all: prison labor.

With such a perversely skewed economic development strategy, the spiraling social crisis that followed–documented by the articles in this issue–was probably inevitable. Still, it was helped along by yet more bad policies. The public school system was drastically remade and is now a patchwork quilt of charter schools along with a small, withered state-run system. Housing remains a huge problem. When rents spiked to 45 percent above pre-Katrina levels, the government responded by slating 5,000 public housing units for demolition. As attorney Bill Quigley puts it in this issue, “Neighborhoods are breaking down because we don’t have the families back. We don’t have a lot of the churches. We don’t have the infrastructure in poor communities that we had before.” Given all this, the rise in crime that has disfigured the city was practically foreordained. With the murder rate hitting record highs, law-and-order politicians prescribed a crackdown, and arrests now stand at an average of 1,300 per week.

The solutions to these problems are almost too obvious to mention–but they all depend on the creation of a very different sort of public sector, one that works for the people, not for business elites and Washington ideologues. That does not seem to be in the cards right now. Instead, communities, aided and inspired by outside volunteers and charitable donors, are taking matters into their own hands. They are fighting to restore their neighborhoods, keeping in mind the delicate ecology around them. They are preparing as best they can for the next storm.