I’ve been spending the last two days walking in the New Orleans humidity back and forth from my hotel (the Riverside Hilton) to the hotel where the conference is (the Marriott). I did not pack the right shoes and my feet are killing me. Today’s conference ended early so fortunately, I have the afternoon to roam around, rather than focus on dischargeability issues and means test applications.
But I am afraid this evening, I may be shuttling back and forth between the hotels more than I have in the past two days. Today, New Orleans votes for a mayor. Incumbant Ray Nagin’s post election party is at the Marriott. His challenger's, Lt. Gov. Mitch Landrieu's is at the Hilton. The media trucks are lining up as if they were following a sensational trial. This election, as it turns out seems to be a trial for the City of New Orleans. Tonight, the City renders its verdict. The drama however, has only just begun.
The Anger
I asked my cab driver if he blamed Nagin for everything that happened after the hurricane’s hit. He was silent, and he grimaced. I did not get an answer as quickly as I hoped, so I asked “you do [blame him], don’t you?”
His reply: “It is unfair to blame someone for something that was beyond anyone’s control…but...”. And he silently shook his head, looked out the window, and then quickly changed the subject by pointing out a landmark to us. I did not press the issue further.
There are as many t-shirt stores on Bourbon Street as there are Starbucks in Manhattan. Some of the shirts are what you’d expect. But there are still stores who are selling the “Willy Wonka” shirts with Nagin portraying the fictional candy maker, and referencing the "chocolate" flavor of the city comments that left many people scratching their heads. There are others that say “New Orleans: chocolate on the outside, nutty on the inside.” While anyone with a sense of humor – and who is not from here – can find some hilarity in the shirts, it is clear to me that these shirts have emerged from a place where Nagin is not particularly liked.
What Should Really Make New Orleans Angry
Today’s Times-Picayune’s headline reads "Historic Vote" with photographs of both candidates. Nagin appears casual as he greets constituents in a Whole Foods Market, and a more formal dressed Landrieu, who looks like a cross between Michael Chiklis and Cal Ripkin, is shaking someone’s hand. Yet next to this headline story, is another story.
This week, Mayor Nagin announced that the city would have to pay more to obtain the necessary $150 million line of credit it desperately needs. The original estimates were in the $300,000 range. Now, it appears that because of the City’s “poor credit rating”, the banks want a whopping $3.75 million in up front fees: an increase of over 1,000%. And instead of a 4% interest rate, they want 6%.
This struck me for two reasons: the first, is that the placement of the article on election day makes it painfully obvious who the Times-Picayune endorses (a fact which is confirmed on the bottom fold of the front page and under the article, rather than the editorial page); and the second, it is a reminder of how asinine the banking and credit industry is.
It’s going to cost a cash-strapped and struggling city more to get on its feet because – well... it is cash-strapped and struggling. And who ever wins the election tonight will not only have to lead the City through its rebuilding and its renewal, he’ll have to deal with this financial quandary, while at the same time doing everything possible to avoid having to file Chapter 9 (this bankruptcy chapter is available to municipalities), which would not only be a devastating blow to the City’s image, but I have no doubt would be felt by City residents worse than a kick to the groin.
What is seemingly happening to New Orleans happens to regular Americans every day. Miss a utility bill payment and a default rate can kick-in on other credit card payments making debt more difficult to pay off. I cannot begin to tell you the number of clients I have represented in bankruptcy who have told me that they tried everything to pay off their debts, but their rates kept going up – and up – and up. The last thing they wanted, and indeed, the last thing they needed was to have to seek bankruptcy protection.
When one looks at the damage in the city one can only imagine the struggle these folks have had to endure these past nine months. This City wants and needs to move forward. It must continue to look ahead to rebuilding, and to a renewed New Orleans. That lenders, among them Chase, may be making this process even more difficult is utterly shameful.
