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Hurricane Katrina exposed a fundamental difference between private-sector and public-section preparedness and the divergent abilities within each realm to protect their assets and their people. For New Orleans residents in the last days of August 2005, the main concern for each and every one of the citizens was leaving the flooded city. Some left in their cars after the first storm warning, but many were left with no resources to evacuate the city and were, therefore, dependent on government services. The vice president of a large bank told us that “there was no problem in getting out of the city. . . . And then we got in the car. We dashed out of here.” The easy confidence expressed by this executive was not shared by all business managers and owners. In this chapter we contrast public- and private-sector ideas about protecting people and assets, and we present the Katrina experiences of a number of business owners who were able to marshal resources that were considerably greater than those available in the public sector. We focus primarily on their responses in interviews we conducted over the twelve months following this costliest hurricane in history.1 Some companies had planned for a crisis, practiced disaster preparation, and built up resources in case of an emergency, but many small businesses—without access to the capital or the reserves on which others were able to draw—had no such ability to prepare. Although the scene of tens of thousands waiting at the Superdome for food, water, and transportation from the government is etched in the memory of our country, the complexity in private-sector responses bears deeper scrutiny. The story of small business and the Small Business Administration (SBA)— both in the evacuation and in the recovery of New Orleans—is a particularly important one for understanding private-sector preparedness and the problem of leadership. In the face of the coming storm, many small businesses were just getting by from day-to-day sales. This reality has also shaped the recovery 135 10 VVVVVVVVVVV Protecting Our Assets Private and Public Responses to Katrina JOHN R. AIELLO LYRA STEIN JOHN R. AIELLO AND LYRA STEIN 136 process. As one small-business owner noted, “If you’ve got the money, okay. I mean if you don’t have the money, you can’t get back in business. The banks won’t loan you the money. SBA can’t get to you. I mean the crisis, the magnitude of it is that if my place had burned down to the ground, I would be further along.” For many of these business owners, government agencies like the SBA and the Federal Emergency Management Agency (FEMA) were just as crucial for the process of returning to normal as such agencies were for private citizens. Small businesses are the “economic engine” that drives the recovery effort.2 With small-business recovery acting as the rousing energy in the economic recovery, the SBA is integral in this effort. However, as another business owner noted, “I have applied for a SBA disaster loan and have been turned down twice. . . . It’s a catch-22, you see. They say that, well, with the things that are going on, and my financials, and showing that in the past eight months how bad things have been that I couldn’t pay the loan back. And I’m saying, ‘But, hello! Isn’t that what a disaster loan is for? To get you through the times until you can get back up?’” Small businesses had to negotiate a complex bureaucracy. If a business was unsuccessful and rejected by the SBA and did not receive any money from insurance coverage, it could apply to FEMA for a disaster recovery loan. But, a business could only seek FEMA assistance if it was denied an SBA loan, and it took about three months to receive a response to the application. In addition, if one was denied an SBA loan, it took additional time for this denial to be processed by FEMA.3 Small-business owners expressed many of the types of frustrations with this system as did the private citizens struggling to recover. Those who were able to evacuate the city and had the resources to take action early had a much different experience than those who were not as fortunate: “I actually got a very nice loan. I got a $250,000 loan, secured by my worthless house. . . . The breach was on the 30th? I think...

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