Today’s Paul Krugman column is a must read. Shorter version: We are all New Orleans now.

Today, much of the Gulf Coast remains in ruins. Less than half the federal money set aside for rebuilding, as opposed to emergency relief, has actually been spent, in part because the Bush administration refused to waive the requirement that local governments put up matching funds for recovery projects — an impossible burden for communities whose tax bases have literally been washed away.

On the other hand, generous investment tax breaks, supposedly designed to spur recovery in the disaster area, have been used to build luxury condominiums near the University of Alabama’s football stadium in Tuscaloosa, 200 miles inland.

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