New Orleans truths

Richard grew up in Pontchartrain Park, where his grandmother’s house was flooded by Hurricane Betsy years ago and again by Katrina. Richard moved away, first to Howard University and then to Harvard Law School. After a stint in corporate law, he arrived at one of the great Wall Street banking houses where he achieved great success in trading and investment banking. When we worked together some twenty years ago––on a project in New Orleans ironically––he commented that he was living a life that was unimaginable to his grandmother, whose great fortune had been to marry a Pullman car conductor back in another era.

Richard does not believe that the levees in New Orleans were deliberately destroyed to flood black neighborhood during Hurricane Katrina. But he would not be surprised. I raised the question in response to reading David Remnick’s article this week in The New Yorker High Water which cited a history of suspicion in the New Orleans African American community that the levees had been intentionally breeched at times in the past to drive out portions of the black community and to create real estate opportunities.

Richard acknowledged that the black community was prone to conspiracy theories, but he was quick to note that one man’s conspiracy was another man’s revealed wisdom. After all, many of the injustices that were inflicted on black people in the past might have sounded like wild rumors before proven to be true. Brutal medical experiments. Officially sanctioned lynchings. Bank redlining.

The battles to come in the aftermath of Katrina will be the stuff of great works of history and journalism over the decades to come. Richard may not have bought the notion that the levees were breeched intentionally, but in terms of the outcomes that he envisions, they might as well have been. “Just watch the money, David, watch the money.” Richard insisted. “A lot of money will be made, and it will not be made by the people who have left and whose homes have been destroyed.”

The smart money will as surely come into the Crescent City in the coming months as it did into New York in the wake of 9/11, for as Richard noted in an offhand manner, “We both know that for the really smart investors, there are no disasters, just value opportunities.”

Within the political universe there is opportunity as well. The post-Katrina diaspora may enable the Republican Party to finally achieve the lock on the Louisiana Electoral College votes that has heretofore eluded it. Louisiana, alone among the states of the deep south, has resisted the efforts of the Republican Party––begun by Richard Nixon’s Southern Strategy and perfected in the neo-racialist code of Lee Atwater––and has to date been in play in the quadrennial presidential battles.

With memories of the Kingfish still resonant in the political DNA, and its unique cultural heritage, Louisiana continues to have a Democratic Governor and Senator. However, the local political establishment is keenly aware that the patterns of migration in the wake of the hurricane may well affect the state’s political future. After all, Senator Mary Landrieu won her last Senate race by just 40,000 votes, far fewer votes than there are seats in the Superdome. So it is not just money that is at stake in the reconstruction of Pontchartrain Park. If the people do not return, it may spell the doom of the statewide Democratic Party as well.

Richard is one of the smartest guys I ever worked with. Period. And he believes that the AIDs virus was created in a laboratory in North Carolina for the purpose of destroying the black race. While he acknowledges the black community susceptibility to rumors and conspiracy theories, he is more interested in understanding what people believe and how they are influenced by these beliefs than in arguments about what the truth might or might not be.

Richard’s career and fortune have been built on a sophisticated understanding of how markets work. He attributes a measure of his success to his ability to hear rumor and conjecture and not judge their veracity out of hand. “I have learned that it matters less what the truth is that what people believe the truth to be. After all, their behavior is ultimately based on belief, not truth. I really don’t care what the truth is, and in a lot of these things we are never going to know. I prefer to focus on what people believe. If I do that and can anticipate how they are going to act, I am going to make money.”

And as Richard learned from years on Wall Street, money and power are what motivate people. And power flows from money.

“Just watch the money,” He reiterated. “Watch the money.”