Two economic agendas: Houston vs. New Orleans

City leaders in Houston threw their Stetsons in the air and squealed with glee this week when news came that Lockheed Martin had landed a major contract from NASA "to design and build the agency's next-generation human space flight crew transportation system known as Orion."

The Orion project, unveiled by the Bush Administration in the 2004 election season, aims to enable astronauts to create a moon base from which they can then explore Mars.

The Government Accountability Office also warns the project will cost a staggering $235 billion by 2025, which, as the Houston Chronicle points out, has made it unpopular even among space enthusiasts:

Echoing the concerns of the GAO, a once-supportive space-advocacy group, the Space Frontier Foundation, characterizes the initiative as "unaffordable and unsustainable."

But boosters in Houston are ecstatic: Lockheed says the project will bring 1,200 jobs to the city, where the company has a facility next to the Johnson Space Center.

Call it "Space Keynesianism," the cousin of that other Southern darling, military keynesianism. Political leaders in Washington and the South may talk a good game about the wonders of free enterprise, but they know how bread is buttered. Government-funded space and military projects are a driving force behind the Southern economy, especially in the boom states of Texas, Florida, Georgia, North Carolina and Virginia (see the Institute's report "The South at War" (pdf) for a detailed analysis of how defense dollars have been key to Southern growth).

Now contrast the affection of Southern politicians for near-endless government-funded economic stimulus for arms and spacecraft with the decidedly anti-government approach taken to reviving the Gulf Coast economy after Hurricane Katrina. The idea of directly investing billions into projects like a Gulf Renewal Corps that could have put local people to work to rebuild their communities was out of the question.

The administration's two-step process for post-Katrina renewal was in effect to (1) hand out $9 billion in almost entirely unregulated contracts to insider corporations, many of which sub-contracted and did little to employ locals, and (2) create the infamous corporate tax-break "Go Zones," which Gulf Coast Reconstruction Watch reporter Sean Reilly exposed in our report One Year after Katrina:

A key feature of the legislation allows Alabama, Mississippi and Louisiana to issue up to almost $15 billion of tax-free "GO Zone" bonds on behalf of companies seeking to build or renovate. So far, however, many of the firms seeking to take advantage of the cheap loans are pursuing ventures at best loosely connected to the devastation wrought by Hurricanes Katrina and Rita.

Not that Lockheed's space projects are without scandal. As the Chronicle reports:

During the past two decades, NASA spent about $4.8 billion on the development of spaceships to replace the shuttles, without ever building any. This included a project called X-33 in which Lockheed was paid almost $1 billion.

The difference is, when it comes to space and the military, no sum is too generous -- and few questions are asked -- when Washington writes checks with taxpayer money. But after the no-bid contractors had their turn at the government trough post-Katrina, people in the Gulf had to fight for every nickel.