New Orleans: I Have Seen the Future, and It's Houston

For many who love New Orleans, the changes that accompany commercial growth inspire fear—but in the meantime the city's economy stagnates and its population declines

A 1963 parade through New Orleans' French Quarter (Jim Bourdier / AP)

For the past century or so, New Orleans has been a city that has gotten by on charm alone. Very few people here seriously consider New Orleans part of the "New South" or of the "Sunbelt" or of any other geoeconomic entity conjured up in the past two decades. And, until a few years ago, hardly anyone in New Orleans minded being left out. New Orleans might be poor, but it is happy. In fact, during last year's mayoral race, one of the candidates ran TV commercials that showed a bustling skyline with a voiceover ominously intoning, "Do you want New Orleans to become another Houston?"

Despite the fact that New Orleans has perhaps the finest natural location in the country for commerce, the city's economy has stagnated for at least twenty years. Population has declined; unemployment is among the highest in the South; and New Orleanians have remained among the poorest in the nation. Little has changed since the 1970 Census, which showed that out of the fifty largest cities in the country, New Orleans had the highest percentage of families living below the federal poverty level: 21.6 percent, against 18.4 percent for second-place Newark. New Orleans also ranked last among the fifty cities in percentage increase in median family income between 1960 and 1970, and forty-third in median years of education per adult.

It wasn't until 1975, when James Bobo, a University of New Orleans professor, published a highly critical report on the state of the local economy, that the public began to pay attention to what was going on. Bobo's report was entitled "Pro Bono Publico?"—a play on the motto of the most prominent Mardi Gras parading club, the Krewe of Rex, whose members are the sort of civic leaders that Bobo blamed for the city's stagnation. Bobo's thesis was simple: New Orleans had lost its industrial base. Manufacturing jobs were declining year by year, with the slack taken up by lower-paying, less stable jobs in service industries, mainly tourism. The steady fall of the economy had taken place with the acquiescence, if not the blessing, of the city's political and business leaders, who tended to like things the way they were and who probably feared the kind of social change that more industry would bring.

The politicians, businessmen, and socialites who run New Orleans have through the years practiced their own brand of benign neglect. And the neglect—at least until recently—really has been quite benign. New Orleans, despite its tropical fecundity and its pervasive sense of impending violence (storms approaching from the Gulf, a murder rate about twice as high as the national average, as well as a major proportion of disasters highrise fires, mass lynchings, yellow fever epidemics, ferry sinkings, snipers, race riots, and hurricanes), has always been an easy city to live in—even if you're poor.

Until five years ago, a ride on a bus or streetcar was only fifteen cents. In 1970, a plate of red beans and rice—standard Monday fare in the city and when well prepared, a culinary triumph, redolent of Tabasco, shallots, and spices, and the richness of long-cooked ham hocks, which turn the sauce to velvet—was only twenty-eight cents at Buster Holmes, a famous French Quarter hangout on Burgundy Street. Smoked sausage on the side brought the tab to seventyfive cents. Plentiful natural gas in the state made utility bills cheap: five years ago, the average monthly charge was around $20. And then there were free attractions such as Carnival—the two weeks of parades and drinking and balls leading up to Mardi Gras; jazz funerals; band concerts in Jackson Square; the smell of roasting coffee along Tchoupitoulas Street in the early spring; and the joy of standing behind the French Market in May and watching the turgid Mississippi rush by.

Haute cuisine

Most of these pleasures still obtain. The nickel phone call—a relic of the Huey Long populist era—survives. A streetcar ride up St. Charles Avenue along a grassy median strip planted with camellias and azaleas is now thirty cents, and you can pull the windows all the way down and feel the breeze. No air-conditioning. A lunch of red beans and rice and sausage is now up to $2 in most restaurants, but you can dine for just under $10 on shrimp remoulade, fresh lake trout amandine, and dark chicory coffee at Galatoire's, which, after a declining spell, ranks again as the best restaurant in the French Quarter and one of the best in the country.

People in New Orleans (which is pronounced by the populace either "New Or-lee-uhuns" or "N'OR-luhns") still spend a good deal of their time arguing the merits of restaurants and not all the restaurant talk is about Galatoire's or Arnaud's or Antoine's.

In recent years, most of the conversation has centered on two places on the West Bank of the Mississippi—LeRuth's, in a Victorian cottage in Gretna, about fifteen minutes from the French Quarter, and Mosca's, a simple roadhouse with a Budweiser sign out front, about forty-five minutes from the center of town on the road that leads to Avondale Shipyards, the state's largest employer. Mosca's serves a Creole-Italian mélange of cuisine—oyster casserole with garlic and a touch of anise; broiled shrimp in pepper, butter, and rosemary; homemade sausage and homemade pasta. LeRuth's cooking is more of the haute variety: oyster and artichoke soup, fried softshell crab topped with lump crabmeat in lemon butter, cantaloupe sherbet and mandarin ice.

The genius of LeRuth's is Warren LeRuth, a product of New Orleans's tough Third Ward (a largely residential and light industrial area called Mid-City) and of Jesuit High School. Practically every white Orleanian of note went to that school—from former Mayor Moon Landrieu to the popular local TV sportscaster Hap Glaudi, who spends about half of each show congratulating aged couples on their golden wedding anniversaries and giving out the scores of CYO Biddy Basketball League games. LeRuth is the sort of local hero who belies Walker Percy's claim in Lancelot that in 300 years of history, New Orleans "has never produced a single significant historical event, one single genius, or even a first-class talent—except a chess player, the world's greatest. But genius makes people nervous, so he quit playing chess and began worrying about money like everyone else. It is altogether in keeping that the famous Battle of New Orleans was fought after the war was over and was without significance." (Percy might have pointed out that the battle was fought not in New Orleans but in Chalmette, in St. Bernard Parish to the east of the city, today a blue-collar neighborhood that constitutes another world entirely.)

And, oh yes, the chess player was Paul Morphy, the only world champion this country produced before Bobby Fischer. Morphy's old house is now Brennan's Restaurant on Royal Street. In the end everything here gets back to food.

Gardens of the past

To food, or to buildings . . . In the past ten years or so, this city has rediscovered its past. Fortunately New Orleanians in the fifties and sixties lacked the energy to tear down their nineteenth-century architectural treasures and uproot the spreading live oaks. Now, most of the treasures remain. The new generation of young professionals in their twenties and thirties make a pastime of renovating Greek Revival cottages and Victorian shotguns (long, narrow New Orleans cottages exactly one room wide and four or five rooms deep, so called because you could shoot a shotgun through the front door and the charge would pass through every room and out the back).

Much of the awareness of the value of old houses can be traced to a series of volumes begun in 1972 and published by the Friends of the Cabildo, an organization of supporters of the Louisiana State Museum. Each of the books—there have been six so far—catalogues historically important buildings in one neighborhood.

New Orleans is, above all, a city of neighborhoods. A study made by the architectural firm of Curtis & Davis in 1974 identified eighty of them. The two most important ones now being renovated are the Lower Garden District (the area between the Garden District itself, where the city's most glorious mansions were built, and the downtown business district) and the Faubourg Marigny (across Esplanade Avenue, downriver from the French Quarter).

Both of these neighborhoods had been occupied by poor whites and blacks before the renovators moved in. The Victorian cottages are now painted in pastels with handsome contrasting shutters. Parks have been cleared and replanted, and both neighborhoods are fine places to live. But in the process of renewal the natives have been forced off their own land, and while the city's architecture has been preserved, its folkways are being destroyed, especially in the Irish Channel area near the Lower Garden District.

There are neighborhoods, however that remain relatively untouched by upper-middle-class civilization: genteel Gentilly, the setting for Walker Percy's Moviegoer and the city's first suburb; Bywater, downriver from the Faubourg Marigny and one of the earliest settled parts of the city; and Old Algiers, a ten-minute ferry ride from Canal Street and still a part of New Orleans proper though it sits in splendid bucolic isolation.

Populous Suburbia

Compared to the charm of the city's neighborhoods, New Orleans suburbs tend to be pretty desolate places. The largest, Metairie, consists mainly of a sea of tract houses built in the sixties and of singles' apartments. Across the river, Gretna is much of the same. Metairie and Gretna are both parts of the great suburban parish of Jefferson, which will probably surpass Orleans Parish (New Orleans itself) in population in another fifteen years. Currently the population of Jefferson is around 420,000, of Orleans, 560,000.

Jefferson's chief political figure, Assessor Lawrence Chehardy, for years attracted New Orleans residents to his parish with some of the lowest property taxes in the land. Then, in 1974, Chehardy managed to get the new Louisiana constitution to adopt an article that bars all property taxes on homes valued under $50,000. Chehardy has since stepped down as assessor in favor of his son, and devotes most of his time to trying to get the legislature to raise the property tax exemption to $100,000 homes.

Meanwhile, Jefferson continues to distinguish itself as one of the most poorly run rich counties in the United States. Its schools and roads are as bad as those of Orleans Parish (even though Jefferson's per capita income is much higher), and it has far more venal public officials (as an investigation of graft in public works by the U.S. attorney's office continues to show).

The migration of whites to the suburbs in the sixties was less virulent than that experienced by the cities the East. In New Orleans, between 1960 and 1970, the white population fell 16 percent while the black population rose by the same percentage. In Newark and in Atlanta, during the same period, the white population fell by 33 percent and 18 percent respectively while the black population rose by 50 percent and 33 percent.

The population of Orleans Parish continues to decline, as it did in the sixties when there was net emigration of both blacks and whites, but the rate of decrease seems to have slowed by about half. Between 1970 and 1974, for example, the New Orleans population declined from 593,000 to 569,000, but by 1976 it had leveled off at 562,000.

Many of the people who leave New Orleans are moving not to the comfortable suburb of Metairie but to the more fertile employment territories of Houston, Dallas, and New York. New Orleans is thereby losing some of its best and brightest. A few years ago, a TV commercial for a local bank featured a young black man who had graduated at the top of his class at Xavier University. The commercial told how the bank had financed the young man's education and how he was now a great addition to the community, working for a leading engineering firm. What the ad didn't say was that the leading engineering firm is in Atlanta. Similarly, top graduates of Tulane Law School regularly go to work in New York.

Still, there is a strange charisma that draws many native Orleanians back to the city after a few years of apprenticeship in the banks of New York or the law firms of Washington. The future of the city is, in great measure, in the hands of these prodigal sons and daughters.

The ones who have returned in recent years have found that while the city's charms have been kept intact, the world now is too much with New Orleans. Real estate prices have soared and rents have gone up; utility rates are much closer to the national average; and life has become more of a scramble, more the way it is in Cleveland or Schenectady. Finally, in the mid-sixties and early seventies, when the city felt itself forced to face the fact that so many of its people were poor, and without jobs, its solution was, of course, to erect a building—the Superdome, the largest covered stadium in the world.

The Superdome sprang fullblown from the forehead of one Dave Dixon, a local promoter and former car salesman. Dixon managed to sell his idea in 1965 to Governor John McKeithen. Dixon tells the story that after he described his idea to McKeithen, the governor "bolted out of his chair and said: 'By God! That will be the greatest building in the history of man. We're gonna do it!'

The Superdome did not, however, turn out to be the greatest building in the history of man, or even the second greatest. It was beset with cost overruns and political scandals. Voters in 1966 were told that the Superdome would cost $35 million, the same as Houston's Astrodome, which it would dwarf; instead, the final figure was $165 million. The Dome was supposed to make an operating profit its first year; instead, it has shown a large deficit for each of its three years of operation, and no one today seriously thinks the Dome will ever come close to paying for itself. Last year's operating loss was $5.5 million, not including debt service, which runs to $10 million a year. In fact, the Dome costs $50,000 a day to keep open—whether it is used or not.

Civic boosters in New Orleans tend to point to the Dome as the main impetus behind the city's building boom of the past ten years. It is probably true that hotel chains such as Marriott, Hyatt, and Hilton have come to New Orleans in large part because of their expectations about the Dome. But it is hard to see how the Dome can take credit for office buildings such as the sixty-story One Shell Square (an undistinguished piece of architecture, a copy of a banal Houston tower) or for the $500 million Canal Place office-condominium project which local developer Joe Canizaro is building, with help from the shah of Iran's Omran Bank, along the river at the foot of Canal Street.

At around the same time the Dome was being sold to the public, a forty-year-old financial wizard from Texas named Jimmy Jones was becoming president of the city's second largest bank, the National Bank of Commerce. Jones brought in new deposits and put the money to work with aggressive lending, much of it in real estate. While his direct, abrasive style made him lots of enemies among the city's gentry, it had a profound impact on the city's other banks—profound but brief.

After trying unsuccessfully to get the state to liberalize its banking regulations to allow New Orleans banks to branch beyond the city, Jones left town to become president of the Bank of California. Jones's own bank suffered from some of its adventuresome real estate loans, and two others, the International City Bank and the Republic Nation Bank (the latter a black-owned institution nurtured by Jones himself), failed in 1976 and 1977. These mishaps and the continuing disaster of the Superdome quickly brought the city's effort at economic renaissance to a halt. It had lasted two years.

The Carnival game

It is almost impossible to talk about the economy of New Orleans without talking about the people who are supposed to "run" the city—its gentry, its social elite. New Orleans is perhaps the only large city left in America where birth counts for so much. And it is hard to say just why—unless the answer lies in Mardi Gras, which is a highly structured social ritual rather than a pubic spectacle like the Rose Bowl Parade.

Among the critics of the social order the theory goes that Carnival parades provide bread and circuses for the masses, who scramble for beads and coins tossed from parade floats by people of privilege. There is royalty in Carnival—a careful hierarchy of krewes (or clubs) which stage balls and parades and appoint kings or queens and princesses.

The best-known krewe, Rex, holds its parade on the morning of Mardi Gras. It touts itself as the "civic krewe"; recent years Jews and non-natives and politicians have been taken into the membership. Blacks have not—but least a few of them have been invited to the Rex Ball on Fat Tuesday night. Rex is still run, however, by the gentry, and the King of Carnival comes from its ranks. This year's king was Edmund McIlhenny, a lawyer (two other members of his small law firm were past Rexes) and a member of the Tabasco family; the queen was Kitty Duncan, a Radcliffe sophomore whose father is an awning tycoon and one of the few socialites who was close to Mayor Landrieu.

Carnival is a game that almost everyone in New Orleans plays; there are sixty parading organizations, each a private club and each numbering 200 to 500 members. There is a distinct social order to the groups—the krewes of Comus (the oldest krewe and one of the smallest), Momus, and Proteus are at the very top. Like the city's leading downtown luncheon clubs—the Boston, the Pickwick, and the Louisiana—their membership is generally restricted to natives and to the circle of families that has dominated society, business, and the law here since the Civil War.

This society, it should be noted, is quite distinct from Creole society—the descendants of the French and Spanish colonists who settled mostly in the French Quarter in the eighteenth and early nineteenth centuries. The locus of Creole society was Esplanade Avenue, the downriver border of the Vieux Carré, while Mardi Gras society was concentrated in the Garden District and the uptown area around Tulane University—what was called "the American Sector," above Canal Street. Creole society is long gone now, but it doesn't hurt at all in Carnival society to have a French or Spanish ancestor.

Members of this Carnival society have little political power themselves these days: the last serious attempt by a King of Carnival to run for office was Leon Sarpy's in 1973; he was defeated for the state supreme court by Mayor Landrieu's former law partner, Pascal Calogero. However, they still dominate New Orleans's powerful non-elective boards—the Dock Board, the Board of Liquidation (which approves bond sales), and the Sewerage and Water Board (an important institution in a city below sea level).

The power of status quo

But the main power of the gentry is a purely negative one. A brash businessman from Texas, such as Jimmy Jones (or even a non-brash businessman from Texas, such as Jones's successor at the bank, Rodger Mitchell), who would have been a definite celebrity in Houston, couldn't make the Boston Club or the Dock Board in New Orleans. Along with top executives from Shell and Exon, Jewish real estate barons, and politicians, Jones would lunch at the frankly unsocial Petroleum Club or International House or the Sazerac Restaurant in the Fairmont Hotel (formerly the Roosevelt Hotel, Huey and Earl Long's haunt).

The style of these nonnatives dos not seem to mesh with that of the dean of Carnival society—men such a Richard Freeman, who owns the local Coca-Cola franchise, and Darwin Fenner, as in Merrill Lynch, Pierce, Fenner & Smith—so they aren't accepted into the inner circle. This sort of exclusion is practiced on a smaller scale every day in New Orleans, and it is cited by members of the city's Economic Development Council as a major deterrent bringing new businesses into the city.

New Orleans society is not rich or clever or fashionable or outrageous or any of the things that society tends be in more cosmopolitan cities these days. It is simply well-bred and bland and its blandness is reflected each morning in the Times-Picayune, the city's leading daily paper (the other daily is the States-Item, which has half the circulation and about a tenth the influence, though it does have a few very good writers; both the Picayune and the States-Item are owned by the Newhouse chain).

The best adjective to describe the New Orleans dailies was used ten years ago by Calvin Trillin: "discreet." One is rarely surprised by the papers, and rarely enlightened either. The dailies are not well liked in New Orleans, but they are enormously influential. "If it isn't in the Times-Picayune," says one local lawyer (influential himself), "then it hasn't happened. That's the attitude of people here."

The new mayor

Stepping into this fairly dismal state of affairs on May 1 was the new mayor, Ernest N. ("Dutch") Morial, a black man with white skin, a New Orleans Creole with a French heritage (his parents spoke French at home). Morial was the first black man to graduate from LSU Law School, the first black state legislator since Reconstruction, and the first black judge to sit on the state court of appeals. Now he is New Orleans's first black mayor and the black mayor with the largest constituency in the South.

Morial's victory last November was something of a fluke. A black man wasn't supposed to have been elected mayor in 1977, especially since black registered voters represented only 43 percent of the electorate. But in the primary, the two middle-of-the-road candidates were quite surprisingly squeezed out by two special-interest candidates: Morial, who received 60 percent of the black vote and 7 percent of the white, and Joseph V. DiRosa, a city councilman who had defeated Morial in a council race in 1968. DiRosa's appeal was to older, low-income, conservative white voters—the ones who lacked the means to move to the suburbs and who were unhappy with the way blacks and liberals had dominated Mayor Landrieu's administration.

In the end, Morial ran a surprising first in the primary, 5000 votes ahead of DiRosa, who in turn edged out State Senator Nat Kiefer by 250 votes. Morial's victory in the runoff was assured two weeks into the second campaign when he trounced the inarticulate DiRosa in a TV debate. Morial is prone to bureaucratic jargon (his favorite phrase is "I will utilize the systemic approach to government"), but he comes across on television as cool and conservative—just what fence-sitting upper-middle-class whites were looking for.

The five-and-a-half month interregnum between Morial's election on November 12 and his inauguration on May 1 was the result of an oversight: a new law had eliminated the usual January general election, but it neglected to change the inauguration date.

While the transition period gave Morial a good chance to organize his administration (he has appointed twenty citizen task forces to investigate practically every aspect of city government and a twenty-nine-person advisory board to pick a new police chief), it also caused the new mayor a certain amount of financial hardship. Shortly after the election, he announced at a press conference that he was looking for a job. Eventually, he took three: he taught a course in campaigning at the University of New Orleans, served as a fellow at the Institute of Politics at Harvard, and acted as a consultant to a local TV station (a post that brought him some criticism).

New emphases

A good deal is expected of Morial, and he may be able to deliver. While Mayor Landrieu spent most of his time trying to improve race relations, seeking money from Washington, and making a name for himself nationally, Morial soon after election addressed himself to the city's severe economic problems.

In mid-January, he made his first major post-election speech. He talked to the Metropolitan Area Committee, an establishment-oriented group of businessmen, and he talked in the blunt way that few mayors of New Orleans have had: "In our urban ills, we differ from New York, Atlanta, Newark, Chicago, Houston, Dallas, and other great cities, primarily in the fact that we have never realized our great potential. We have preferred to live in an ancient dream of economic magnificence just around the corner while thousands and thousands of our citizens have never climbed out of soul-searing poverty . . . ."

Morial closed by talking about a study made by Professor Charles Chai, formerly of Tulane, on the power structure in New Orleans. Chai's methodology, Morial said, "consisted of asking key individuals which civic leaders were necessary to insure the success of a project. He then went to these people and repeated the question, finally coming up with a three-tiered list. But what astounded Dr. Chai was the fact that a majority of people failed to mention the mayor as a man essential to the communal equation."

The fact that the mayor has not historically been very important to the running of the city has made Morial's ascension a fairly easy one, despite his race. Race relations in New Orleans are not much different from those anywhere else in the country, which is to say that the Kerner Commission's characterization of America being two nations, divided by race, is still true. For example, only 25.7 percent of black adults in New Orleans have finished high school, compared with 52 percent of whites. (Whites, by the way, abandoned New Orleans public schools when integration came in the early sixties, but in recent years many young white professionals are sending their children to integrated public schools, half black and half white, mostly in the French Quarter and uptown.)

Race relations are probably a little better here than they are elsewhere in the South for two reasons. First, blacks have lived in proximity to whites ever since the city was founded; even in the most fashionable parts of uptown New Orleans, a block of mansions occupied by whites can lie next to a block of run-down wooden cottages occupied by blacks. Second, for the past ten years blacks have had an important role in conventional city politics, playing the game the same way that white ward heelers have played it for decades. The two black political organizations that helped Landrieu get elected—SOUL and COUP—have replaced white groups such as the Choctaw Club and the MidCity Democrats as experts in City Hall patronage.

Within another few years, New Orleans will have a slight black majority in population, but whites still have a significant edge in voter registration. Numbers, of course, do not equal power in this city, and Morial realizes that he can't govern without the support of the white establishment. In fact, the gentry was quite relieved that Morial beat DiRosa, who was much more virulent in his opposition to the social order. This is not to say, however, that the gentry supported Morial in the runoff; most of the socialites sat the election out. And while most aren't racists of the crude variety, their view of blacks is decidedly archaic: one of the city's leading investment bankers was quite liberally tossing around the word "nigger" the other day in polite conversation with strangers.

Morial may fool many of these men. He could emerge as the strongest mayor in the city's history. But, in the end, there is considerable doubt whether anyone can really change things here. Very little changes in New Orleans. The city's charms endure. New Orleans remains the municipal equivalent of a banana republic, a tropical paradise where the friendly natives unload the freighters by day and pull down the tourists' beds for the evening.