The Ignorant Investor

Anyone can see what's coming. If you want to make money off of Katrina, invest in companies with the best connections to people in power, because the faster the contracts get awarded the less scrutiny they'll get. If you look at Halliburton's profits since 2000, it's a story that just keeps getting better and better, and that won't change until the politicians in charge down in D.C. change. We've got a political system dominated by southerners, set to rebuild southern states, using southern-based corporations. I can't see a single factor that argues against massive wads of federal cash flowing into a relatively few southern pockets:

WASHINGTON, Sept. 25 - Topping the federal government's list of costs related to Hurricane Katrina is the $568 million in contracts for debris removal landed by a Florida company with ties to Mississippi’s Republican governor. Near the bottom is an $89.95 bill for a pair of brown steel-toe shoes bought by an Environmental Protection Agency worker in Baton Rouge, La.

The first detailed tally of commitments from federal agencies since Hurricane Katrina hit the Gulf Coast four weeks ago shows that more than 15 contracts exceed $100 million, including 5 of $500 million or more. Most of those were for clearing away the trees, homes and cars strewn across the region; purchasing trailers and mobile homes; or providing trucks, ships, buses and planes.

More than 80 percent of the $1.5 billion in contracts signed by the Federal Emergency Management Agency alone were awarded without bidding or with limited competition, government records show, provoking concerns among auditors and government officials about the potential for favoritism or abuse.

Already, questions have been raised about the political connections of two major contractors - the Shaw Group and Kellogg, Brown & Root, a subsidiary of Halliburton - that have been represented by the lobbyist Joe M. Allbaugh, President Bush's former campaign manager and a former leader of FEMA.

Time to identify those companies best positioned to take advantage of federal spending in this area. Just like it was time to buy defense contractors in 2002. Much as cronyism in government contracting may disgust us as citizens, as investors there's no reason not to take advantage of it.