Here's an excellent article by the brilliant Fred Smith from the Competitive Enterprise Institute (an organization you should be aware of in any case) on Louisiana's upcoming stark choice of economic paths. Given their history of making the wrong choice, I wouldn't bet a lot on doing it right this time, but the lessons provided by their neighboring states might be enough....

http://www.cei.org/gencon/023,04806.cfm

At the end of his letter, Mr. Smith asks a rhetorical question regarding whether New Orleans will be or should be rebuilt. As a possible answer to that, I refer you to the article by George Friedman of Stratfor called "New Orleans: A Geopolitical Prize".

Here is a summary paragraph from near the end of the article, but I suggest you read the entire piece as it is full of insight, history, and the type of calm reasoned approach all too lacking at the moment.

"New Orleans is not optional for the United States' commercial infrastructure. It is a terrible place for a city to be located, but exactly the place where a city must exist. With that as a given, a city will return there because the alternatives are too devastating. The harvest is coming, and that means that the port will have to be opened soon. As in Iraq, premiums will be paid to people prepared to endure the hardships of working in New Orleans. But in the end, the city will return because it has to."