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New Orleans asks: 'What recession?'

After Katrina, the Big Easy is slowly attracting newcomers and rebuilding its economy.

(Page 3 of 3)

"New Orleans has become a destination for a generation asking: 'What's next?' " says Mr. Vitrano.

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Katie Del Guercio left a corporate job in Los Angeles a year ago to find more meaningful work. She volunteered in New Orleans for three months and, after leaving for a trip to Europe and a stay with her family in New Jersey, she made up her mind: New Orleans would be her home.

"The city feels like a college campus for grown-ups trying to make things happen," says Ms. Del Guercio, a manager with a progressive job-matching service called Koda.

Many city observers aren't surprised. Errol Laborde, a local bon vivant and editor of New Orleans Magazine, likens the city's comeback to two other historic milestones: the period right after the Louisiana Purchase and the tail end of Reconstruction, when thousands of people emigrated from the East Coast to find their fortunes in Louisiana.

"We're seeing a similar combination of new money and a pioneer spirit in New Orleans today," says Mr. Laborde.

But there are still concerns about the city's current state of affairs and direction.

Housing advocates say that in the process of courting a new workforce – whether college grads from other cities or Hispanic laborers – the city has focused less on helping the displaced and largely African-American population plug into the new jobs dynamic.

And while new apartment complexes are going up with the help of federal and state tax credits, the hardest-hit areas – the Lower Ninth Ward, New Orleans East, and Holy Cross among them – are still struggling to rebuild.

But even on the racial disparity front, there's some good news: The city's focus on charter schools is paying off with test scores showing a narrowing racial gap.

"There's a disconnect between the reality of the economy in New Orleans and the wage structure of the jobs it provides," says New Orleans-based Kalima Rose, a senior associate at PolicyLink, a national advocate for housing equity. But she's also optimistic. "I'm thinking we're going to see over the next four or five years a continued return of neighborhoods and historically displaced people who want to come home but are still trying to organize how to get the resources to do it," she says.

As far as lessons learned, experts say, New Orleans does give a glimpse into how federal aid – whether recovery money or a major stimulus package – can spark localized growth.

On the other hand, Washington's current policy trajectory – higher taxes for the rich and added regulation for industry – seems to run counter to the Louisiana experiment, which is largely based on lower corporate taxes and less regulation, especially for entrepreneurial enterprises.

Still, New Orleans can offer at least one glimpse into how to recover from an economic shock: In a word, insouciance, says Richard Sutton, a banker-turned-royal-cheesemonger-turned-New Orleans entrepreneur.

"Historically, New Orleans people don't necessarily care what the rest of the world thinks or does," says Mr. Sutton, whose St. James Cheese Co. has grown rapidly since he relocated here from London after Katrina. "People here are really asking: 'What recession?' "