In the long term, Katrina might even have a positive effect on the economy. As rebuilding starts and the huge areas affected are rebuilt, massive influx of money will create new construction jobs and growth in all industries related to adding/fixing the infrastructure.

Look at Florida and the USVI after hurricanes the last 20 years for comparison.

I am not playing down the harm and grief that exists now, nor am I a supporter of the WH, nor do I think that this public statement from them is well-timed. But in the end they are probably right. But it will most likely take 3-5 years before it is true.