The catastrophe, as many seem to grasp, is one of those big moments that jolt public consciousness and alter the course of national history. I would go further and describe it as an exclamation point that marks a dramatic breakdown for the reigning right-wing orthodoxy, the beginning of its retreat and eventual demise. This by no means insures the restoration of progressive alternatives, but events have at least reopened the argument conservatives thought they had won.

A profound political question is suddenly on the table: Must the country continue to give precedence to private financial gain and market determinism over human lives and broad public values? Or shall we now undertake a radical restoration on behalf of society and people? New Orleans, strange exception though it seems, is actually an extreme microcosm of the nation’s general afflictions and social inequities. It’s the place where reform politics can launch its long-deferred counteroffensive.

The conservative mindset is flummoxed by these tragic new circumstances. Republican ideologues acquired governing power by promising to liberate Americans from the government’s intrusive powers, but they succeeded all too well. If “market forces” are allowed to design the recovery program, much of New Orleans and environs will be plowed up (think no-bid contracts for Halliburton and Bechtel) and reduced to a theme park for hot jazz, good restaurants and grubby jobs.

Newt Gingrich, always a reliable bellwether for the right-wing zeitgeist, is preaching that the right must change its tune “quickly” or face big losses. The old politics–provoking culture wars about “moral values”–will no longer suffice, he explained in a memo circulated among Republicans and the press. The new politics is about “performance,” in which GOP government has to deliver. But while Gingrich’s rhetoric is different, his ideas are the same old, same old. He urges George W. Bush to create a huge tax-free zone along the Gulf Coast where business enterprise will be subsidized and the oil industry relieved of meddlesome environmental regulation. The President’s first noble gesture after the flood was to cut wages for construction workers on public projects.

More encouraging evidence of changed politics comes from the left. Some bold Democrats are doing what they haven’t dared to do for many years, even decades: They are invoking their New Deal legacy and applying its liberal operating assumptions to the present crisis. In the totality of the Gulf Coast destruction, the economy and the society have been collapsed. As New Dealers understood, you cannot fix one without fixing the other. And only the federal government has the resources and authority to lead such a complex undertaking.

Senator Edward Kennedy calls for a “Gulf Coast Regional Redevelopment Authority,” modeled after FDR’s Tennessee Valley Authority, to lead the rebuilding. Former Senator John Edwards proposes a vast new jobs program, patterned after the New Deal’s Works Progress Administration (WPA) and Civilian Conservation Corps (CCC), in which the displaced and the poor are hired at living wages to clean up and rebuild their devastated communities. In the week after Katrina, Representatives Dennis Kucinich and Stephanie Tubbs Jones swiftly rounded up eighty-eight House co-sponsors, including some from Mississippi and Louisiana, for a similar initiative.

As the dimensions of this challenge become clearer, reformers will discover other New Deal models they can emulate and adapt to present circumstances. For instance, in the 1930s Roosevelt’s Reconstruction Finance Corporation was a central player in rebuilding the industrial economy, because it acted like a public-spirited investment banker empowered to channel startup capital to collapsed companies, provide temporary protection from creditors and impose equitable terms on how the private firms relate to social priorities. This time cities and schools need similar help.

The government, meanwhile, must quickly become the employer of last resort across the region. Neither local school systems nor small-business employers can recover unless their communities have a large, reliable base of wage incomes–that is, government-financed jobs to sustain customers and taxpayers. You can’t rebuild homes without tools and materials or temporary relief from mortgage defaults. You can’t reopen schools if their tax base is gone. You can’t prevent poor people from sliding back into desperate conditions unless government creates ladders of upward mobility.

Recognizing such social-economic connections was the essence of New Deal innovation. Serious politicians need to jump-start their imaginations. This born-again New Deal spirit isn’t backward-looking but instead can seize the opportunity to address grave issues–such as the myriad ecological dangers spawned by our hydrocarbon economy–that status-quo politics neglects, like the New Orleans levees.

This new ferment is only just beginning, but the crisis is young, and the hunger for big reform is rapidly gaining momentum. The media haven’t paid much attention so far because the New Deal proposals probably sound like historic relics. But the aptness of the ideas–aggressive government intervention, integrated across many fronts–will become clearer to people if Democrats re-educate the electorate. That re-education can begin if progressives first provoke a big argument among Democrats themselves. What do they now believe about government’s obligations to society? This is a good fight to have and, besides, intramural political spats are always newsworthy. This one will be substantive as well. Terrible events have handed Democrats the material for a strong and enduring governing agenda.

George Bush, meet “Dr. New Deal.” Reactionary Republicans loathed FDR and sneered at his corny slogans, while he wickedly ridiculed them in return. The voters understood his spirit and forgave the mistakes. They laughed with him and loved him for caring.