A year after the worst natural disaster in US history, the superpower that failed to save its most beguiling city put aside a day to remember it — and the 1,700 souls who died there when flooding turned whole suburbs into networks of toxic canals. In that year the population of New Orleans has shrunk by more than half. It is unlikely ever to return to pre-Hurricane Katrina levels, as refugees in neighbouring states build new lives there while those who cling to visions of a revitalised New Orleans fail to agree which one to build.

After pancakes and prayers in the French Quarter yesterday President Bush admitted that government at all levels had failed in the aftermath of the storm and since. He promised a better response next time. Meanwhile, a presidency that reveres competence still struggles to emerge from Katrina’s shadow, and a city that was the great American exception is still caught between nostalgia and the imperative to reinvent itself.

It is not hard to depict Katrina’s aftermath as more disastrous than the hurricane itself. The US Army Corps of Engineers admits its repairs to New Orleans’ levees are temporary at best. The city’s poorest neighbourhoods remain largely deserted. About 100,000 applications for rebuilding grants have been received by the Louisiana Recovery Authority, but not one grant has been issued. Swifter action and better co-ordination by myriad government agencies would undoubtedly have saved lives and lowered the cost of reconstruction, now put at $110 billion from federal funds alone.

But individuals, not government, will decide New Orleans’ fate. Should a local authority pay to rehouse people who have moved hundreds of miles away and may never return? Should the US Government spend billions rebuilding neighbourhoods that may unavoidably be flooded again? In the absence of clear, quick answers from federal and state governments, ad hoc groupings of current and former New Orleans’ citizens have been voting with their wallets — and their removal vans.

Raw politics have never been far from the surface of debate. New Orleans’ white-dominated business elite have failed conspicuously to endorse Mayor Ray Nagin’s pledge to preserve it as a “chocolate” city, often hiring Hispanics to replace black employees forced out by the hurricane. Rebuilding has been brisk in largely white middle-class neighbourhoods — which did not need to wait for federal grants to begin reconstruction — but almost non-existent in poorer black ones, whose former residents account for more than half the 255,000 people who left last August and have yet to come back.

Some have been quick to see a plot to reinvent New Orleans as a smaller, richer, whiter city. It will, inevitably, be all these things — but it will remain the home of jazz and gumbo even as it becomes more like the rest of America. That change is not tragic or sinister. It is an object lesson in the power of a highly mobile and resilient society to adapt and thrive.