Final answer:
Hurricane Katrina revealed downsides of federalism such as delayed disaster response, confusion over leadership roles, and exposed economic and racial disparities due to lack of effective coordination between government levels.
Step-by-step explanation:
The possible downsides to federalism that were highlighted by the Hurricane Katrina disaster include issues related to disaster response and intergovernmental coordination. The challenge was that state and local governments were overwhelmed and there was confusion over who should lead the rescue efforts. This confusion delayed the federal response, as seen in FEMA's ineffectiveness and the strained interactions between federal officials and local authorities. Additionally, the disaster exposed economic and racial disparities, showcasing how vulnerable populations can be disproportionately affected in times of crisis.