Friday, September 23, 2005

Everything Old Is New Again

With the approach of Hurricane Rita toward the Texas Gulf Coast, it should come as no surprise that we are still talking about Hurricane Katrina and its vast effects along the Alabama, Mississippi, and Louisiana coasts -- and especially what Katrina did to the city of New Orleans.

More precisely, Topic A is the government's response to Katrina, and whether the Bush administration did all at could in terms of relief and recovery. Others might ask whether the Bush administration, especially the Federal Emergency Management Agency, was simply incompetent or actually malevolent.

In that context, I found a piece called "FEMA: Everything Old Is New Again," in the September 20 issue of "What We Now Know" (WWNK), a weekly trend letter from Casey Research. I recommend this article -- and not just because it quotes some of my long-ago congressional testimony -- and reprint it here with permission of Casey Research.

FEMA: Everything Old Is New Again

Consider the following:

“FEMA has been accused of being a ‘political dumping ground filled by the Bush administration with inexperienced appointees who [have] mismanaged the agency, misled Congress, and funneled contracts to their friends,’ to quote the Washington Post.

“... the question of what to do about FEMA will remain. Recent major disasters caused by [hurricanes] have raised much criticism of the performance of the Federal Emergency Management Agency. In a Post interview, Stickney admitted that FEMA’s performance ‘fell below public expectations’ but he argued that the agency acted as swiftly as it could given its limited powers. This ‘limited powers’ argument stems from the wording of the Disaster Relief Act in which the Federal Government steps in only after a State Governor declares that the effects of the disaster are beyond the capacity of the State to cope and requests Federal assistance....

“What will [the President] do about FEMA? Don’t expect anything to happen in a hurry.... A likely move is to appoint a caretaker and establish a committee to study the problem for a year.”

What did you just read? Were these excerpts from an editorial in the New York Times? A scathing fundraising letter from the Democratic National Committee? A Government Accountability Office report?

Actually, those comments come from an article written by former emergency management official Jerry Strope and published in a 1993 issue of the Journal of Civil Defense. The “hurricanes” mentioned were Andrew and Iniki, and “Stickney” was Wallace Stickney, the outgoing FEMA director at the end of the first Bush administration. The "President" was the about-to-be-inaugurated Bill Clinton.

As the song goes, "everything old is new again."

Criticism of the federal disaster response agency is anything but new. A December 1989 article, also in the Journal of Civil Defense, noted that, after Hurricane Hugo hit the Atlantic coast, “One irate editorial castigated FEMA for not sending out promptly federal teams to help restore power to communities in South Carolina. FEMA has no such teams and the electric power companies have a well-organized mutual aid capability. Senator [Ernest] Hollings called the agency ‘a bunch of bureaucratic jackasses.’”

That last comment contains a hint that deserves further attention, the important yet underrated role of the private sector in disaster mitigation—in this case, how private electrical utilities have extensive disaster response plans that cross state lines and permit cooperation even among companies that normally might be seen as competitors. But that’s not the sole example.

In recent days, we have seen the same sort of response from the private sector, not just non-profits like the Red Cross, the Salvation Army, and Catholic Charities, but even profit-making companies like Wal-Mart. (The White House has compiled a list of private contributions totaling more than $516 million.) Their examples demonstrate, by contrast, that the private sector is more flexible, more responsive, and less hidebound than government bureaucracy.

Public-choice economics teaches us that government bureaucrats have nothing to lose by standing still and everything to lose by taking risks (that is, making choices). New Orleans Times-Picayune editor Jim Amoss put it succinctly in a radio interview: Preparing effectively for disasters, he said, “requires a nimble bureaucracy, and I have yet to encounter a nimble bureaucracy.” In contrast, private businesses—and non-profit organizations—can turn on a dime, if necessary.

Interviewed on National Public Radio, the mayor of Kenner, Louisiana, said:

“FEMA couldn't get here. Red Cross couldn't get here. Homeland Security couldn't get here. The only one who could get here was the Wal-Mart Corporation. We were—we are—extremely appreciative and extremely grateful for them, and we'd certainly suggest that maybe some of those other folks go over and meet with the Wal-Mart people so that they can learn distribution and logistics.”

Wal-Mart had trucked in hundreds of trailers filled with water and ice (some of which, upon entering New Orleans, were reportedly turned back by FEMA personnel). The company’s emergency response coordinator, Jason Jackson, told NPR that his crew had been prepared more than three months ago in anticipation of hurricane season:

"We had already, for instance, staged over 160 trailer loads of water in a number of different distribution centers throughout Florida, Georgia, South Carolina, and Texas because we knew that they would be needed.”

And despite getting the most publicity, Wal-Mart has only contributed $3 million in cash and goods so far—but that doesn't include the company's decades-long investment in logistics and inventory control that made its prompt response possible.

If FEMA never learns from its experience, perhaps it is time to move in a different direction—one relying more heavily on the private sector and expecting less from the federal government.

Let’s remember that planning for disaster response is primarily a local activity. There is not much need for a central role to be played by the federal government, even in terms of funding. It makes much more sense for local authorities in Miami to make contingency plans for hurricanes, or for authorities in the Missouri River basin to prepare for spring floods, or for Buffalo to get ready for blizzards. Contributions to these efforts by bureaucrats in far-away Washington are limited.

It is but a short step from here to suggest that disaster planning—particularly in regard to locally contained natural or manmade disasters—can be performed mostly by the private sector. In many ways, this is already done. Architects and engineers who build homes and office towers in earthquake zones already take into account ways to quake-proof their structures. Mormon families, in keeping with their religious tradition, stockpile at least a year's worth of provisions—in part a reaction to their community’s collective memory of the hardships in the early years of frontier life. And despite their eccentric reputations, “survivalist” groups offer inexpensive, practical suggestions for preparing households for temporary or long-term crises.

Given the manifest, systemic weaknesses of the federal government in this arena, market forces must more fully come into play. First, individuals, families, and businesses will have to judge the probability of potential disasters that might affect them. Second, they will weigh the costs of preparing for disasters against the opportunity costs of not preparing.

Those who believe that planning and preparations are a worthwhile investment will seek out or establish institutions that can aid them in that endeavor, either profit-making businesses (such as firms that make easy-to-store provisions) or non-profit entities (like the Red Cross or the American Civil Defense Association). Insurance companies should offer special disaster policies to those with good plans; underwrite voluntary, community-based efforts to prevent disaster; and explore efficient yet humane ways to deal with disasters after they occur.

In congressional testimony over two decades ago, Richard Sincere of the American Civil Defense Association said: "With its extraordinary natural and economic resources, the United States does not need dictatorial control to protect its people. The interstate highway system, the number of automotive vehicles, wide areas of open, rural land, a strong economy—all these could contribute to effective civil defense. The natural freedom and mobility of the American people, their democratic spirit, their respect for law and order, their many skills and talents—these are assets without equal in the modern world."

All this remains true today. Despite the anomalous behavior of some people in New Orleans after Katrina, expectations that Americans respond well in the face of disaster have not diminished. Human and economic resources may still be applied in times of crisis without the heavy hand of government controlling them.

This article originally appeared in the weekly e-letter, What We Now Know (WWNK) -- published by, and used here with permission from, Casey Research, LLC. Click here to sign up for a FREE subscription to WWNK, or check out past editions in the WWNK archives at

No comments: