Coyote Blog

After this post on incentives, where I observed that perhaps 99% of all government policy failed on incentives issues, I thought about going a whole week and discussing every story in the context of failed or mismatched incentives.  Then I thought about all the time I had spent building up my readership only to chase everyone away in just one week, so I will defer that idea.

BUT, can anyone tell me what incentives these people have to go work and support themselves?

What are people who receive FEMA assistance doing to help
themselves? That's the question NBC 15's Andrea Ramey asked those who
have been staying for free in hotel rooms after they moved out of FEMA
supplied travel trailers. What she found out is there are some who are
doing very little.

The scorching heat puts many at the Quality Inn poolside, but for
Gwenester Malone, she chooses to beat the heat by setting her
thermostat to sixty degrees. Malone's room for the past three months,
along with three meals daily, have all been paid for by taxpayers.

"Do you work?" asked NBC 15's Andrea Ramey.

"No. I'm not working right now," said Malone.

Malone says she can't drive and it's too hot outside to find work
within walking distance. "Since the storm, I haven't had any energy or
pep to go get a job, but when push comes to shove, I will," said Malone.

Just a few blocks away, Kelley Christian also stays at a hotel for
free. She says she's not taking advantage of her situation, but admits
it's easy to do. "It's too easy. You know, once you're there, you don't
have to pay rent," said Christian. "I kept putting it off and putting
it off and now, I'm tired of putting it off."

Apparently, we taxpayers gaurantee $645 billion in flood insurance so wealthy folks can build second homes on the beech, and have them wash away every few years at taxpayer expense.  USAToday, breaking from general habit, actually criticized a government giveaway in this article.  But I think that the John Stossel article linked by Q&O is better  (Memo to ABC web guys -- your articles stay online for years so it might be nice to add a year to that date in the byline).  Stossel points out that the tab for flood insurance understates the beachfront subsidy:  Costs for FEMA, disaster relief, Corps of Engineers projects, beech erosion abatement, etc. all are also government subsidies for living in dangerous locations.

But the outrage is that federal flood insurance exists at all. There is
a quarter-million-dollar limit on each payment, and as long as I build
my house in accordance with zoning laws and ordinances, there is no
limit on how many times the government will pay if a house keeps
washing away

Yesterday I saw Live Free or Die Hard, and I must say that it was an unexpectedly enjoyable film.  Good action from earlier movies combined with an unlikely buddy movie element.  I was disappointed only with one bit towards the end that overtaxed my suspension of disbelief.

Anyway, not to spoil too much, a mysterious group has hacked into government computers to shut down most public functions - air traffic control, traffic lights, emergency response.  They've also messed with communications and stock market computers. 

In pushing their terrorist attack, the message was interesting.  I can't remember the exact words, but it was stuff like "what if you called the government and no one was there to answer.  What if you needed help and government agencies could not help you.  You are all alone"  This struck me as a thoroughly modern form of attack -- the terrorists cut the welfare state off from the government, forcing them to take responsibility for their own lives, and everyone panics in response.

I remember one line where Bruce Willis says "Surely the government has departments full of people to deal with this kind of thing" and the other character says "it took the government five days after Katrina to get water to the Superdome."  Again, the assumption is that as the tools of civilization fail, only the government could put things together again, and they were undermanned.  But after Katrina, Wal-Mart and Home Depot had extra inventory in their local stores, with a focus on plywood and generators and the like, in hours rather than days.  FEMA on the other hand spent more time after Katrina keeping individuals from helping in New Orleans of their own initiative than doing anything themselves.   Civilization was built by individuals, not the government, and if it ever comes to rebuilding it, the same will be true.

I have had experience on several occasions attempting to bring private solutions (at no cost to the city government) to certain municipal problems.  The general approach to such offers, which seems to be similar in every city I have lived in, is to get together a meeting of every single government authority that could possibly have some tangential jurisdiction over the particular problem (e.g, city, county, state, highways, parks, water, environment, etc. etc.).  In this meeting, the discussion goes around the table, with every single participant adding another reason why the proposal is a problem and/or another roadblock or required approval.  This is not an exaggeration - I can't remember one person in such a meeting try to fix a problem or make something happen.  Everyone in government has an incentive system, it seems, that revolves around avoiding risk and preventing change. 

That is why I know that this story is typical of government, not an aberration:

LSU hospital officials began planning for a temporary network of
neighborhood clinics in early November 2005, barely two months after
Hurricane Katrina knocked Charity Hospital out of commission and threw
health-care services for many of the city's uninsured into disarray.

Eight months later, in late June and early July, FEMA delivered the
trailers to New Orleans, with the $761,000 bill picked up by the
federal government.

It wasn't until last week that the New Orleans City Council agreed
to temporarily waive the city's zoning code to allow the trailers to be
located at six schools around the city -- three on the east bank and
three in Algiers -- for two years.

In between fell more than 100 meetings and dozens of e-mails about
the issue involving LSU executives and officials at the city, state and
federal levels. And the journey is not over. The zoning waivers still
need approval from Mayor Ray Nagin, which cannot occur until next week
at the earliest, as well as permits from the city that could take up to
six months to acquire.

20,000 FEMA trailers panic-purchased after Katrina, now (maybe) up for sale.  Via AP

Phoenix hit with rains and flooding.  Where's FEMA?  Where's Bush?  Where's my $2000 Visa card?  The government is intentially ignoring us because, uh, we're all rich white people with plastic surgery.  I heard that tens of refugees were all trapped in a local Hooters for hours and hours with no national gaurd to protect them. 

Below is the Indian Bend Wash mentioned in the article, which is next to my house:

LOL, the whole town was laughing at the national coverage our morning rainstorm got.  Drive time DJ's were particularly mocking Wolf Blitzers breathless commentary.  They were interviewing people who had panicked calls from out of town relatives who had seen the coverage, only to meet with confused shrugs of local residents who may not even have noticed.

The rain lasted barely longer than an hour, and the streets were dry by the time I went to get the kids from school.  We did have flash flooding in our "washes" (what we call dry river beds) but that is to be expected since desert soil does not absorb water quickly and so you get a lot of water runoff.  Also, Phoenix has few storm sewers -- it accepts the fact that things flood once every two years or so, and accepts the costs involved as cheaper than building more infrastructure, which I think is correct.  The golf course is flooded (creating a new island-green) because that's where we put golf courses here - in the dry river bottoms.  The grass grows better there and the land can't be used for anything else and its only a couple of adays a year they get flooded out.

(By the way, yeah, I know I screwed up stitching together the panorama - some of the tree trunks don't match.  I was in a bit of a hurry)

It frustrates me some when the government's Katrina response is cited as an example of government failure.  This implies that the government should perform better, but just didn't in this particular case because of some process or personnel problem.  But the government's Katrina response was not the government failing, but the government doing exactly what it always does.  Governments of all types are hard-wired to produce the mess we saw.  And it was a mess, as Ralph Reiland summarizes a recent NY Times article:

• An estimated 1,100 prison inmates across the Gulf Coast collected in excess
  of $10 million in rental assistance and disaster-relief money. Crime pays! FEMA,
  in addition, distributed millions of tax dollars to people who used names and
  Social Security numbers belonging to state and federal prisoners.
• A hotel owner in Sugar Land, Texas, has been charged with submitting
  $232,000 in invoices for evacuees who allegedly never stayed at his hotel,
  billing FEMA for purportedly empty rooms or rooms occupied by paying guests or
  hotel employees.
• An Illinois woman who was living in Illinois at the time of the storm sought
  relief benefits by claiming she had watched her two daughters drown in the flood
  waters of New Orleans. The children never existed.
• A Department of Labor employee in Louisiana, appropriately named Wayne
  Lawless, has been charged with handing out nearly 100 falsified disaster
  unemployment benefit cards in exchange for kickbacks of up to $300 per card.
  
• In New Orleans, two FEMA officials have pleaded guilty to pocketing $20,000
  in bribes in exchange for inflating the count on the number of meals a
  contractor was serving to relief workers.
• With the $2,000 debit cards distributed by FEMA for disaster relief, an
  estimated 5,000 people have double dipped, receiving both the $2,000 plastic
  card and a second $2,000 by check or electronically.
• Two men, one a representative of the Army Corps of Engineers, have pleaded
  guilty to taking kickbacks in exchange for approving payments for removal of
  nonexistent loads of hurricane debris. In contrast, with loads of debris that
  were not nonexistent, a councilman in St. Tammany Parish, Louisiana, has been
  charged with attempting to extort $100,000 from a debris-removal contractor.
  
• One creative scam artist is charged with collecting 26 federal disaster
  relief checks totaling $139,000 by using 13 Social Security numbers and fake
  claims of damage at bogus addresses. Others collected and pocketed hurricane
  relief donations by posing as Red Cross workers.
  All told, what the above
  represents is "one of the most extraordinary displays of scams, schemes and
  stupefying bureaucratic bungles in modern history," reports the Times, "costing
  taxpayers up to $2 billion."

Note that this isn't a unique failure - this story can be written about any government handout program.  And this wasn't a case of FEMA moving too fast without restraints when everyone around it was signaling caution - in fact just the opposite.  Everyone on the sidelines at the time was criticizing FEMA for being too slow in handing out money willy-nilly.

One of the problems never discussed very often is that increasingly, the government has insisted on an exclusive monopoly position for itself in providing disaster assistance.  In effect, past disaster assistance was provided by people you never see or hear about, private people taking private action.  In Katrina, the government worked hard to shut most of these people out.  So, in this sense, Katrina was probably a worse response than in other disasters because the bottom-up, thousands-of-people-helping-out response was not allowed.  FEMA, under pressure from both sides of the aisle, increasingly take the Al Haig "I'm in charge here" approach, much to everyone's detriment. 
Unfortunately, most analyses of Katrina are saying the government did not do enough.  I think it did too much.

If my blog was a satellite TV station, the following would be illegal:  Investigators Slam Katrina Response.  (hint - answer is NOT in the attached article, which is random)
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I'm sorry, did you miss it?  What did I do that was so wrong?  What I did was let you view content directly from a national content provider.  In the past, Reuters traditionally distributed its content through local distribution arms called newspapers.  This distribution model was required based on old technologies, where printing was a local not a national business.  Now that new technologies allow content providers to distribute their material nationally without these intermediaries, many have chosen to do so, as does Reuters at their web site.  This is one of the many reasons why newspapers today are struggling.

The TV business has historically had the same business model for roughly the same technological reasons.  National content providers (e.g. NBC, CBS) distributed content through local affiliates because broadcasting technologies were very local.  Today, with Satellite and cable, it is perfectly easy for anyone to access the national feeds, like you did in reading the Reuters site above.  EXCEPT, the US Congress has outlawed this practice.  Satellite providers, with a few exceptions for rural viewers, cannot provide viewers with the national feed -- it is illegal.  Unlike with print media, Congress has succumbed to powerful interest groups in the local TV market to protect their dying business model. 

As a result, DirectTV has satellites in space using up bandwidth by broadcasting 50 or more nearly identical copies of the same national feed, because it is forced to use the local affiliate's feed for each local market.   One of many adverse results is that while the price of print content has fallen to nearly zero, the price of broadcast content goes up.  And, from a personal standpoint, I nearly killed myself adjusting an old fashioned TV aerial on my roof last night because that is the only way I can get NBC's Olympics HDTV content, since my satellite provider can't afford to duplicated hundreds of local stations to get the networks on satellite in HDTV under the current asinine rules.  And I refuse to get cable because it was in large part for exactly this reason, to force customers away from satellite to cable, that the must-carry and related rules were passed, and I refuse to give them the satisfaction.

Postscript:  By the way, the Reuters article linked is worth reading too.  Take this snippet:

Richard Skinner, the inspector general of the Department of Homeland
Security, told the committee that FEMA purchased 24,967 manufactured
homes at a cost of $857.8 million to temporarily house Katrina victims.
But most of those homes are unused and the government is paying to
store them, he said.

Nearly 11,000 are sitting are sitting at a
government site in Hope, Arkansas, and are deteriorating because they
were improperly stored, he said.

I hate to be the only one in the blogosphere who does not link it, and since this is the only blog my mom reads, here is George Will's take on the Harriet Miers choice.  I am not sure there is much more to say than this.  First, he dispatches the Bush "trust me" argument:

It is not important that she be confirmed because there is no evidence that she
is among the leading lights of American jurisprudence, or that she possesses
talents commensurate with the Supreme Court's tasks. The president's "argument"
for her amounts to: Trust me. There is no reason to, for several reasons.

He has neither the inclination nor the ability to make sophisticated judgments
about competing approaches to construing the Constitution. Few presidents
acquire such abilities in the course of their pre-presidential careers, and this
president particularly is not disposed to such reflections....

In addition, the president has forfeited his right to be trusted as a
custodian of the Constitution. The forfeiture occurred March 27, 2002, when, in
a private act betokening an uneasy conscience, he signed the McCain-Feingold law
expanding government regulation of the timing, quantity and content of political
speech. The day before the 2000 Iowa caucuses he was asked -- to ensure a
considered response from him, he had been told in advance that he would be asked
-- whether McCain-Feingold's core purposes are unconstitutional. He
unhesitatingly said, "I agree." Asked if he thought presidents have a duty,
pursuant to their oath to defend the Constitution, to make an independent
judgment about the constitutionality of bills and to veto those he thinks
unconstitutional, he briskly said, "I do."

Then he takes on Miers's credentials:

Furthermore, there is no reason to believe that Miers's nomination
resulted from the president's careful consultation with people capable of such
judgments. If 100 such people had been asked to list 100 individuals who have
given evidence of the reflectiveness and excellence requisite in a justice,
Miers's name probably would not have appeared in any of the 10,000 places on
those lists....

It is important that Miers not be confirmed unless, in her 61st year,
she suddenly and unexpectedly is found to have hitherto undisclosed interests
and talents pertinent to the court's role. Otherwise the sound principle of
substantial deference to a president's choice of judicial nominees will dissolve
into a rationalization for senatorial abdication of the duty to hold presidents
to some standards of seriousness that will prevent them from reducing the
Supreme Court to a private plaything useful for fulfilling whims on behalf of
friends.

Quoting Bill Paxton:  "That's it man, game over man, game over".  I understand that politicians want to reward their supporters, but that's what ambassadorships to friendly countries are for.  Not FEMA.  And certainly not the Supreme Court.

  Is it too late to nominate Billy Carter to the high court?

Via Instapundit comes the separation of powers is slowly starting to work, with the Senate starting to reign in the Administration:

In a break with the White House, the Republican-controlled Senate
overwhelmingly approved a measure Wednesday that would set standards for the
military's treatment of detainees, a response to the Abu Ghraib scandal and
other allegations that U.S. soldiers have abused prisoners.

Sen. John McCain, R-Ariz., a victim of torture while a prisoner during the
Vietnam War, won approval of the measure that would make interrogation
techniques outlined in the Army Field Manual the standard for handling
detainees in Defense Department custody and prohibit "cruel, inhuman or
degrading" treatment of U.S.-held prisoners.

Its good to see Congress getting off its butt and seeing it stop relying on the Supreme Court to deal with these issues.  I thought this was overdue a while back when I posted this.

Of course GWB, who is the only president in history to go 5 years without vetoing anything, is threatening a veto of this sensible regulation:

The White House has threatened to veto the $440 billion military spending
bill to which the measure was attached, and Vice President Dick Cheney has
lobbied to defeat the detainee measure. White House spokesman Scott McClellan
objected that the measure would "limit the president's ability as
commander-in-chief to effectively carry out the war on terrorism."

Uh, how?  Glenn Reynolds responds:

This resistance seems to me to be a mistake. First -- as Lamar
Alexander noted on the Senate floor, in a passage I heard on NPR
earlier this morning -- it is very much the Congress's responsibility
to make decisions like this; the President might do so in the first
instance, but we've been at war for more than four years and Congress
is actually doing its job late, not jumping in to interfere. If the
White House thinks that the Senate's approach is substantively wrong,
it should say so, but presenting it as simply an interference with the
President's Commander-in-Chief powers is wrong. Congress is entitled,
and in fact obligated, to set standards of this sort. It's probably
also better politically for the White House, since once the legislation
is in place complaints about what happened before look a bit ex post facto.

Perhaps current practices are producing a treasure trove of
intelligence that this bill would stop, but I doubt that -- and if I'm
wrong, the Administration should make that case to Congress, not stand
on executive prerogatives. And this bill seems to be just what I was calling for
way back when -- a sensible look at the subject by responsible people,
freed of the screeching partisanship that has marked much of the
discussion in the punditsphere. That should be rewarded, not blown off.

A Bush veto of this measure is likely to touch off the perfect political storm within his own party.  This would make the trifecta of alienation from the more sober parts of the Republican Party, following on his profligate spending tendencies as revealed post-Katrina and his cronyism as reveled first at FEMA and now with his recent Supreme Court nomination.

Following up on posts here, here, here, here, and here is yet another in a series on government preference for control over results, this time via Overlawyered.com:

In the midst of administering chest compressions to a dying woman
several days after Hurricane Katrina struck, Dr. Mark N. Perlmutter was ordered
to stop by a federal official because he wasn't registered with the Federal
Emergency Management Agency. "I begged him to let me continue," said Perlmutter,
who left his home and practice as an orthopedic surgeon in Pennsylvania to come
to Louisiana and volunteer to care for hurricane victims. "People were dying,
and I was the only doctor on the tarmac (at the Louis Armstrong New Orleans
International Airport) where scores of nonresponsive patients lay on stretchers.
Two patients died in front of me.

"I showed him (the U.S. Coast Guard official in charge) my medical
credentials. I had tried to get through to FEMA for 12 hours the day before and
finally gave up. I asked him to let me stay until I was replaced by another
doctor, but he refused. He said he was afraid of being sued. I informed him
about the Good Samaritan laws and asked him if he was willing to let people die
so the government wouldn't be sued, but he would not back down. I had to
leave."

In a formal response to Perlmutter's story, FEMA said it does not accept the
services of volunteer physicians:

"We have a cadre of physicians of our own," FEMA spokesman Kim Pease
said Thursday. "They are the National Disaster Medical Team. ... The voluntary
doctor was not a credentialed FEMA physician and, thus, was subject to law
enforcement rules in a disaster area."

So for those of you who draw the conclusion from Katrina that we need more big government rather than less, that would help.... how?

Technorati Tags:  Katrina

Those of you who wanted a strong federal welfare-nanny-state response to New Orleans, you have got your wish:

It is impossible to over-emphasize the extent to which this area is
under government occupation, and portions of it under
government-enforced lockdown. Police cars rule the streets. They (along
with Humvees, ambulances, fire apparatus, FEMA trucks and all
official-looking SUVs) are generally not stopped at checkpoints and
roadblocks. All other vehicles are subject to long lines and snap
judgments and must PROVE they have vital business inside the vast
roped-off regions here. If we did not have the services of an off-duty
law enforcement officer, we could not do our jobs in the course of a
work day and get back in time to put together the broadcast and get on
the air.

This is not poor federal management - this is exactly-what-you-always-get federal management.  Putting a premium on control and process over results is built into their DNA.  My prediction is that those areas outside federal control and allowed to be accessible to private aid and to individuals who want to, yeah I know its crazy, come into the area and take responsibility for fixing their own house rather than waiting for the feds to do it for them will fair much better in the long run.  More on the federal urge for technocratic control here  and here and here and here.

Something about this reminds me of an observation made over and over in interviews with American soldiers from WWII.  They recounted that in German villages, after a battle, the German citizens were out in the streets, starting to clean up and rebuild before the dust had even settled, while in France, villagers would just sit forlornly in the debris and wait for someone to come do something about it.

Update:  I know you are getting tired of these stories, but here is yet another example of the FEMA folks opposing private relief efforts in the name of "control". 

Starting right after midnight I began receiving calls from FEMA, HHS,
TRANSCOM and other groups whose acronyms I still cannot explain.  LCDR
Kennedy from FEMA called to understand what I was trying to do.  I told
him.  Fifteen minutes later Mimi Riley, Deputy Director from NDMS
called to beg me in a plaintive and exhausted voice not to carry out
this mission.  She had many reasons "“ you need doctors on the plane,
Chicago is too far from their home, how will we track the patients,
this is a military operation and we were not military. 

I
explained to her that we had two doctors on the plane one of whom was a
retired Air Force Doctor who had run the military hospital in Baghdad
after the invasion.  I thought we could trust him to run an airplane of
people from New Orleans to Knoxville.  We were working with NDMS
hospitals in Tennessee and Chicago so they would have a good tracking
system.  (I guess Mimi never heard of the Great Migration of African
Americans from New Orleans and the south to Chicago after the flood of
1927 and during the Depression.  Many people from New Orleans are more
at home in Chicago than Houston. )

Mimi was unmovable.  We
were not military and that was that.  She tried to sound grateful for
our intentions but she was not going to have outsiders help.  I even
offered to GIVE her the planes and the crews and the hospitals and let
her run it through her NDMS system but she would have none of it.  She
asked me at least to delay until noon the next day and I said I would
try.

A good revamp of FEMA after this is all over would put a heavy emphasis on private action and FEMA's role in aiding rather than controlling and limiting this effort.  Unfortunately, I don't expect that to be the outcome.  I fear that large government technocrats and lefties who are always suspicious of private bottom-up action will control the agenda in framing the FEMA debate.

OOPS:  Did I say that technocrats and lefties distrusted anything but top-down federal power.  I forgot the righties as well (from dubya's speech the other day):

It is now clear that a challenge on this scale requires greater federal
authority and a broader role for the armed forces -- the institution of
our government most capable of massive logistical operations on a
moment's notice.

Sounds like Lyndon Johnson and the Great Society.  As a libertarian, I dread the next election.  Two parties competing to see who can enhance federal power more.  Blech.

Yet another:

The patients and staff at Methodist could have been evacuated before
Hurricane Katrina hit. But instead they were condemned to several days of fear
and agony by bad decision-making in Louisiana and the chaotic ineptitude of the
Federal Emergency Management Agency. Some of the patients died.

Incredibly, when the out-of-state corporate owners of the hospital responded
to the flooding by sending emergency relief supplies, they were confiscated at
the airport by FEMA and sent elsewhere.

So, unsurprisingly, Paul Krugman and others are arguing that Katrina is a vindication for large-government liberals  (One would think we would love GWB, who has been a better large-government builder than Clinton, but that is another topic).  Anyway, I think it is worth thinking for a second about the federal government and hurricanes.  I will divide the post into two parts:  Preparedness and Response, and show that in fact, large central-government thinking is at the heart of many of the problems that are being faced.

Disaster Preparedness
I cannot come up with any justification for the US Government taking the lead role in local disaster preparation or protection.  The types of disasters are just too wide and varied:  Tidal waves in Hawaii, earthquakes in LA, mudslides in San Diego, fires in the west, tornados in the plains, hurricanes on the gulf coast, blizzards in the north, etc. etc.  And why would anyone want the feds taking over their local disaster plans anyway?  Do you really want to rely on the hope that a national organization has the same priority on your local risks that you do?  The resources, the knowledge, and the incentive to prepare for emergencies are all local, and such preparation should be done as locally as possible.

The only reason locals would even tolerate federal involvement in disaster preparedness is $$$.  Every local politician loves federal dollars.  And even a hardcore libertarian like myself is probably willing to admit that some of the preparedness investments truly are public goods.  Take levees for example.  I am willing to have them as public goods.  However, no one can convince me that levees whose sole purpose in life is to protect New Orleans are federal public goods.  Why do I need to pay for them?  Why don't New Orleans people bear the full cost of their choice to live below sea level?  My family chooses to live in a place that is relatively free of disasters (though if the Colorado River dries up you can come visit our bleached bones as we are consumed by the desert).  Why should I subsidize people's choice to live in a location that sits in mother nature's cross-hairs?

But beyond my cantankerous libertarian desire not to subsidize you, those of you who live in disaster areas should demand to take responsibility for your own preparedness.  The feds are never going to value your safety the same way you do (as evidenced in part by the 40-year ongoing fight for levee funding in New Orleans) and are never going to understand your local problems like you do.  In fact, the illusion of federal responsibility for disaster preparedness is awful.  It gives irresponsible local authorities an excuse to do nothing and a way to cover their ass.  It creates a classic moral hazard and sense of false security.

I have resisted saying this for a week or so out of respect for the plight of individuals still struggling in Louisiana and Mississippi:  If one divides the world into the ants and the grasshoppers (per the classic fable), New Orleans and Louisiana would make the consensus all-grasshopper team.  They have lived in a stew of bad and corrupt government for years, mixed with a healthy dose of Huey Long-style patronage that created expectations that "you would be taken care of".  Their state officials have for years not only been grasshoppers, but have demanded that they be supported by the ants, and seem lost and confused that the ants didn't protect them somehow from Katrina.

Disaster Response
Its probably good to have a national body that can help focus resources from around the nation onto local regions that have been devastated by some disaster.  But here is the key point.  The federal government itself is never, ever going to have the resources stockpiled somewhere to handle a disaster of this magnitude.  They can't have the doctors on staff, the firemen waiting around, the medical supplies in a big warehouse, a field full of porta-potties ready to deploy, etc. etc.  There is just too much needed, and the exact needs are too uncertain.

What they can do, though, is understand that in an emergency, Americans from all over the country are always willing to help, to volunteer their time or skills or money to aid the victims.  More than anything, the Fed's role needs to be to remove barriers from these resources gettting to the the right places as fast as possible, and to backstop these private efforts with federal resources like the military.  Take the example of refugees.  There are over a million from this hurricane.  Of those, at least 90% will be helped privately, either from their own funds or friends or family or private generosity.  Probably more like 95+%, if you include resources offered by local governments.  The feds role then is to help the remaining 5% find food and shelter.  Note, though, that the problem is not dealing with 100% of the problem, it is dealing with the 5% the leaks through bottom-up efforts, while removing barriers that might stand in the way of bottom-up efforts helping the other 95%.

Unfortunately, the feds don't think this way.  Most feds, including Krugman type large government folks, distrust private and bottom up efforts.  They are top-down technocrats, putting an emphasis on process and control rather than bottom-up initiative.  I wrote much much more about the failed technocratic response to Katrina here.  I think one can argue the reason that the refugee situation for 95% of the people worked well is that these folks quickly got out of the sphere of influence of the FEMA folks -- in other words, they got far enough away to escape FEMA control.  Can you imagine what a total disaster would be occurring if FEMA tried to control the relocation of all 1 million people?  But on the LA and MS gulf coast, FEMA is exercising total control, actually preventing private initiative from helping people, and everyone is the worse for it.  I encourage you to read more in this post about valuing control over results, but I will leave you with this one anecdote that sums up the big government technocratic top-down world Mr. Krugman longs for:

As federal officials tried to get some control over the deteriorating
situation in New Orleans, chaos was being replaced with bureaucratic rules that
inhibited private relief organizations' efforts.

"We've tried desperately to rescue 250 people trapped in a Salvation Army
facility. They've been trapped in there since the flood came in. Many are on
dialysis machines," said Maj. George Hood, national communications secretary for
the relief organization.

"Yesterday we rented big fan boats to pull them out and the National Guard
would not let us enter the city," he said. The reason: a new plan to evacuate
the embattled city grid by grid - and the Salvation Army's facility didn't fall
in the right grid that day, Hood said in a telephone interview from Jackson,
Miss.

"No, it doesn't make sense," he said.

Technorati Tags:  Katrina, Economics

Marginal Revolution has an incredible roundup of FEMA and disaster-preparedness articles, many from a libertarian point of view.