Friday, December 5, 2008

Wal-Mart vs. FEMA

I read this not-very-interesting research paper today that compared Wal-Mart's response and FEMA's response to Hurricane Katrina.  The reason why this paper isn't particularly interesting is because, as we all know by now, FEMA's response was just awful.  In fact awful is probably an understatement.  It might even a little generous.  Actually, if all Wal-Mart did was ship half a carton of Ramen noodles to New Orleans, they would still have beaten FEMA's response by a mile (FEMA's head, Michael Brown, apparently didn't realize that many of us would consider waterboarding of displaced 9th Ward residents an "ineffective response").
All kidding aside, you can read the report if you want but I'm sure you won't find it enlightening. What you may find dis-enlightening, however, is the report's conclusion... that the government is incapable of responding to disasters and therefore FEMA should be replaced by Wal-Mart. Ummm... what?  
I've written about this type of cynical assumption before - that conservatives in power purposefully wreck the government then turn around and point at the wreckage as proof the government doesn't work. Horwitz's paper does exactly that.  It celebrates the Wal-Mart response as proof the private sector should be allowed to run everything and that the government should step aside.  
It's typical that Dr. Horwitz, a conservative professor who has previously blamed the entire financial crisis on Fannie/Freddie and the Community Reinvestment Act (both of which are debunked Republican talking points), would leave no room in his conclusion for managing FEMA properly. He doesn't care that governments in other countries work just fine or that the government's response to 9/11 worked well. As a free market champion Dr. Horwitz's response to any governmental failure is proof the government doesn't work rather than proof this government doesn't work.  So his concluding proposal is for future administrations to seriously consider more outsourcing to private companies rather than for future administrations to fix the wreckage Bush created.  
Strangely, what's missing from Horwitz's report is the examination of the millions the Bush administration doled out to private companies like Bechtel, Halliburton and Gulf Stream Coach, all tasked with rebuilding New Orleans. Where, I wonder, is the report on the private sector's efficiency regarding the rebuilding effort?  Well, perhaps Horwitz is happy to see free market efficiency at it's finest -- after all, what's more profitable or efficient than for Bechtel to take piles of money without actually y'know doing anything with it? That's the absolute pinnacle of profitability. That's a free lunch. Money for nothing. Arbitrage. All hail the efficiency of the private sector... the meantime, please just look the other way on accountability, since none of these private companies will be held accountable for not actually doing anything with taxpayer money. 


Steven Horwitz said...

Well thanks for putting words in my mouth. As a matter of fact, I agree completely with your criticisms of the corporatism displayed by the Bush administration in its attempts to "rebuild" New Orleans. You'd know that if you'd actually read my piece on the current crisis and seen my opposition to the bailouts there (not to mention my essay at Cato Unbound complaining about corporatism).

Second, that you think my study argues for turning everything over to Wal-Mart further shows that you don't read very carefully. Read it again and check the recommendations at the end, all of which indeed suggest a larger role for the private sector, but within the larger context of reforming the political processes that will inevitably guide disaster relief. I even recommend a reform for FEMA, namely getting it out of DHS.

Finally, I'm a libertarian not a conservative, which you'd also know if you read things more carefully, rather than seeing what you want to see to make your own left-wing talking points.

Storm Bunny said...

Sorry it took me so long! Excellent entry, I may say, and it's not just "groupie talk". ^_^ You've touched very sensitive points here, which apply not only to the Bush administration or the "crisis" matter, but which you can see around the world. In Costa Rica several politicians have worked hard to put the wrong kind of people in very strategical sectors controlled (back then) by the Government, such as education, health, infrastructure development, telecommunications, insurance and even brought laws and resolutions that crippled them, only to then point at these institutions and say: "Aha! They are being inefficient! Let's replace it with the private sector!"

The selling of state owned banks and isntitutions that not only work fine but are very profitable because "you can get more money from selling the profitable than selling the broken one", it just can't stop make you thinking which is the business they are really after.

I'm missing your entries!