As the waters finally begin to recede in devastated New Orleans, complaints about the federal response to Hurricane Katrina and its horrific aftermath continue to rise.
You’d think that “disaster relief” actually were one of the federal powers enumerated in the U.S. Constitution.
A government investigation into the slow federal response has been promised. It almost certainly won’t arrive at the real reason for the federal failure, which is that the federal government is inherently unsuited to providing natural disaster relief.
Monopoly is the enemy of efficiency, whether under capitalism or socialism. … Even in a mixed economy, … the government’s activities are typically monopolies, while those in the private marketplace are typically … carried out by rival enterprises.
Thus, when a hurricane, flood, or other natural disaster strikes some part of the United States, emergency aid usually comes both from the Federal Emergency Management Agency (FEMA) and from private insurance companies whose customers’ homes and property have been damaged or destroyed. FEMA has been notoriously slower and less efficient than the private insurance companies. Allstate Insurance cannot afford to be slower in getting money into the hands of its policy-holders than State Farm Insurance is in getting money to the people who hold its policies. Not only would existing customers in the disaster area be likely to switch insurance companies if one dragged its feet … while their neighbors received substantial advances … from a different insurance company, [but also] word of any such difference would spread …, causing millions of people … to switch billions of dollars worth of … business from the less efficient company to the more efficient one. A government agency … faces no such pressure. No matter how much FEMA may be criticized or ridiculed for its failure to get aid to disaster victims in a timely fashion, there is no rival government agency that these people can turn to for the same service.
So, instead, people turn to the government to investigate itself. But the combination of the government’s messiah complex and the culture of dependency virtually guarantee that the investigation won’t conclude that the federal government just isn’t suited to doing everything that people want it to do for them. And that’s a shame. Because it means that more people will suffer.