Superstorm Sandy isn’t even done doing its damage, and the knee-jerk punditry is already in full force. Many folks on the left, such as The New York Times editorial board, simply cannot imagine how anything but command-and-control national government can deal with big problems. Nor can they imagine any other way of measuring government performance than by measuring inputs. If more money is being spent, then by definition government must doing more, doing better. Less money equals fewer services and less value.
Thus we get editorials like this one from The Grey Lady: “A Big Storm Requires Big Government.” Now I am not going to pretend to know exactly how the Federal Emergency Management Agency should be structured and funded, or how responsibilities should be divided between state and national government. But I not going to automatically assume that more funding and more top-down control is the best path,a as the newspaper does. This bit of the NYT editorial really irks me:
Mr. Romney not only believes that states acting independently can handle the response to a vast East Coast storm better than Washington, but that profit-making companies can do an even better job. He said it was “immoral” for the federal government to do all these things if it means increasing the debt.
Let’s recall how one “profit-making” company did during Hurricane Katrina. From the study “Wal-Mart to the Rescue: Private Enterprise’s Response to Hurricane Katrina”:
Wal-Mart arrived in the New Orleans area long before FEMA and had the supplies that the community needed. Both President Aaron Broussard and Sheriff Harry Lee of Jefferson Parish in suburban New Orleans lauded Wal-Mart’s work. In an appearance on Meet the Press, Broussard noted the speed with which Wal-Mart had brought trucks of water to his area and then quoted Lee as saying, “if [the] American government would have responded like Wal-Mart has responded, we wouldn’t be in this crisis.”
Phillip Capitano, mayor of the New Orleans suburb of Kenner, reported that, “the only lifeline in Kenner was the Wal-Mart stores. We didn’t have looting on a mass scale because Wal-Mart showed up with food and water so our people could survive.” Other community leaders in the New Orleans area and cities along the rest of the Gulf Coast also praised Wal-Mart’s quick and effective response to the storm (Leonard 2005). Wal-Mart was not alone in providing much needed resources to the stricken areas, as other big box retailers such as Home Depot and Lowe’s also responded in similar ways. However, Wal-Mart’s response was the largest and, based on local reports, the most effective. In the three weeks following landfall, Wal-Mart shipped almost 2,500 truckloads of merchandise to the affected areas and had drivers and trucks in place to ship relief supplies to community members and organizations wishing to help. …
In addition to what they sold as a result of quickly re-opening their stores, Wal-Mart also provided a large amount of free merchandise, including prescription drugs, to those in the worst-hit areas of the Gulf Coast. For example, several truckloads of free items went to New Orleans evacuees staying at the Astrodome and the Brown Convention Center in Houston. Most importantly, Wal-Mart was able to get this assistance to the disaster areas almost immediately after the storm had passed, in comparison to the days—in some cases weeks—that residents waited for government agencies to provide relief.
And here is the author’s conclusion:
The tale of Hurricane Katrina as a massive failure of government at multiple levels is a widely accepted one, even among people normally not inclined to point the finger of blame at government. However, the lesson that many draw is that it was a failure of will, resources and/or expertise by government that created the catastrophe that was Katrina. What is much less often argued is that these failures were endemic to the institutional environment of the political process, which is unable to provide the knowledge and incentives necessary for effective resource allocation in the way that the private sector can.
When placed next to FEMA’s failures, the largely untold but very clear story of Wal-Mart’s success illustrates the advantages the private sector has in managing the logistical challenge of resource allocation during a natural disaster. The incentive provided by private ownership and the knowledge provided by market signals such as prices and profits, all set in an environment of competition, create firms like Wal-Mart that are able to respond with agility and improvisation to a crisis like Katrina, and to do so with results far superior to almost all government agencies.
A political economy perspective on Wal-Mart’s heroic performance strongly challenges the belief that with more will, resources, or expertise, government could ever respond effectively to a major disaster. The flip side of government’s massive failures during Katrina is the notable successes of the private sector. Disaster policy makers who ignore the other half of the story do so not only at their own peril, but also at the peril of millions of Americans who could be the next victims of another disastrous government disaster relief effort.
The New York Times — and the pundits trotting out this editorial to damage the Romney campaign — are doing just what the study warned against, ignoring the other half of the story. They don’t even consider how markets or decentralization can improve performance. It is the same story with Medicare. They have a model — as old fashioned and obsolete as it is — and they’re sticking with it. Forward?