Who You Gonna Call?

by Don Boudreaux on December 26, 2005

in Current Affairs

Which places on the Katrina-ravaged gulf coast do you suppose are being cleaned up faster and at lowest cost: those locales that rely principally on the private sector to supply clean-up services, or those locales that rely upon Uncle Sam?

Today’s New York Times gives the answer.

(Hat tip to fellow Louisiana native Fred Dent.)

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{ 8 comments }

Sudha Shenoy December 27, 2005 at 9:43 am

What a surprise!! — That the NYT actually reported accurately!!

spencer December 27, 2005 at 10:21 am

The point is still that it is the public sector — local government — that is paying for the clean up. It is just that they are using different subcontractors.

Don Boudreaux December 27, 2005 at 10:28 am

Yes, much of the clean-up is paid for by local government. But it remains true that private contractors respond better to people's needs than do public agencies such as the Army Corps.

So imagine how much better things would be if government were never involved!

Not incidentally, not all of the clean-up is paid for by government. My own family's and friends' experiences in Katrinaland reveal a great deal of purely private clean-up efforts.

JohnDewey December 27, 2005 at 10:40 am

My relatives from my hometown, Lake Charles, report that FEMA did fund many blue tarps for roofs – though most damaged roofs weren't covered for the first two weeks. By contrast, a large energy company provided generators to hundreds of area employees the second day after Rita passed. Had there been no FEMA, I suspect we'd have seen many more employers taking care of their own, and doing it much more efficiently.

Don Boudreaux December 27, 2005 at 10:48 am

What's the theory for why monies forcibly extracted from people — extracted by those who attain office based upon their ability to campaign politically — are generally more likely to be spent more wisely than are monies spent by (1) people who earned these monies, and (2) people who run charitable organizations which get their budgets privately and voluntarily, without the use of force?

Randy December 27, 2005 at 11:02 am

Don,

Politicians and their cohorts aren't at all interested in spending money wisely. Its not about what's better – its about what's better for them. And what could be better for them than spending other people's money?

Mark December 27, 2005 at 11:23 am

"And what could be better for them than spending other people's money?"

Spending it on swing voters.

I suspect FEMA would have a smaller budget, if it would exist at all, if it were not for the fact that Florida, a major swing state, gets so much money from them.

JohnDewey December 27, 2005 at 11:34 am

I was aware that BP was taking care of its employees. The Lake Charles American Press provided more examples:

"• In Lake Charles, Citgo Petroleum Corp. lined up contractors for employees needing emergency repairs to rooftops damaged by Rita. Employees covered their own repair costs, but the assistant helped them get repairs quicker."

"• In Belle Chasse, Conoco-Phillips Co. is still providing housing on a commercial steamship on the Mississippi River for 400 employees and contractors working at its refinery hit by Katrina. Employees also received a $5,000 living expense stipend and were eligible for two-year, $10,000 interest-free loans."

"• In Pascagoula, Miss., Chevron Corp. rushed to construct a base near its refinery after Katrina struck. It featured tents with wooden floors where 1,200 employees and contractors slept. Chevron also provided $500,000 to 40 local day-care centers on whom workers depend to watch their children."

What motivated this corporate generosity? Obviously they needed to get their operations back up and running. The profit motive worked again.

FEMA, on the other hand, is sitting on hundreds if not thousands of mobile homes stored at government sites. I've read that these are not being released because FEMA has held up approval of potential housing locations.

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