Notes on Helping After Hurricanes

The Mackinac Center for Public Policy recently posted, and I shared, this Frederic Bastiat quote on Facebook. Lincoln-Douglas debaters researching the values of freedom and equity in the realm of economics may have heard the argument that government must be the agency or actor providing equity for people who need help, especially after disasters. Equity here is treating people fairly and the argument made is that government can best provide large scale aid.

Response to Hurricane Katrina has been offered in debate circles as an argument for government response. The claim: private firms and NGOs could not have provided enough help after the flooding and power outages across Louisiana and Mississippi. State and federal agencies may have responded poorly in many cases, but how could enough food, water, shelter, and medical support have been provided without state support?

These questions call for historical, ethical, and empirical research. What if government efforts to monopolize disaster response turned out to actually block more effective community, company, and NGO responses?

Frederic Bastiat’s quote explains that critics of government, in this case disaster assistance, are not against helping people after hurricanes and floods. Advocates of federal disaster agencies, Bastiat would argue, confuse state and society in thinking that key social services need tax-funded federal agencies to save the day.

Does saying people have an obligation to help others in need justify establishing state agencies to try to provide that support? That’s an ethical question about when the use of force (tax collection) is justified. Before turning to that, let’s look at the reality of private and NGO response to disasters both now and through U.S. history.

People who favor private charity over government might still support federal disaster aid because of the suddenness of disasters where a few days delay providing food and water could put thousands of lives in danger. Could private and NGO disaster relief be relied upon to provide enough help in time?

Preparing for and responding to disasters requires not only scale and expertise but also incentives and information. Many studies and articles have contrasted Walmart’s Katrina response with that of various state and federal disaster agencies (FEMA, for example). See for example economist Steve Horowitz “Wal-Mart to the Rescue,” in The Independent Review (pdf).

Walmart, like Target, Lowe’s, Home Depot, and other retailers, earn income from selling just the sorts of goods that get destroyed by hurricanes. Each firm has strong incentives to deliver needed supplies to their stores immediately after a hurricane passes (and they want to make sure their customers survive to buy another day). Firms earn good will providing free food and water after disasters, and free advertising as their services are reported nationwide.

A September 2005 ABC News article reports:

     During disasters, Wal-Mart puts its own nationwide response center in motion, with sophisticated communications and a state-of-the-art shipping network.
     The system is so efficient that after Hurricane Katrina, Wal-Mart sometimes arrived with much-needed food and supplies before the Federal Emergency Management Agency. FEMA was widely criticized for its slow response to those in need after Katrina hit.
     But Wal-Mart’s response was faster and, in one case, the company even provided stranded police officers with clothes and ammunition. Now, in areas hit by Rita, Wal-Mart has already shipped donated clothes and supplies. It has even reopened stores in places with no electricity.
     “If this place wouldn’t be open, we wouldn’t have nothing right now,” said one resident of Lake Charles, La., where Rita wiped out electricity, phone service and running water.”This has been a lifesaving place.”

FEMA and other disaster agencies have to keep on standby food, water, and shelter in case of disasters, plus maintain or contract with trucks, warehouses, and staging areas to distribute these to disaster victims. Walmart, Home Depot and other firms already have these goods plus the trucks and warehouses to deliver them. When hurricane Katrina hit, Walmart had hundreds of trucks full of needed supplies parked just outside the predicted hurricane

Steve Horowitz begins his Independent Review article:

In the several years that have passed since Hurricane Katrina struck the Gulf Coast in the late summer of 2005, it has become increasingly clear to many observers that governments at different levels were at fault for almost every stage of the sequence of events that turned the passing of a fairly strong hurricane to the east of New Orleans into a catastrophe. Government has been quite appropriately the target of a great deal of criticism both by local residents and by observers elsewhere with regard to the special interests at work in constructing the elaborate system of pumps, levees, and canals that try to make the city’s water go everywhere but where nature wants it to go; the problems with the actual canal and levee construction by the U.S. Army Corps of Engineers; the botched evacuation plans; the confusion over which levels of government should respond, and how, to the multiple and very visible failures of the Federal Emergency Management Agency (FEMA); and the ongoing inability of various levels of government to rebuild the New Orleans area. 

John Tierney in the New York Times, suggests we would be better off with WEMA than FEMA:

[Lee] Scott is the chief executive of Wal-Mart, one of the few institutions to improve its image here after Katrina sent a 15-foot wave across the north shore of Lake Pontchartrain. If you mention the Red Cross or FEMA to people in Slidell, you hear rants about help that didn’t arrive and phone lines that are always busy. If you mention state or national politicians, you hear obscenities. 

But if you visit the Wal-Mart and the Sam’s Club stores here, you hear shoppers who have been without power for weeks marveling that there are still generators in stock (and priced at $304.04). You hear about the trucks that rolled in right after the hurricane and the stuff the stores gave away: chain saws and boots for rescue workers, sheets and clothes for shelters, water and ice for the public.

”This was the only place we could find water those first days,” said Rashan Smith, who was shopping with her three children at Wal-Mart on Saturday. ”I still haven’t managed to get through to FEMA. It’s hard to say, but you get more justice at Wal-Mart.”

That’s the same assessment you hear from public officials in Louisiana, and there’s even been talk of letting Wal-Mart take over FEMA’s job. The company already has its own emergency operations center, where dozens of people began preparing for the hurricane the week before it hit by moving supplies and trucks into position.

 Not everyone is a Walmart fan, of course. At least one online article (Organic Consumers Association) is upset with the positive publicity from Walmart’s Katrina response. Thy article argues that Walmart underpays workers and gets government subsidies for warehouses, among other issues. Walmart has attracted a great many detractors, but it is worth noting that middle and low-income people benefit from access to goods and services at lower prices. Local governments offer infrastructure improvements because Walmart stores pay billions of dollars in local and state income and sales taxes, plus pay local property taxes. Many local governments compete with each other to attract Walmart stores because of the future tax revenues they will receive.

Community and non-government disaster relief
NGO’s like the Red Cross, Mercy Corp, and many others provide fast emergency response. They raise millions of dollars from donors within hours of major disasters and often have staff and associates working around the world with emergency response experience. Disaster relief organizations advertise widely on television and online after emergencies, allowing everyday people watching disaster news to personally respond, no matter where they live in the world.

Mercy Corp’s Katrina response is discussed here.

Red Cross hurricane recovery program is explained here.

The Federal Emergency Management Agency (FEMA) Katrina response is discussed in this NPR segment from 2005 (and in the earlier mentioned Steve Horowitz article).

In this LearnLiberty.org video, economist Virgil Storr discusses disaster relief and rebuilding:

 Storr seeks to understand why people returned to the devastation of Katrina and how people actually went about recovering. While conducting his research to answer these questions, he came across four recurring themes:
• The role of club goods• A sense of place• Commercial entrepreneurship• Social entrepreneurshipStorr concludes with his thoughts on the implications of his research on post-disaster public policy. Most importantly, he discusses how government policies generated a significant amount of uncertainty, slowing the pace of the recovery.

So… for debaters discussing the value of equity in the realm of economics, when the question of agency comes up, it is not at all clear that state or federal agencies ought to be relied upon as the agency for people trying to help others in need.