Government Responses to Natural Disasters

On April 27, 2006, a number of senators declared that FEMA is dysfunctional, and recommended the formation of a new government agency to replace it: FEMA has become a symbol of a bumbling bureaucracy that must be dismantled, said Sen. Susan Collins (R-Maine).

Every day, there are new reports of FEMA trailers rotting unoccupied in open fields, Katrina victims being kicked out hotel rooms, people losing aid because they bought pots and pans with FEMA money instead of spending it on rent.

Jerry Springer proclaims on Radio America that all we need is people to do their job.

What if the job we expect of FEMA is dysfunctional as well?

It seems to me that most victims and commentators whose opinions make it to the media stage expect a government response that will make disaster victims’ lives right again.

Given that the chances that every one of us will at some point will be a victim of some natural disaster is close to 100%, it seems to me that such an overarching and indefinite role for government may not be sustainable.

But, the problem with our expectations runs deeper than that: We (as victims, observers, politicians, journalists) expect FEMA to get food to those who need food, housing to those who need housing, medicine to those who need medicine, child care to those who need child are, transportation to those who need transportation, education to those who need education. How do I know this: Just follow all the stories that are critical of FEMA’s post disaster response. They are mostly about FEMA not being able to get the right things to the right people.

This is a problem the market solves billions of times every single day: People who want gas can find gas, people who want food can find food, people who want a car can find a car, people who just want to buy a trashy pop album can also find one.

How does this happen? Is there a panel of bureaucrats somewhere who constantly figure out what products people want, and make sure those products reach them at prices they are willing to pay? I am glad to report that the answer is no.

Why then, do we expect (however well intentioned they may be) bureaucrats who work in FEMA to be able to figure exactly who needs what in which location? Why does disaster aid take the form of trailers and sandwiches and hotel rooms? Assuming that, as a society, we have decided it is a good idea to help disaster victims, would it be such a bad idea to give them cash assistance? After all, they know best what they need to spend money on to recover from the disaster.

Will there be some who receive this cash, and squander it for lap dances at strip clubs? Of course, just like there are those who squander their hard earned cash on lottery tickets. But if they are not allowed to double-dip into whatever disaster recovery fund we set up, the damage they can do will be limited.

On the other hand, stupendous benefits will accrue to those who spend this money a little more wisely. First, they won’t have to deal with an inefficient bureaucracy to be able get aid. Second, individuals can allocate the disaster aid optimally given their post-disaster needs. Thus, it would take less money to make everyone happier, and thus disaster relief will impose a smaller burden on taxpayers as well.

Come on ... At least think about it a little. It surely beats watching those trailers rot.