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September 12, 2005

Privatizing FEMA

Of all the attempts by conservatives to regain some post-Katrina balance, the most pernicious has to be the growing effort to use FEMA's failure to delegitimize the government's role in disaster-relief. Man, that's chutzpah. The car broke because Bush slashed its tires and now his allies are trying to convince us that the real problem lies with the whole "car" concept.

You should all use planes.

Planes fueled by tax cuts and personal responsibility.

It's a larger-scale, and significantly more cynical, deployment of the classic starve-the-beast strategy. If government has no tax revenues, it'll do a bad job. If it does a bad job, people won't like it. If people don't like government, they'll vote Republican. Replace "no tax revenues" with "incompetent leaders appointed through political patronage" and you've got this slimy little bastard.

Follow the ooze and you'll find the argument in its natural habitat -- Tony Snow's head. Snow, of course, has built a career dressing viciously dishonest statements in a fine Italian suit of exasperated sanity. Here he lauds the private sector's remarkable mobilization against Katrina and blasts FEMA's fatally flawed response, ending in a call for the complete privatization of disaster relief. In better times, this can all be dismissed, but add in the fact that some corporations really were impressive -- how often, after all, do I praise Wal-Mart? -- and the point begins to carry a certain amount of force.

You know, until you think about it a bit. Back to that Wal-Mart example, here's H. Lee Scott:

"We can't do any more than our own part. We are not the federal government. There is a portion we can do, and we can do it darn well."

So he's got a sense of a private company's limits, why don't we? Well, mostly because we figure we can just outsource the whole of disaster relief efforts. If FEMA's become sclerotic and unwieldy, give it to Halliburton. Hire a private company that doesn't do this for charitable reasons but profit. Profit means efficiency, especially when it comes to government contracts.

Of course, the evidence doesn't quite support the policy. The success of Wal-Mart, Home Depot, and others had everything to do with their preexisting retail structures and almost nothing to do with the mere fact that they have bottom lines. Having already implemented highly routinized methods for delivering goods to these areas, replacing DVD players with aid packages was a relatively minor matter. But we're not talking about deputizing a big box retailer to handle disaster relief in this country. We're talking about the creation of a private FEMA, a coordinating agency that draws up plans, directs emergency response, provides aid, and does so only when disasters hit, not through a series of preexisting, otherwise active distribution networks. Instead, their mandate is to coordinate offers of aid from Big Box Retailers, NGO's, charities, and the public sector.

So shaving off that bit of Wal-Mart-will-save-us-all fiction, what we're left with is the argument that private FEMA would be better than public FEMA. Fair enough, particularly considering public-FEMA's performance. But FEMA hasn't followed some preset evolutionary pathway to incompetence, it's been destroyed by a series of bad decisions by identifiable leaders. And that's not some Mercury-in-retrograde happenstance, we know who did it, we know why they did it, and we know how they did it. If this were a game of Clue, the winning formula would be Mr. Bush in the Oval Office with the campaign contributor. And we want to let this guy completely overhaul the way we run disaster response in this country? Brilliant! Next up, Michael Jackson is deputized to make your child's daycare more like Neverland!

What, you're not against ferris wheels, are you?

This is a pretty constant conservative fallacy when it comes to privatization. The market may encourage efficiency, but only if it works like a market. When politicians run the bidding, that's never assured. If you let corrupt pols privatize, the privatization will be corrupt. And if they have a tendency to install campaign cronies in positions of power, there's no reason to expect they won't award contracts in exactly the same manner. So forgive me if I don't quite see the efficiency gain in trading an incompetent individual who helped on the campaign for an unqualified corporation that donated to the campaign. Halliburton's "misplaced" how many billions in Iraq now?

Moreover, nothing, nothing is inherently inefficient about the public sector. Some corporations turn out to be corrupt, like Enron, or inefficient, like any number of bankrupted, bloated brands, and some government agencies do the same. But some don't. Here's Bush talking about one of them:

You know, as governor, one of the things you have to deal with is catastrophe. I can remember the fires that swept Parker County, Texas. I remember the floods that swept our state. I remember going down to Del Rio, Texas. I have to pay the administration a compliment. James Lee Witt of FEMA has done a really good job of working with governors during times of crisis.

FEMA did not set a self-directed course towards disaster. A career professional who made it a model agency was replaced with a political crony who rendered it a useless mess. Now conservatives are crying out that Katrina has proved the public sector inefficient, and we should give the same leader who weakened FEMA the opportunity to award private contracts for future disaster-relief. We should trade political patronage for crony capitalism.

Bush's decisions transformed a remarkably efficient government agency into a fatally incompetent one, so conservatives want to let him do it a second time. It's completely insane. This isn't a private vs. public debate -- contrast Clinton's FEMA with Bush's version to see that. But the right would much prefer that it was. Democrats should make sure voters understand that Bush took a superb organization and destroyed it by handing control to a politically-connected incompetent. Republicans who demand we let him do it a second time in a less reversible manner should be laughed out of the room.

September 12, 2005 in Republicans | Permalink


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Tracked on Sep 12, 2005 2:18:39 AM


What is there about the private sector business that makes it efficient? If there is healthy COMPETITION (A TRUE MARKET) and if needed, reasonable government regulation.

Some things we don't allow businesses to do because there is no natural market and competition becomes destructive: the fire department, the army and navy, etc. There are what the economists call 'natural monopolies' - one of which characterizes a nation-state: a monopoly of power.

When you want is system-wide coordination, planning, communication, and control, then the private sector is not the right solution, or even an acceptable one.

We can't have 4 FEMA's competing at once over disasters, bidding against each other. Why would anyone think this is any better than 4 US Air Forces bidding for work?

Just contracting out a government function to a private business does not make it more efficient. The free enterprise system has long recognized that a private monopoly player is dangerous to the economy and to the nation because it will very probably exhibit greed and cronyism.

These Pre-cambrian cockroaches of privatization need total fumigation, and relentless regular preventive treatment. You have to kill them at their nest, in this case within the Republican and Libertarian parties.

Posted by: JimPortlandOR | Sep 11, 2005 11:12:13 PM

Pete Domenici was on CSPAN Sunday answering questions from three reporters on the energy beat. At one point he remembered back to hurricane Andre and the administrator who did such a good job at that time and since gone on to great success, Frank Carlucci.

These guys use emergencies and disasters to make their piles of money. Their politics has less to do with principles than their pocketbooks.

The fact is all of us have to realize by the evidence of Katrina that this government is not capable of protecting us. We have to protect ourselves, individually and collectively.

Prepare yourself for an expensive and cold winter because George W sure ain't gonna be there to help with the fuel bill.

Posted by: gmoke | Sep 11, 2005 11:17:39 PM

JiminPortlandOR really nails it. I think the whole discussion of privatizing FEMA is too bizarre for words, especially all these rightwingers quoting Adam Smith (who also lectured against the danger of monopoly -- I think; it's been awhile.).

First, the Clinton Dems did a lot of government "outsourcing" as part of REGO. Kerry And Clark talked about the same sort of thing during the 2004 primaries. This is hardly a partisan issue, cutting federal payrolls and contracting things out to specialized industries where appropriate. Making government more responsive and flexible was the whole message of REGO, but without the silly hyperbole about the government having no role at all. It would still be federal officials overseeing the private firm to make sure it carried out the contract appropriately. It's just that somebody else would be paying the reponders' wages. I haven't seen a single argument that argues why FEMA is *specifically* a good candidate for this sort of outsourcing. It's all broad classic-economics-jargon handwaving.

Second, market efficiency is built on the idea of competitive firms driving profits down to (economic)zero. But that can't happen if the government just signs a contract with a firm that has no competition at all because of cronyism (Cheney + Halliburtan) or because the bids are only taken every 10 years and there are huge inefficiencies in moving from one firm (with its paper trail) to another. Bainbridge talks about "Fixed price contracts" that will drive costs down. Do we *want* firms "cutting costs" of emergency relief? And why insert the profit layer anyway? You might drive down wages because there's less unionization in the private sector, but by sticking in a 10% profit and the incentive not to let the margin shrink, you probably wouldn't save taxpayers any money (they're still footing the bill afterall), just shift the payments away from workers and toward directors and stockholders.

Thirdly, the private sector has responded beautifully because it's great PR to do so. There's an easy conflation in everything I've read from the right on this topic between private charity and private industry acting like charity (or being prevented from doing so by red tape). But the Red Cross is designed to complement the public response in this kind of situation. It makes no difference from their end who they're complementing -- Haliburtan of the FEMA. WalMart and the charter bus companies are doing it either out of charity or out of the desire for PR or both. But once you hire somebody who's job is to do disaster relief, the PR benefit of "going the extra mile" disappears completely. You get no kudos for just doing your job. Does Haliburtan seem like it's itching to please in Iraq? No, but it's certainly "cutting costs", including accounting enforcement costs.

The whole thing is just very weird, another excuse to rant about government. The problem isn't "big government"; it's government that doesn't take itself, or its public role, seriously.

Posted by: tlaura | Sep 11, 2005 11:50:50 PM

If this were a game of Clue, the winning formula would be Mr. Bush in the Oval Office with the campaign contributor.

story of the bush administration, i'm afraid...

Posted by: almostinfamous | Sep 12, 2005 1:05:48 AM

Just because the Bush administration can't plan their way out of a paper bag, it doesn't mean the rest of us are as stupid as they are.

They are caught in a quandry of their own making. They hate government. To them, the purpose of government is to direct as many taxpayer dollars to their friends as possible. The concept of using their power or influence or money to help people is somewhat insulting to the frat boys in charge of this government.

They can't plan, they can't run a war, they can't run an economy, they've driven up the debt to unprecedented levels, and they are carving up the bill of rights like a Thanksgiving Turkey.

What have these people done for us? They've turned the federal government into a bungling mess, they've gotten us into a quagmire in Iraq, they've destroyed what was left of the health care system, they've crapped on the poor and given untold gifts to the rich.

At what point do we say enough is enough?

Nancy Pelosi was right when she said this week that Bush is dangerous. We've gotten past the point where we can indulge these greedheads. It's time to take action - the Bush administration is completely inept.

Posted by: bleh | Sep 12, 2005 3:36:30 AM

It never cease to amaze me how are american brothers vision of understanding what is happening to them failing them every turn of the way .
Here you talking about FEMA been privatized . And then you fail to see your whole federal government is private organization working for IRS who is an extension of WB to collect what is taxing you since the day you claimed you are a nation.
Everything in your nation is base on serving the business what ever this business is . You have a government that drop the pretensions of so called democratic vote and is deciding who the front man is . You have private armies under the control of few men who won your country , then your legal system is a private organization as well your police so called law enforcement agencies , in short open your eyes little brothers and take a look around you . A very hard eye opening look .
You are not free you never been free . They have feed you the illusions as they seen fit and when ever it serve their purpose . Now the patriotic feeling is not working any more to go kill for them they will force you into it .
It is a wake up call people if you dont make a stand do not worry any more with this theoretical intellectual way they brainwash to think and to act as though you are in control of your destiny and all can be solved or go away if you have an intelligent conversation between you and decide what is what . They have manage to divide you and make you not trust each other or help each other as a community . If you dont unite then all you manage to achieve with all this talk between you is lead your selves into total enslavement and worst .


Posted by: HardHawk | Sep 12, 2005 6:57:30 AM

So if your contention that the success of the private sector was that they had standing infrastructure, then you have some choices to make if you wish to replicate these successes.

1) Give government existing and standing infrastructure. Not likely nor efficient.
2)Include the existing private infrastructure as part of the solution.

According to Ezra, it was solely the existing infrastructure. That being the case, you will never be able to duplicate the successes without the private sector.

Posted by: Fred Jones | Sep 12, 2005 9:23:32 AM

Contracting-out production is one thing, but service provision is too much of a mixed bag for privatization assumptions to hold. The problem with their market ideology is it's so rooted in necessitarian logic (the market will fix it) that it becomes an excuse for passivity.

Hence, we have a privatization paradigm that doesn't includes much thought on actually managing the contracting-out. Contracts don't fulfill themselves, they require oversight and proper management. The Pentagon, the biggest out-sourcer, doesn't have a single, coherent entity able to effectively design and administer contracts. Market ideologues don't even understand markets very well.

Anyway, this idea that emergency management ought to be marketized is ridiculous. Buying school lunches is one thing; if anything is the public sector's provence, it ought to be emergency services.

Check this out too.

Posted by: Stygius | Sep 12, 2005 11:20:03 AM


You're dead on with this post, I've already seen conservative libertarians and Republicans promoting just this agenda on a number of blogs.

A longtime resident of South Florida, I was in South Miami eight hours after hurricane Andrew hit and the devastation that I saw in Biloxi and Gulfport reminded me of that. It was the worst thing I've ever seen.

During that disaster the National Guard which was already in Dade County, moved north to Palm Beach County just before the storm hit, and were back in Dade County in force six hours after the eye came ashore. Within 24 hours FEMA and the National Guard were well established in the worst hit areas, and within 72 hours, with the help of the Air Force, they had the situation well in hand.

During the hurricane Andrew disaster, orderly distributions of food, water and ice were the order of the day, and the FEMA people I worked with were some of the most organized, professional and compassionate go getters I've ever come across.

In contrast, I was totally disgusted by what I saw happening, or not happening, in New Orleans and along the Gulf Coast.

The Bush administration is a travesty and a joke, but the ultimate responsibility for those lives needlessly lost falls upon the American people, who apparently elected and then reelected this sad excuse for a leader.

Posted by: Aaron | Sep 12, 2005 12:19:07 PM

TALLAHASSEE — One thing Florida knows is hurricanes.
Florida emergency planners criticized and even rebuked their counterparts -- or what passes for emergency planners -- in those states for their handling of Hurricane Katrina. Gov. Jeb Bush, the head of Florida AHCA and the head of Florida Wildlife (which is responsible for all search and rescue) all said they made offers of aid to Mississippi and Louisiana the day before Katrina hit but were rebuffed. After the storm, they said they've had to not only help provide people to those states but also have had to develop search and rescue plans for them. "They were completely unprepared -- as bad off as we were before Andrew," one Florida official said.

Posted by: Fred Jones | Sep 12, 2005 5:00:57 PM

Markets work because bad businessmen lose their jobs and their assets are bought by good ones. In theory, at least.

Democracy works because bad politicians lose their jobs and the positions are filled with good ones. In theory, at least.

Unfortunately, as Bush's career in both business and politics shows, sometimes bad businessmen and bad politicians are in a position to help each other in ways that will prevent each others' bankruptcies and election losses, respectively.

Posted by: Julian Elson | Sep 12, 2005 5:25:04 PM

tlaura, you actually overlooked one of the most insidious things about Halliburton's reconstruction contracts: the 'cost-plus' arrangement. Under this contract, the company gets it's costs for reconstruction back in full, guaranteed, plus a profit premium of say, fifteen percent, guaranteed. Now, can you spot the incentive for them to hold down costs? If you said there isn't one, you'd be correct. In fact, simple math tells us that they have every incentive to inflate those 'costs' as much as possible. Where profit = (costs) x (X), don't be surprised when costs miraculously get bigger and bigger.

On a more general note, the market fundamentalists' faith-based belief that government can never provide a service more efficiently than the private sector is as fevered as their erstwhile political faction partners' belief that evolution is just a 'theory'. In point of fact, can anybody show me a retirement insurance / pension plan that operates on .6% overhead, as does Social Security? Or a health insurance plan that operates on 3% overhead, as does Medicare?

I believe it's pure dogma to believe either that government can ALWAYS do a better job of delivering services than the private sector or that it can NEVER do a better job. We in the reality-based community however, show much more of a penchant for promoting policies that provide empirical evidence of success rather than ideological satisfaction.

And funny how the market worshippers quote Adam Smith when touting the 'invisible hand', yet somehow forget about his belief in taxation based on ability to pay. As I wrote: curioser and curioser.

Posted by: Lewis Carroll | Sep 12, 2005 11:58:31 PM

Of course, that was the first draft, before I learned how to spell (or at least use spell-check). Should be: curiouser and curiouser.

Posted by: Lewis Carroll | Sep 13, 2005 12:01:32 AM

Lewis: interesting points about Haliburtan and cost-plus. To be fair to Bainbridge and the privatizers though, he's advocating the other model, the fixed-price model for outsourcing the FEMA. I agree Haliburtan would be better put on a fixed-rate schedule in Iraq... or maybe not. I don't know whether more cost-cutting would hurt the troops. But I think the real problem with Haliburtan is that they have absolutely no fear of losing their contract with the feds. Where there is no competition, the private sector flounders, has no reason not to be really, really inefficient. And on top of that they generally pay their employees worse than the government.

Posted by: tlaura | Sep 13, 2005 1:46:32 AM

I'm not an economist and have difficulty with market complexities, but what I see on the simplest most obvious level, is that our political system is largely overwhelmed by lobbyists from the corporate sector, which favors privatization of the planet.

Both sides of the aisle live or die according to the amount of contributions they receive from business. Retiring top military and FDA honchos move seamlessley into corporate jobs. A cliche, but: The "political-military-industrial" wiring becomes ever more secure each time the uninformed and easily misled public puts into office a pair of greedy cynics like Bush/Cheney.

But the wimpish democrats, who at the moment are politically bold because they are smelling blood, are thoroughly corrupted by the system, as well, and are thereby rendered ineffective in providing us with a democracy not entirely overridden by market imperitives. Business is politics and politics is business and what we are seeing is merely an unrestrained outgrowth of this arrangement. And it ain't gonna change.

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