New Orleans

So New Orleans is underwater, and hundreds are dead, and everyone is wringing their hands about how everything should have been handled better...

Really, people, it’s time to wake up to reality. The government will never handle anything better, since it has no interest in doing so. What will the results be of this latest disaster?

Hmm, let’s see. Slipping on the psychic data helmet, I see…

- Increased funding for government disaster relief agencies…? Why yes, I think I can see that!

- Wait – what’s that? A new department of Homeland Disaster Relief? In charge of all the other alphabet agencies? Yeeees, there it is!

- Cries for accountability, followed by promotions for all the guilty… Naturally!

- Ah – ah! – my eyes water from the constant blurring of evidence and facts. It was a category four hurricane! (No, it was a category two when it tangentially hit New Orleans). The dykes could only handle a category three! (No, they weren’t even breached – the water just slopped over the rim and washed away the foundations on the far side.) It would have cost billions to make the city safer. Let’s say 1.5 billion dollars – even though I bet that the private sector could do it for one tenth that amount – over 500,000 inhabitants, that’s, oh, $3,000 per resident, over twenty years, that’s about $200/year with interest. Worth it? Of course! If the free market had been allowed to operate, market forces would just have automatically deducted that cost from the cost of housing, as an incentive for people to come and live in New Orleans..!

- Oh, and last but not least, let’s try wading through the river of cash that the Army Corps of Engineers will now be getting to reinforce other cities at risk. And will they be efficient? Well, imagine if tomorrow they found a way to reinforce a city for a tenth of the cost they claimed New Orleans required. The result? Outrage! Oh, no, I think we can with confidently predict that flood-proofing other cities will turn out to be far more expensive than what was even claimed for New Orleans.

How much does the government care? Well, they found all the money in the world for a war in Iraq. But for saving US citizens? Sadly, there’s just no money for that! Let’s get the private sector and charities involved!

The fact that people respond to incentives is the first law of economics. Every time a government department screws up, it gets additional funding. 9/11 came completely out of the blue – and intelligence funding went up exponentially. When crime increases, police get more money. When drug use goes up, the DEA gets more money. Students doing badly? Let’s shovel more money at the DOE!

If you pay a salesman for losing deals, or a doctor for worsening illnesses, how do you think they will perform? More importantly, what kind of workers prefer negative incentives? The competent ones?

Naturally, the general public will remain blind to all of this. They will get angry at individuals, roundly attack certain policies and loudly demand that funding be increased. And more and more people will die, in terrorist attacks and natural disasters, until people’s eyes open.