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April 20, 2006
Heritage Foundation Resource Bank Event

Posting has been light as I have been attending the Heritage Foundation's annual Resource Bank event. Bridgett Wagner invited me to speak on a forum about the lessons of Hurricane Katrina and its implications for big-government solutions. Joining me on the panel was Ron Utt of Heritage as moderator, Louisiana state representative Steve Scalise, and Forest Thigpen of the Mississippi Center for public policy. Steve started by reviewing in detail the ways that FEMA has mismanaged the funds allocated to long-term recovery in New Orleans. Steve promised me a copy of his presentation, and I hope to collect it tomorrow; he did a wonderful job in relating how the government procurement process has sabotaged the clean-up and rebuilding of New Orleans while the money goes everywhere but where it's needed.

I'll give you one example that I recall from my notes. After almost eight months, much of the debris left behind by the hurricane and massive flooding has still not been removed -- which must happen before rebuilding can begin. One of Steve's constituents hired a private contractor to get the job done at $15 per cubic foot, but was warned repeatedly by FEMA officials that they would not reimburse him for the work since it had not gone through proper channels. After debating the point with FEMA for a while, the Louisianan gave up and applied for removal through FEMA. Instead of spending $15 per cubic foot, FEMA paid the new contractor $35 per cubic foot. Given that New Orleans has millions of cubic feet of debris to remove, the extra $20/cf will explode the costs of the cleanup.

Oh, and one other point about this anecdote: the contractor FEMA hired subbed the job to the original contractor hired by the constituent -- who got the same $15/cf that the constituent negotiated.

In a related issue, much of the debris could be recycled, such as steel and other materials. However, to the extent that anything has been cleaned up, 100% of it is going into landfills, a diminishing resource in the hurricane areas. The contractors hired by FEMA do not get paid any money for material that cannot be documented as ending up in the landfill, where it can be measured. Also, any money that the contractor receives for the recyclable material has to be given to FEMA in full. Without any incentive to spend time separating recyclable material to salvage the raw materials that could be used in rebuilding, it's all going into the trashheap instead.

Tell me that isn't a government program.

I spoke about the ability of blogs to report the actual facts and to combat the urban legends that arise, and gave several examples of Katrina myths exploded by the blogosphere. Without accurate information, people cannot arrive at rational policy decisions, and blogs can play a critical role in providing the facts. I also spoke about Porkbusters and the lack of sympathy towards it by entrenched politicos of both parties. That got a lot of attention, and hopefully the main Porkbusters sites will see a bit more traffic in the days ahead.

The Q&A session afterwards brought some interesting questions. One person challenged me about the inefficacy of bureaucracies, maintaining that they performed some tasks quite well, as long as it involved non-time-critical functions with clear mandates; he gave the IRS as an example. I pointed out that bureaucracies exist to stop things from happening, and in some cases that can be useful. Bureaucracies can keep people from enacting hasty policies and procedures that could do damage. More often than not, however, it snarls efforts and bloats costs while almost intending that no real work gets accomplished.

In the above example, the FEMA bureaucracy could have been bypassed and block grants given directly to the residents for clearing debris and buying their own trailers, and it would have avoided all the subcontracting and middlemen that have escalated costs beyond belief. In doing so, the money could have been misused or fraudulently obtained without the FEMA bureaucracy to stop con men from exploiting the emergency relief efforts. However, we would also have seen a lot more work for people in the area for clean-up tasks and they probably would have finished it long ago. Bureaucracies don't work for emergency response efforts, and FEMA isn't unique among government agencies either. Solving the problem requires a different model, one that puts more of the decision-making power into local hands while assisting them financially.

I'll post more about this tomorrow. Posting will be light until Saturday, but I will still have a few items for CQ readers.

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Posted by Ed Morrissey at April 20, 2006 11:15 PM

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