Local Knowledge

In a editorial that bordered on irrational, The New York Times (ardent supporter of both Barack Obama and Big Government) used Hurricane Sandy and its disastrous aftermath to argue that big government was good and that Mitt Romney was somehow bad because he dared (in a speech months ago) to criticize the FEMA bureaucracy. The NYT suggested that only big government can provide effective assistance in a natural disaster and that local and state government just wouldn't do. They suggested that allowing private enterprise to take over some of the responsibility was "absurd."

Mary Katherine Ham comments:

The logical conclusion of the editorial, read with more charity than they afforded Romney, is that FEMA and federal disaster relief run perfectly well and that no one should propose changes to their structures unless that change is to give them more money. The NYT scoffed at the idea that “profit-making companies can do an even better job” and discounted the contributions of state and local governments entirely. As too many do with government functions, they assume spending more money means FEMA is doing more good. Of course, more money could just mean more poison trailers and more fraud, but we’ll all feel good that the agency is spending more money, I suppose.

Perhaps the New York Times editorial writers should read their own newspaper, as it updated us on the lingering weaknesses of FEMA Monday—a GAO report found inconsistencies in how it trains and hires disaster assistance employees— and offered this nugget about FEMA director Craig Fugate’s plans:

Since [Katrina] it has tried to strengthen its ability to respond to a major disaster, both by rebuilding its own supply management system and personnel, and by fostering stronger ties to outside parties, including the Defense Department and even the owners of big box retail stores, which Mr. Fugate said might be turned to as a backup for emergency supplies.

This is the same Fugate, praised for leading FEMA competently through Midwestern tornadoes and hurricanes alike, who coined the term “Waffle House Index”* to describe the metric FEMA now uses to determine where its resources are needed most. Here’s how it works. The Waffle House chain has a huge number of stores located in the Southeast and Midwest in areas that frequently see devastating storms. As such, it has created an enviable corporate culture so attuned to disaster recovery that Fugate knows, “If you get there and the Waffle House is closed? That’s really bad. That’s where you go to work.”

Because Barack Obama supports big government solution for just about everything, it's not the least bit surprising that the NYT and almost all Obama supporters heartily agree. Could it be that they're right? The simple answer is "No, they're not."

In the same issue of the NYT, James Pethokoukis (quoted by Ham) makes the following observation:

A superstorm requires supersmart government. But making wise decisions from a distance is hard. Economists call this the problem of local knowledge. [emphasis mine] The information needed for making rational plans is distributed among many actors, and it is extremely difficult for a far-off, centralized authority to access it. The devil really is in the details. (This is why the price system, which aggregates all that dispersed insight, is more economically efficient than a command-and-control system.)

So emergency and disaster response should be, as much as possible, pushed down to the state and local level. A national effort should be reserved for truly catastrophic events. Indeed this preference for “local first, national second” can be found in the legislation authorizing the Federal Emergency Management Agency.

The closer that decision making is to the problem—whether its disaster relief, education, social services, medical care or just about anything other than national defense and infrastructure—the better decisions and resource allocation will be, and as a consequence, the better the end-result. But don't tell big government types that simple reality. After all, according to the NYT, the folks in Washington, D.C know best—as long as they're Democrats, that is.