WEBVTT NOTE Katrina and Socialist Central Planning 1 00:00:00.000 --> 00:00:10.000 Watching the Capitol Hill hearings on what went wrong after Hurricane Katrina provided a glimpse of what it must have been like in the Politburo in the 1950s. 2 00:00:10.000 --> 00:00:17.000 The Soviet bureaucrats would gather with the party officials and the factory and farm managers to figure out why grain production was down, 3 00:00:17.000 --> 00:00:23.000 or why shop shelves were empty, or why the bread lines were longer and the quality ever worse. 4 00:00:23.000 --> 00:00:35.000 They gathered under the conviction that they had a workable system that was being rendered unworkable because of the incompetence or shirking or wrecking of certain key players in the chain of command. 5 00:00:35.000 --> 00:00:45.000 No one was permitted to say that the command system itself was a problem. Instead they had to place blame on someone as if all problems could be reduced to issues of obedience. 6 00:00:45.000 --> 00:00:51.000 It was all as a scramble. Whoever was finally said to be at fault faced certain ruin. 7 00:00:51.000 --> 00:00:57.360 To be sure, there was plenty of blame to go around. Even with rats in a maze, there was 8 00:00:57.360 --> 00:01:02.480 a sense in which they were all responsible for not having found the exit. If those rats 9 00:01:02.480 --> 00:01:07.600 could also organize into a hierarchy of control and hold trials, it would surely produce a 10 00:01:07.600 --> 00:01:13.960 great show and many victims. But at the end of the day, the rats would be no closer to 11 00:01:13.960 --> 00:01:19.960 getting out of the maze. And so it was with the U.S. Congress. The hearings produced a 12 00:01:19.960 --> 00:01:29.040 The Soviet system had to fully unravel before it became permissible to state what used to 13 00:01:29.040 --> 00:01:36.560 be a crime to even think. You can't command an economy. You can make every demand, issue 14 00:01:36.560 --> 00:01:41.720 a million orders, exhaust every financial resource in the state's account, elevate 15 00:01:41.720 --> 00:01:46.960 some people, demote others, dress up in a military costume and make ground pronouncements 16 00:01:46.960 --> 00:01:53.720 from a glorified pedestal, cut off fingers, toes and heads, but in the end you can't 17 00:01:53.720 --> 00:02:00.820 make the economy perform in a way that serves the people unless you let market forces work. 18 00:02:00.820 --> 00:02:03.960 Not just the Soviets had to learn this lesson. 19 00:02:03.960 --> 00:02:08.120 Authoritarian regimes from the beginning of time have attempted to defy the laws of economics, 20 00:02:08.120 --> 00:02:12.560 step on the interests of the merchant class, control and redirect the wishes of consumers 21 00:02:12.560 --> 00:02:18.000 and Entrepreneurs bend and kick prices and wages this way and that and inhibit trade in 22 00:02:18.000 --> 00:02:19.000 every way. 23 00:02:19.000 --> 00:02:24.220 But they cannot finally overcome the driving desire and the part of people to control their 24 00:02:24.220 --> 00:02:29.580 own fate and not be subject to the slavery that is collectivism of all colors whether 25 00:02:29.580 --> 00:02:32.920 red or green or brown. 26 00:02:32.920 --> 00:02:37.420 Someday the U.S. managers of crises will have to come to the same point, but for now they 27 00:02:37.420 --> 00:02:42.000 are like the Soviet bureaucrats scrambling to make an unworkable system function and 28 00:02:42.000 --> 00:02:46.000 and creating a scene that is as farcical as it is tragic. 29 00:02:46.000 --> 00:02:52.000 Consider first how the much glorified Department of Homeland Security responded to the Katrina crisis. 30 00:02:52.000 --> 00:02:58.000 There's a mysterious missing day between the time the hurricane hit and the levees broke and flooded New Orleans. 31 00:02:58.000 --> 00:03:06.000 During this strange Monday, August 29th, a day in which there was a window of opportunity to prevent the meltdown of civilization, 32 00:03:06.000 --> 00:03:10.000 why didn't federal officials respond or even pretend to respond? 33 00:03:10.000 --> 00:03:20.000 The head of the Department of Homeland Security, Michael Chertoff, said that he read in the Tuesday morning newspaper that according to the headline, New Orleans dodged the bullet. 34 00:03:20.000 --> 00:03:24.000 So to his mind there was nothing to do. This was his testimony. 35 00:03:24.000 --> 00:03:31.000 Now this is not exactly an awe-inspiring admission, but it speaks to a truth that few are willing to admit. 36 00:03:31.000 --> 00:03:37.000 Government officials lead normal lives. They do not partake of the mind of God. 37 00:03:37.000 --> 00:03:41.740 They get their news just like you and me and they have far less information than the body 38 00:03:41.740 --> 00:03:47.920 of knowledge generated by the signaling processes in the market, economy and the private sector. 39 00:03:47.920 --> 00:03:52.560 We might even say that they are in effect sub-normal in intelligence because government 40 00:03:52.560 --> 00:03:57.000 officials stand outside society, cut off from normal channels of information that the rest 41 00:03:57.000 --> 00:03:58.000 of us take for granted. 42 00:03:58.000 --> 00:04:02.240 They are isolated from markets and the regular pressures of life. 43 00:04:02.240 --> 00:04:06.920 They are not owners of what they control and have no real stake in the value of their product. 44 00:04:06.920 --> 00:04:19.920 They're surrounded by some of the most peculiar people in the world, namely lifetime politicians, power-mad politicians, lifetime bureaucrats, I beg your pardon, and lobbyists on the make. 45 00:04:19.920 --> 00:04:22.920 This is their world. This is what they know. 46 00:04:22.920 --> 00:04:32.920 Now, they enjoy the illusion of being better informed than the rest of us, so it would hardly occur to a high official to surf Google News to find out what's really going on. 47 00:04:32.920 --> 00:04:37.620 This was apparently beyond the capacity of FEMA to find out that the National Weather Service, 48 00:04:37.620 --> 00:04:44.220 repeating what private weather services had said, had issued a flood warning right after the hurricane hit. 49 00:04:44.220 --> 00:04:47.520 Certainly the municipal government of New Orleans got the message. 50 00:04:47.520 --> 00:04:54.920 It issued a warning to residents and then all the officials packed up their stuff and headed to Bataille Rouge. 51 00:04:54.920 --> 00:05:01.020 I suppose that this was the plan that the bureaucrats came up with after having received a $500,000 federal grant 52 00:05:01.020 --> 00:05:04.020 to Design a Comprehensive Plan for Evacuation. 53 00:05:04.020 --> 00:05:07.020 Half a million dollars later, they agree on what the plan should be. 54 00:05:07.020 --> 00:05:09.020 Two words, let's go. 55 00:05:09.020 --> 00:05:14.020 Now we can learn from observing this. 56 00:05:14.020 --> 00:05:20.020 It is always the case that the government's first interest in a crisis is the protection of itself. 57 00:05:20.020 --> 00:05:23.020 The public interest is way down the list. 58 00:05:23.020 --> 00:05:28.020 Government employees have no ancient code that requires them to go down with a ship. 59 00:05:28.020 --> 00:05:34.020 The seafaring captain might feel disgrace if he lost his crew and passengers but returned safely to shore. 60 00:05:34.020 --> 00:05:39.020 But the government bureaucrats would see this as nothing but rational self-interested work. 61 00:05:39.020 --> 00:05:43.020 From their point of view, public service is not a suicide pact. 62 00:05:43.020 --> 00:05:50.020 If this is so, are we wise to expect government service at times of crisis? 63 00:05:50.020 --> 00:05:55.020 Well, here is where it gets complicated. They always promise they will take care of us. 64 00:05:55.020 --> 00:06:00.020 On the day the hurricane hit, for example, President Bush made the following announcement. 65 00:06:00.020 --> 00:06:05.020 For those of you who are concerned about whether or not we're prepared to help, don't be. 66 00:06:05.020 --> 00:06:10.020 We are. We're in place. We've got equipment in place. Supplies in place. 67 00:06:10.020 --> 00:06:18.020 And once we're able to assess the damage, we'll be able to move in and help the good folks in the affected areas. 68 00:06:18.020 --> 00:06:22.620 Well, given the calamity that followed, this statement by Mr. Bush might have been a Soviet 69 00:06:22.620 --> 00:06:27.340 propaganda poster about the glorious future of socialism. 70 00:06:27.340 --> 00:06:31.140 The only response of government, however, were to turn and run that could be accused 71 00:06:31.140 --> 00:06:35.740 of hypocrisy, but surely it would be better than the alternative of bad government that 72 00:06:35.740 --> 00:06:40.020 stayed to ruin the work that markets and private individuals do. 73 00:06:40.020 --> 00:06:43.680 As the hurricane approached, for example, Mr. Bush, along with nearly every office holder 74 00:06:43.680 --> 00:06:49.000 in the entire region immediately announced that there would be no toleration for so-called 75 00:06:49.000 --> 00:06:51.180 price gouging. 76 00:06:51.180 --> 00:06:56.300 What is and what is not price gouging remains undefined by law, but there are still criminal 77 00:06:56.300 --> 00:06:59.720 penalties attached to doing it. 78 00:06:59.720 --> 00:07:03.360 If you raise your price to the point where you attract a complaint, there's a good 79 00:07:03.360 --> 00:07:06.520 chance you will be thrashed as a gouger. 80 00:07:06.520 --> 00:07:10.240 And yet we have to ask ourselves what the purpose of a price is. 81 00:07:10.240 --> 00:07:14.940 It's a signaling device that allows market players, including both producers and consumers, 82 00:07:14.940 --> 00:07:19.100 to adjust their economic behavior in light of supply and demand. 83 00:07:19.100 --> 00:07:24.540 If supply remains the same and demand rises, the price too will have to rise so the market 84 00:07:24.540 --> 00:07:25.540 can clear. 85 00:07:25.540 --> 00:07:31.360 Otherwise, there will be shortages and surpluses that prove to be a benefit to no one. 86 00:07:31.360 --> 00:07:36.220 Bill Anderson has called gouging rules a form of backdoor price controls, and he's right. 87 00:07:36.220 --> 00:07:41.420 to Create Victims, Encourage Economic Dislocation and Foster Black Markets 88 00:07:41.420 --> 00:07:45.820 One might think that a Republican administration would understand this, but reflect on the 89 00:07:45.820 --> 00:07:51.340 fact that Iraq still has very strict price controls on gasoline, controls that were imposed 90 00:07:51.340 --> 00:07:54.460 by the Bush administration after Saddam was overthrown. 91 00:07:54.460 --> 00:07:59.300 Don't think for a minute that it is beyond the capacity of the Bush administration to 92 00:07:59.300 --> 00:08:05.580 do what the Nixon administration did, which was to believe that the force of regulation 93 00:08:05.580 --> 00:08:12.020 can overcome the laws of markets, and by gouging laws to the extent that they are obeyed 94 00:08:12.020 --> 00:08:17.460 will create shortages, but in telling the sad tale of Katrina, I'd like to mention 95 00:08:17.460 --> 00:08:21.940 not a case of shortage but a strange case of surplus. 96 00:08:21.940 --> 00:08:26.540 One week after the hurricane, FEMA ordered the Army Corps of Engineers to buy 211 million 97 00:08:26.540 --> 00:08:32.820 pounds of ice from IAP Worldwide Services of Florida. 98 00:08:32.820 --> 00:08:39.820 The trucking companies were notified of a grand opportunity since the government was going to pay for delivery, and the dispatchers sent out the word. 99 00:08:39.820 --> 00:08:49.820 Now there's no space to explore the workings of IAP worldwide, but I will observe that the company, which exists solely to get your tax dollars as a Federal contractor, 100 00:08:49.820 --> 00:08:58.820 has a new CEO who most recently held the position of Vice President of National Security Programs for the notorious Kellogg Brown and Root. 101 00:08:58.820 --> 00:09:00.820 His name is David Swindle. 102 00:09:03.820 --> 00:09:05.820 Back to the story of the chaos. 103 00:09:05.820 --> 00:09:10.820 One trucker picked up ice in Greenville, Pennsylvania and was told to drive it to Carthage, Missouri. 104 00:09:10.820 --> 00:09:16.820 When he arrived in Carthage, he was told by another female official to go to Montgomery, Alabama. 105 00:09:16.820 --> 00:09:21.820 After a day and a half of sitting in Montgomery, he was told to go to Camp Shelby, Mississippi, 106 00:09:21.820 --> 00:09:45.940 The News Media Chronicle the stories of these truckers. 107 00:09:45.940 --> 00:09:50.580 A truck full of ice was sent from Dubuque, Iowa to Meridian, Mississippi, then to Barksdale 108 00:10:20.580 --> 00:10:26.380 In one of the first incidents reported of what was to be two weeks of catastrophe, a 109 00:10:26.380 --> 00:10:30.720 group of volunteer firefighters from Houston came to New Orleans wanting to help. 110 00:10:30.720 --> 00:10:32.740 They were ordered to wait. 111 00:10:32.740 --> 00:10:35.620 They waited 48 hours and then were ordered to leave. 112 00:10:35.620 --> 00:10:40.620 A group of doctors from Maryland tried to get in, but FEMA sent them on to the Red Cross, 113 00:10:40.620 --> 00:10:44.780 which said it could do nothing without the approval of federal health officials, which 114 00:10:44.780 --> 00:10:45.780 was not forthcoming. 115 00:10:45.780 --> 00:10:51.860 After the New Orleans mayor made a call for firefighters to come help, a public call, 116 00:10:51.860 --> 00:10:55.500 a thousand volunteers were sent to Atlanta, where they were put in a conference room at 117 00:10:55.500 --> 00:11:01.860 the Sheridan Hotel and subjected to seminars on sexual harassment. 118 00:11:01.860 --> 00:11:05.420 They were then told that their first job would be to distribute flyers with a message on 119 00:11:05.420 --> 00:11:11.380 it, call 1-800-621-FEMA. 120 00:11:11.380 --> 00:11:15.340 Many of these people, well-trained, left town at that point. 121 00:11:15.340 --> 00:11:19.340 Those who stuck it out headed for Louisiana were aghast that their first assignment was 122 00:11:19.340 --> 00:11:24.260 not to fight fires, which have been raging for a week, but to escort President Bush on 123 00:11:24.260 --> 00:11:27.380 his TV-laden tour of the area. 124 00:11:27.380 --> 00:11:29.300 You can see all the photos on whitehouse.gov. 125 00:11:29.300 --> 00:11:36.020 In fact, FEMA refused offers of help of all sorts because of issues of control as well 126 00:11:36.020 --> 00:11:37.740 as incompetence. 127 00:11:37.740 --> 00:11:41.780 FEMA declined help from Amtrak in evacuating people from New Orleans. 128 00:11:41.780 --> 00:11:45.860 The Chicago municipal government wanted to send volunteers from the fire department, 129 00:11:45.860 --> 00:11:49.660 police department and hospitals, FEMA said no. 130 00:11:49.660 --> 00:11:54.260 Same happened in New Mexico where the governor volunteered equipment and personnel. 131 00:11:54.260 --> 00:11:58.860 FEMA presented Walmart from delivering tank trucks full of water and the Coast Guard from 132 00:11:58.860 --> 00:12:00.340 delivering diesel fuel. 133 00:12:00.340 --> 00:12:04.500 They even cut the communication lines for Jefferson Parish. 134 00:12:04.500 --> 00:12:11.540 The local sheriff ended up posting armed guards to protect the restored lines from FEMA. 135 00:12:11.540 --> 00:12:15.540 An interesting model that many communities around the country would do well to imitate 136 00:12:15.540 --> 00:12:18.220 in the future. 137 00:12:18.220 --> 00:12:22.320 A chief medical officer for a large ambulance company said he was unable to find helicopters 138 00:12:22.320 --> 00:12:26.840 to pick up patients in danger of dying from the Superdome. 139 00:12:26.840 --> 00:12:32.500 He walked outside and discovered the two helicopters donated by an oil services company had been 140 00:12:32.500 --> 00:12:36.340 ordered to stay in the parking lot. 141 00:12:36.340 --> 00:12:41.080 Morticians attempted to donate their help, but FEMA said absolutely not on grounds that 142 00:12:41.080 --> 00:12:54.080 As for the National Guard, for days it would not allow reporters into the Superdome where tens of thousands were trapped. 143 00:12:54.080 --> 00:12:59.080 People were hungry and thirsty, but the National Guard would not allow the Red Cross to deliver food. 144 00:12:59.080 --> 00:13:03.080 Here's an astounding statement from the spokesperson for the Red Cross. 145 00:13:03.080 --> 00:13:10.080 The Homeland Security Department has requested and continues to request that the American Red Cross not come into New Orleans. 146 00:13:10.080 --> 00:13:17.080 Right now, access is controlled by the National Guard and local authorities. We cannot get into New Orleans against their orders. 147 00:13:17.080 --> 00:13:23.080 The Salvation Army attempted to rescue two of its own officers trapped in a building and on dialysis. 148 00:13:23.080 --> 00:13:31.080 They rented three boats for a rescue, but they were not allowed through, though to be fair, the Salvation Army did not specifically name the government as at fault, 149 00:13:31.080 --> 00:13:50.080 The U.S.S. Bataan, a floating hospital for 600 patients that happened to be nearby at sea and had ridden out the storm, was still sitting empty by the third day, not permitted to do its job. 150 00:13:50.080 --> 00:13:59.080 An astounding case of ineptness comes to us from the case of three Duke University students who drove to New Orleans to help but were turned away by the National Guard. 151 00:13:59.080 --> 00:14:05.080 They had seen the news and knew they could help and wondered why they should be pushed around by bureaucrats. 152 00:14:05.080 --> 00:14:08.080 Being college sophomores, they took a risk. 153 00:14:08.080 --> 00:14:12.080 They forged press credentials with fake IDs and shirts and the works. 154 00:14:12.080 --> 00:14:17.080 They went back and adopted a very haughty tone. The National Guard let them right in. 155 00:14:21.080 --> 00:14:28.080 Then the students drove to the convention center where they found thousands of sick, hungry, thirsty and dying people in desperate need. 156 00:14:28.080 --> 00:14:38.080 They found a man who had welts all over his body. He'd been in a tree covered with fire ants as the waters rose and it stayed there being bitten repeatedly for up to 24 hours. 157 00:14:38.080 --> 00:14:43.080 The boys picked him up and along with three others and drove them to a Baton Rouge hospital. 158 00:14:43.080 --> 00:14:51.080 They made another trip there and back with more people before they began to become frightened about what the government might do to them. 159 00:14:51.080 --> 00:14:57.140 In one return trip, they observed 150 empty buses driving the other way, and they have 160 00:14:57.140 --> 00:14:59.740 a video to prove it. 161 00:14:59.740 --> 00:15:03.920 One can only express astonishment at how the government treated the tens of thousands of 162 00:15:03.920 --> 00:15:08.400 people that it had herded like cattle into large public spaces. 163 00:15:08.400 --> 00:15:12.160 For reasons that are still unclear, the government couldn't get its act together on transporting 164 00:15:12.160 --> 00:15:16.800 them out, even as the people themselves were forbidden to leave. 165 00:15:16.800 --> 00:15:19.960 Once the central planners decided to move all these people from the Superdome to the 166 00:15:19.960 --> 00:15:33.840 The first bus to reach Houston was not driven or approved by the government. It was commandeered 167 00:15:33.840 --> 00:15:38.760 by a 20-year-old Jabar Gibson, who drove it from the floods and picked up as many people 168 00:15:38.760 --> 00:15:44.040 as he could and drove them all the way to Houston, a 13-hour drive. He beat the government 169 00:15:44.040 --> 00:15:49.800 system by a day. Meanwhile, the tens of thousands of people who had been shipped and shoved 170 00:15:49.800 --> 00:15:54.380 in the Superdome on Sunday before the floods came, were still suffering in that massive 171 00:15:54.380 --> 00:15:58.160 calamity by Friday and Saturday. 172 00:15:58.160 --> 00:16:02.240 Perhaps the most astounding case of incompetence was to receive the least attention. 173 00:16:02.240 --> 00:16:08.020 It relates to a 500-boat flotilla stretching over five miles that left New Orleans from 174 00:16:08.020 --> 00:16:10.480 Acadiana Mall in Lafayette. 175 00:16:10.480 --> 00:16:14.300 It involved a thousand people who had hoped to rescue hospital patients and take them 176 00:16:14.300 --> 00:16:15.300 to safety. 177 00:16:15.300 --> 00:16:23.300 It consisted of private boaters, fishermen, hunters and others who had spent their entire lives navigating the waterways of Louisiana. 178 00:16:23.300 --> 00:16:30.300 Once this caravan arrived, they were turned away by the Department of Wildlife and Fisheries, now being run by FEMA. 179 00:16:30.300 --> 00:16:33.300 All 500 boats were ordered out. 180 00:16:33.300 --> 00:16:36.300 Now keep in mind that this was three days after the hurricane hit. 181 00:16:36.300 --> 00:16:41.300 There were still a thousand people inside the Charity Hospital in New Orleans alone. 182 00:16:41.300 --> 00:16:44.300 They had no supplies and only three had been rescued. 183 00:16:44.300 --> 00:16:56.300 And at this very time, the head of the FEMA-ized Wildlife and Fisheries Department announced to the world on television that it needed no help from anyone and that it had all matters under control. 184 00:16:56.300 --> 00:17:06.300 Some White House staff members put together a DVD of the evening news coverage for Mr. Bush, who prides himself on not reading newspapers or magazines or watching television news, 185 00:17:06.300 --> 00:17:12.300 for him to watch on Air Force One, which was the only way they felt they could get him to understand the depth of the crisis. 186 00:17:12.300 --> 00:17:29.300 In fact, by the time he actually arrived in Louisiana, food and medicine deliveries, such as they were, were halted on orders of the White House to make way for the presidential caravan. 187 00:17:29.300 --> 00:17:40.300 In one particularly interesting detail, Katrina triggered the first use of the Department of Homeland Security's great accomplishment since it was created after 9-11, the National Response Plan, 188 00:17:40.300 --> 00:17:46.300 A 426 page central plan for dealing with a crisis on the level of the post-Katrina floods. 189 00:17:46.300 --> 00:17:48.300 Here's how the government describes its plan. 190 00:17:48.300 --> 00:17:56.300 The National Response Plan establishes a comprehensive all hazards approach to enhance the ability of the United States to manage domestic incidents. 191 00:17:56.300 --> 00:18:08.300 The plan incorporates best practices and procedures from incident management disciplines, homeland security, emergency management, law enforcement, firefighting, public works, public health, 192 00:18:08.300 --> 00:18:13.460 Health, Responder and Recovery Worker, Health and Safety, Emergency Medical Services and 193 00:18:13.460 --> 00:18:19.780 the Private Sector, and integrate them into a unified structure. It forms the basis of 194 00:18:19.780 --> 00:18:24.020 how the Federal Government coordinates with State, Local and Tribal Governments and the 195 00:18:24.020 --> 00:18:27.300 Private Sector during incidents. 196 00:18:27.300 --> 00:18:31.300 What happened to the National Response Plan after the floods? Well, it remained what it 197 00:18:31.300 --> 00:18:42.300 A Colorful PDF Download, A Thick Book on the Management's Shelves, An Item in the Government Printing Office Catalog, Birdcage Liner, and Many Other Things. 198 00:18:42.300 --> 00:18:48.300 One thing it was not was a National Response Plan that did all the glorious things listed above. 199 00:18:48.300 --> 00:18:52.300 As with all such plans from time immemorial, it was a dead letter. 200 00:18:52.300 --> 00:18:58.300 As for the National Guard, when it arrived, it did what the military does best, harass the residents. 201 00:18:58.300 --> 00:19:03.300 Working with the police it began to enforce an order for everyone to evacuate. 202 00:19:03.300 --> 00:19:10.300 As the New York Times summarized the order, no civilians in New Orleans would be allowed to carry pistols, shotguns or any other firearms. 203 00:19:10.300 --> 00:19:16.300 The National Guard allowed themselves to be videotaped going from house to house and mansion to mansion, 204 00:19:16.300 --> 00:19:21.300 knocking down doors, searching for weapons, handcuffing owners and humiliating them. 205 00:19:21.300 --> 00:19:26.300 They called these people holdouts, a phrase right out of Baghdad. 206 00:19:26.300 --> 00:19:34.300 One stormtrooper, and strikes me as a pretty good name for them, was asked whether he would shoot residents if they resisted. 207 00:19:34.300 --> 00:19:40.300 Yes, he said he would, though. It's surreal. You never expect to do this in your own country. 208 00:19:40.300 --> 00:19:48.300 I provided a look at some of the terrible failures by the government, not only failing to do what it claimed it would do, 209 00:19:48.300 --> 00:19:55.300 but actively working to prevent others from helping. The cost to human life and prosperity is incalculable. 210 00:19:55.300 --> 00:19:59.900 But one might say at least the government is generous now in preparing to spend perhaps 211 00:19:59.900 --> 00:20:05.820 $250 billion to clean up and reconstruct what was destroyed. 212 00:20:05.820 --> 00:20:09.700 But who will get this money and where will it go? 213 00:20:09.700 --> 00:20:12.220 Cynics could not be more correct. 214 00:20:12.220 --> 00:20:17.120 The first company to receive the money was our old friend Kellogg Brown and Root, a current 215 00:20:17.120 --> 00:20:22.020 client of Mr. Bush's former campaign manager and also a former head of FEMA. 216 00:20:22.020 --> 00:20:27.700 EBR is a subsidiary of Halliburton, the company formerly headed by Dick Cheney. Another winner 217 00:20:27.700 --> 00:20:32.540 is the military contractor Bechtel, whose former head is now in charge of Bush's Overseas 218 00:20:32.540 --> 00:20:37.020 Private Investment Corporation. Former Secretary of State George Shultz was once head of it 219 00:20:37.020 --> 00:20:43.980 as well. The top rebuilding priority for them, repairing government military bases in Louisiana 220 00:20:43.980 --> 00:20:44.980 and Mississippi. 221 00:20:44.980 --> 00:20:49.820 Now, if you work for one of these companies, you could do very well by this aid. As for 222 00:20:49.820 --> 00:20:53.680 For the victims, my guess is they can expect little from the monstrosity that taxes and 223 00:20:53.680 --> 00:20:58.300 controls them relentlessly on the pretext that it will protect them and care for them 224 00:20:58.300 --> 00:21:00.860 when no one else will. 225 00:21:00.860 --> 00:21:05.740 Fortunately for the people who lived in flooded areas, they did not face the crisis alone. 226 00:21:05.740 --> 00:21:09.640 The private commercial sector, along with thousands of religious charities, was there 227 00:21:09.640 --> 00:21:10.640 to help. 228 00:21:10.640 --> 00:21:14.300 Indeed, John Tierney of the New York Times was one of the few mainstream journalists 229 00:21:14.300 --> 00:21:18.060 to note that Walmart improved its image after Katrina. 230 00:21:18.060 --> 00:21:22.020 Its stores in the disaster-stricken areas still carry generators. 231 00:21:22.020 --> 00:21:26.460 Walmart trucks rode into areas immediately following the hurricane and gave away chainsaws, 232 00:21:26.460 --> 00:21:30.520 boots, sheets and clothes for shelters plus water and ice. 233 00:21:30.520 --> 00:21:35.940 It alone had prepared for emergency with its own Emergency Operations Center. 234 00:21:35.940 --> 00:21:41.260 Chris Wesley further noted that Walmart gave $20 million in cash donations, 1,500 truck 235 00:21:41.260 --> 00:21:46.320 loads of free merchandise, food for 100,000 meals and the promise of a job for every one 236 00:21:46.320 --> 00:21:48.400 and its Displaced Workers. 237 00:21:48.400 --> 00:21:53.320 After comparing FEMA's failures with Wal-Mart's successes, he concluded that government emergency 238 00:21:53.320 --> 00:21:55.320 management ought to be abolished. 239 00:21:55.320 --> 00:21:59.000 Tierney, however, drew the wrong conclusion. 240 00:21:59.000 --> 00:22:03.300 He said that the Wal-Mart CEO is, quote, the kind of leader we need to oversee the tens 241 00:22:03.300 --> 00:22:08.160 or hundreds of billions that Washington will be spending on the Gulf Coast. 242 00:22:08.160 --> 00:22:13.080 President Scott could insist on laws on low everyday prices while still leaving the areas 243 00:22:13.080 --> 00:22:17.080 was well prepared for the next disaster as Wal-Mart was for Katrina. 244 00:22:17.080 --> 00:22:27.080 In fact, if Lee Scott were given a government job, it would only be a matter of time before he became just another Michael Brown, the disgraced former FEMA head. 245 00:22:27.080 --> 00:22:37.080 This isn't a matter of character, it's a matter of the maze in which you find yourself, either with market-generated exit signs or none at all, thanks to the government. 246 00:22:37.080 --> 00:22:45.080 As Walter Block, Mark Thornton and many others have shown, it was not the storm as such that did the damage, but the failure of the government levies. 247 00:22:45.080 --> 00:22:52.080 Combined with the levies-only river management strategy of the Army Corps of Engineers, the floods were a disaster waiting to happen. 248 00:22:52.080 --> 00:22:56.080 Just imagine if the town were private like your home or your car. 249 00:22:56.080 --> 00:23:02.080 Insurance companies would have taken a huge role in risk assessment, not only charging more for higher risk, 250 00:23:32.080 --> 00:23:38.080 Government is like a bad mother who pays her children to run with scissors. 251 00:23:38.080 --> 00:23:43.080 Government ownership is even worse because there's no signaling system at all in operation. 252 00:23:43.080 --> 00:23:47.080 It is also the government that created a false sense of security for people in New Orleans, 253 00:23:47.080 --> 00:23:50.080 who were led to believe that the levees would hold and the pumps would work. 254 00:23:50.080 --> 00:23:56.080 And when the floods finally did come, they were told the government would be there to manage the crisis. 255 00:23:56.080 --> 00:24:01.080 But the government cannot manage crisis, as the response to Katrina demonstrated. 256 00:24:01.080 --> 00:24:08.080 The local government fled, the state government was dithering, and the federal government actively worked to present good things from happening. 257 00:24:08.080 --> 00:24:17.080 The thousands and millions of acts of private heroism and charity that took place after Katrina occurred despite government, not because of it. 258 00:24:17.080 --> 00:24:22.080 And yet what lessons does the political culture want us to take from this? 259 00:24:22.080 --> 00:24:29.080 The same lessons we're instructed to learn after NASA spends and spends and still can't seem to make a reliable space shuttle. 260 00:24:29.080 --> 00:24:36.080 The Federal government spends trillions to protect the country and can't fend off a handful of malcontents with an agenda. 261 00:24:36.080 --> 00:24:46.080 And so we're told the government needs to start several new wars and erect a massive new bureaucracy and put sections of the country under martial law at the slight cost of the state. 262 00:24:46.080 --> 00:24:53.080 So too Congress can allocate a trillion dollars to fix every levy, fully preventing the last catastrophe, but not the next one. 263 00:24:53.080 --> 00:25:00.080 The real problem is the same in all these cases, not insufficient resources, but public ownership and money. 264 00:25:00.080 --> 00:25:02.080 and spend more money. 265 00:25:02.080 --> 00:25:06.080 So too Congress can allocate a trillion dollars to fix every levy, 266 00:25:06.080 --> 00:25:10.080 fully preventing the last catastrophe, but not the next one. 267 00:25:10.080 --> 00:25:14.080 The real problem is the same in all these cases, not insufficient resources, 268 00:25:14.080 --> 00:25:17.080 but public ownership and management. 269 00:25:17.080 --> 00:25:23.080 Public ownership has encouraged people to adopt a negligent attitude towards even such obvious risks. 270 00:25:23.080 --> 00:25:26.080 But private developers and owners, in contrast, demand to know 271 00:25:26.080 --> 00:25:31.080 And to know, every possible scenario is a way to protect their property. 272 00:25:31.080 --> 00:25:38.080 But public owners have no stake in the outcome and lack the economic capacity to calibrate resource allocation to risk assessment. 273 00:25:38.080 --> 00:25:43.080 In other words, the government manages irresponsibly and incompetently. 274 00:25:43.080 --> 00:25:48.080 Actually it was Mr. Bush who said one of the most sensible things on September 2nd. 275 00:25:48.080 --> 00:25:54.080 If you want to help, if you're listening to this broadcast, contribute cash to the Salvation Army and the Red Cross, 276 00:25:54.080 --> 00:25:58.080 They were on the front lines providing help to people who need help. 277 00:25:58.080 --> 00:26:03.080 But it was two weeks later when his other instincts kicked in and he delivered a very different message, 278 00:26:03.080 --> 00:26:05.080 one that was deeply alarming. 279 00:26:05.080 --> 00:26:10.080 He said it is now clear that a challenge on this scale requires greater Federal authority 280 00:26:10.080 --> 00:26:13.080 and a broader role for the armed forces, 281 00:26:13.080 --> 00:26:18.080 the institution most capable of massive logistical operations on a moment's notice. 282 00:26:18.080 --> 00:26:22.080 It seemed that his beloved military was not there at a moment's notice. 283 00:26:22.080 --> 00:26:28.080 It now cites its own failures as the great excuse to expand its powers and get more money. 284 00:26:28.080 --> 00:26:33.080 So the government will spend the next several years preparing for another Katrina that will never come, 285 00:26:33.080 --> 00:26:38.080 just as it has spent the last several years preparing for another 9-11 that will never come. 286 00:26:38.080 --> 00:26:43.080 The next crisis will be something completely unexpected, and once again the government will fail. 287 00:26:43.080 --> 00:26:47.080 But we will be left with a government with some very bad additional habits, 288 00:26:47.080 --> 00:26:52.080 Marital habits, among which are declarations of martial law, mandatory evacuations, gun 289 00:26:52.080 --> 00:26:56.440 and price controls, and other totalitarian ways. 290 00:26:56.440 --> 00:27:01.040 And given that this is a Republican administration, with its own internal culture and its attachment 291 00:27:01.040 --> 00:27:05.800 to military means, we get what can only be described as the continuation of the fascist 292 00:27:05.800 --> 00:27:10.040 track, the militarization of the country under its own armed forces. 293 00:27:10.040 --> 00:27:15.160 As far as I know, this passing remark by Mr. Bush has provoked no commentary in the national 294 00:27:15.160 --> 00:27:16.960 press. 295 00:27:16.960 --> 00:27:20.460 Researchers in the organized conservative movement have displayed an appalling difference 296 00:27:20.460 --> 00:27:25.440 to the administration's priorities, with National Review consistently arguing for more spending 297 00:27:25.440 --> 00:27:30.880 and more militarization, Rush Limbaugh calling for price gougers to be strung up, and even 298 00:27:30.880 --> 00:27:35.340 a good free market friend calling for billions to rebuild New Orleans as a way of showing 299 00:27:35.340 --> 00:27:40.120 the terrorists we won't let the weather get in the way of progress. 300 00:27:40.120 --> 00:27:46.140 On the last point, I kid you not, conservatives have been especially bad on tolerating egregious 301 00:27:46.140 --> 00:27:52.660 We need to reflect on what it means to have the military take over in the event of crisis. 302 00:27:52.660 --> 00:27:57.140 What kind of ideology promotes such things, and looks the other way when it happens? 303 00:27:57.140 --> 00:28:01.980 I think I know, and it serves as a reminder that not all threats to freedom come from 304 00:28:01.980 --> 00:28:04.020 the left. 305 00:28:04.020 --> 00:28:08.180 A clue comes from the neo-Nazi novel called the Turner Diaries, sometimes cited as the 306 00:28:08.180 --> 00:28:13.060 motivating force for the bombing of the Oklahoma Federal Building. 307 00:28:13.060 --> 00:28:19.260 The book ends in what the author regards as a great political utopia. After a world war 308 00:28:19.260 --> 00:28:24.660 that exterminates all non-whites, a military regime takes over the United States and centrally 309 00:28:24.660 --> 00:28:29.980 plans the economy under permanent martial law. All food and water is distributed on 310 00:28:29.980 --> 00:28:34.940 military trucks, all production takes place on a planned basis, and the merchant class 311 00:28:34.940 --> 00:28:41.980 is required to obey or be shot. The government also places flower boxes under everyone's 312 00:28:41.980 --> 00:28:55.980 The author describes his race-based national socialism as if it were a system with an inherent appeal to the reader and perhaps there are people economically ignorant enough and full of enough loathing for humanity and freedom to regard it as attractive. 313 00:28:55.980 --> 00:29:05.980 I do know that in our own times there are people waiting in the wings who long for power and are drawn to the ideal of a militarized society and a centrally managed economy. 314 00:29:05.980 --> 00:29:15.980 Some call themselves conservatives, and they are every bit as much a threat to civilization as those with the same ideas who call themselves liberals. 315 00:29:15.980 --> 00:29:18.980 But nevertheless, let me end on a note of optimism. 316 00:29:18.980 --> 00:29:21.980 The first is implied in all that I said above. 317 00:29:21.980 --> 00:29:25.980 The government actually cannot do what it promises to do. 318 00:29:25.980 --> 00:29:28.980 And there is a way in which we can only be thankful for that. 319 00:29:28.980 --> 00:29:31.980 It cannot succeed in managing a central plan. 320 00:29:31.980 --> 00:29:34.980 Its plans will always fail. 321 00:29:34.980 --> 00:29:43.980 The government tries to use its failures as an excuse for more power, but with every failure comes a substantial degree of public humiliation for the public sector. 322 00:29:43.980 --> 00:29:49.980 And that humiliation can provide a business a basis for the undoing of government authority. 323 00:29:49.980 --> 00:29:53.980 Some people say that a loss of government authority will mean a breakdown of civilization. 324 00:29:53.980 --> 00:30:01.980 Actually, it will create the preconditions for the reestablishment of civilization and in a state of freedom that can happen very quickly. 325 00:30:01.980 --> 00:30:11.980 The aftermath of Katrina illustrated in a million individual acts of charity and enterprise that people can manage their affairs even amidst chaos. 326 00:30:11.980 --> 00:30:17.980 The calamity following Katrina was an egregious display, one that gave the federal government a black eye. 327 00:30:17.980 --> 00:30:29.980 The Democrats will continue to use it to harm the Republicans, which is fine by me, but it is not just Mr. Bush that is suffering, but the whole apparatus of central planning by decree from above. 328 00:30:29.980 --> 00:30:36.700 A government that cannot manage a crisis should not be trusted to manage anything at all. 329 00:30:36.700 --> 00:30:41.220 Thanks to Katrina and its dreadful aftermath, I think it's fair to say that the age of 330 00:30:41.220 --> 00:30:45.380 not trusting government has returned with a vengeance. 331 00:30:45.380 --> 00:30:49.860 It took decades for the rot underneath the Soviet apparatus of central planning to give 332 00:30:49.860 --> 00:30:54.660 way, but eventually the implausibility of the entire project was no longer possible 333 00:30:54.660 --> 00:30:55.660 to deny. 334 00:30:55.660 --> 00:31:00.260 It gave way under an intellectual reaction against the whole of socialism. 335 00:31:00.260 --> 00:31:04.980 We're seeing something like that take place today as government fails in Iraq, in New 336 00:31:04.980 --> 00:31:09.380 Orleans and in every place around the country and the world where it causes problems and 337 00:31:09.380 --> 00:31:12.100 creates no solutions. 338 00:31:12.100 --> 00:31:15.460 The age of confident central planning is behind us. 339 00:31:15.460 --> 00:31:18.820 Right now, the state is just trying to keep its head above water. 340 00:31:18.820 --> 00:31:24.780 If freedom is to have a future, the time will come when it will sink to an ignoble end and 341 00:31:24.780 --> 00:31:30.140 We will wonder just how we ever believed in this myth called government crisis management. 342 00:31:30.140 --> 00:31:34.100 The advocates of freedom and the partisans of private enterprise will be there with the 343 00:31:34.100 --> 00:31:39.500 intellectual equivalent of flotillas, barges, buses, helicopters and the whole apparatus 344 00:31:39.500 --> 00:31:44.020 necessary to rescue liberty from every attempt to kill it. 345 00:31:44.020 --> 00:31:48.700 And when our city on the hill comes to be, it will be privately built to withstand any 346 00:31:48.700 --> 00:31:50.700 and the Money Flood. Thank you.