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Living on the Reservation

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09/26/2006William L. Anderson

During a cross-country trip I took in early June, I drove past a number of Indian reservations in Arizona and New Mexico, and I must say that the sight was not exactly uplifting. I could see hundreds of tumble-down shacks and old trailers located on hillsides, and none of them were inviting places to live. It was obvious then that I was seeing something akin to a Third World scene with hundreds — perhaps thousands — of people living in great poverty.

American Indian poverty is not something on our "radar" for a couple of reasons. First, reservations are located in remote places and the largest ones are nowhere near major metropolitan areas. Second, because most Indians do not venture far from their reservations; the rest of us rarely come into personal contact with them.

Writes Peter Carlson:

Half a millennium after Columbus misnamed them, American Indians are the poorest people in the United States.

The country's 2.1 million Indians, about 400,000 of whom live on reservations, have the highest rates of poverty, unemployment and disease of any ethnic group in America. That might surprise Americans who have consumed countless cheery feature stories about Indians making big bucks on casino gambling.

What I saw from my car window in the arid highlands of the American West did nothing to dispel what Carlson wrote. There was no doubt that I was seeing real poverty, and there seemed to be few sources of commerce in the surrounding area. It was obvious that the majority of people who lived in these hovels and broken-down trailers did not work and had no potential sources of income aside from informal tasks and government checks.

In the early 1980s, then-US Secretary of the Interior James Watt commented that one did not have to go to the USSR or Eastern Europe to discover the failures of socialism. Those failures, he said, were evident on the reservations, which his department oversaw. Not surprisingly, the comments drew partisan attacks, and the press dismissed Watt as making "bigoted" comments.

(Watt apparently was guilty of making a "gaffe," which can be described as uttering an unpopular truth. Political figures, as you know, do not like to make "gaffes.")

While we tend to think of the reservation system as applying only to American Indians, in truth, it is the system that is used in an attempt to deal with nearly all poor Americans, and nowhere were the failures of the reservation system more apparent than last year's Hurricane Katrina debacle in New Orleans. Indeed, we can say that the aftermath of the disaster (not to mention the flooding, which came from the breakage of government levees) was a massive government failure — but not the failure that is commonly associated with Katrina.

When most people speak of Katrina and government failure, they mean the supposed failure of the Federal Emergency Management Agency (FEMA) to take care of everyone affected immediately after the storm. Of course, as has been emphasized on this site, the idea that somehow FEMA could immediately set things right — or ever set things right — was a ludicrous idea in the first place.

Yet, as I noted last year and emphasize again and again, Katrina did not expose American poverty; indeed, it exposed the folly of the reservation system. Let me explain.

When we speak of Indian reservations, we are dealing with areas of land set aside where American Indians live, areas that supposedly have "self-government," but are ultimately subject to the Bureau of Indian Affairs and the Indian Health Service of the US Department of the Interior. Because of their location and because of the fact that they are the ultimate welfare state, Indian reservations tend to be places where people simply exist on whatever subsidies the government provides, and little else. As Wikipedia notes:

Some Indian reservations offer a quality of life that's among the poorest to be found in the United States. Shannon County, South Dakota, home of the Pine Ridge Indian Reservation, is routinely described as one of the poorest counties in the nation.

While Pine Ridge is located far from any major metropolitan area, one could be describing inner-city Baltimore, Philadelphia, or New Orleans. Instead of the Bureau of Indian Affairs, the residents of these metropolitan areas deal with Medicaid, the US Department of Health and Human Services, the US Department of Transportation, the Drug Enforcement Agency, the various Housing Authorities, and other alphabet soup entities which make many of the choices that govern the lives of those who live in these areas.

People who live in these urban reservations, and who depend upon the state for nearly all of their personal and financial support, are the ones who are having the most difficult time readjusting to the post-storm atmosphere. Granted, the slow recovery is not simply limited to people who might have lived in the hellish projects. Homeowners or people who lived in single-family houses in poorer sections of the New Orleans also find themselves waiting for Godot, or at least for someone from FEMA to write a check and tell them what to do next.

While we hear of delays, long lines, and all of the other characteristics of socialism being omnipresent in New Orleans, in nearby Mississippi, entrepreneurs have used the storm's aftermath to rebuild and to go in new directions. For example:

Even more inspiring has been the explosion of interest in Katrina Cottages… The Katrina Cottage effort is producing an expanding family of designs for appealing, storm-worthy houses that compromise nothing but square footage in the effort to create homes worthy of long-term roles in neighborhood redevelopment. The first designs for Katrina Cottages came out of efforts to create design alternatives for FEMA trailers. The plans immediately captured the imaginations of citizens and building industry leaders (see www.katrinacottages.com). Now Katrina Cottages are claiming a broadening niche in the private-sector housing market and creating more alternatives for Mississippi home shoppers.

Lowe's has just announced plans to offer four Katrina Cottage designs as kits to property owners in the storm zone. Home Front, in Florida, is offering a growing list of models as panelized cottages. And the New Urban Guild has certified several manufactured housing companies to produce Katrina Cottages likely to set new standards for manufactured housing.

As one can see, a real emergency also has unleashed some creative powers of designers and entrepreneurs. (This is not a rendition of the "Broken Window Fallacy," but rather recognition that entrepreneurs discern human needs and act upon them.) Compare the actions of private businesses, from Lowe's, Home Depot, and Wal-Mart, to the political entrepreneurship demonstrated by FEMA, as well as political operatives who used the tragedy to boost their own fortunes.

For example, Paul Krugman, instead of correctly interpreting the Katrina aftermath as a failure of socialism, declared that the reason FEMA failed to play the Superman role was that conservatives had failed to adequately uphold the greatness of the state:

But the federal government's lethal ineptitude wasn't just a consequence of Mr. Bush's personal inadequacy; it was a consequence of ideological hostility to the very idea of using government to serve the public good. For 25 years the right has been denigrating the public sector, telling us that government is always the problem, not the solution. Why should we be surprised that when we needed a government solution, it wasn't forthcoming?

Lest anyone believe that Krugman simply was expressing frustration at the obvious ineptitude that FEMA officials demonstrated, he goes on:

Does anyone remember the fight over federalizing airport security? Even after 9/11, the administration and conservative members of Congress tried to keep airport security in the hands of private companies. They were more worried about adding federal employees than about closing a deadly hole in national security.

Of course, the attempt to keep airport security private wasn't just about philosophy; it was also an attempt to protect private interests. But that's not really a contradiction. Ideological cynicism about government easily morphs into a readiness to treat government spending as a way to reward your friends. After all, if you don't believe government can do any good, why not?

The assumption here is that the 9/11 hijackings resulted from the failure of private enterprise. Now, one could excuse Krugman had he made those comments on September 12, 2001. After all, one of his employers, the New York Times, had editorialized in favor of having a group of "well-trained federal workers" providing airline security. However, he wrote those words almost four years after the attacks, after the 9/11 Commission had catalogued failures of various government agencies — and after a number of stories that revealed the many shortcomings of the Transportation Safety Administration. It is one thing to write hopefully about the "potential" of the TSA before the organization is formed; it is quite another to whitewash the failures of the TSA and assume that it is a morally superior organization simply because it is an arm of the state.

Likewise, it is one thing to express horror at the human suffering in the aftermath of Katrina; it is quite another to declare that the suffering occurred because some people have been critical of the state.

(And, for the record, the Bush Administration, with its nearly-unprecedented increase in federal spending, hardly qualifies as an "anti-government" administration. From "faith-based initiatives" to the expansion of the federal criminal code, the Bush Administration seems determined to make the Clinton Administration look like a collection of anarchists.)

Indeed, as we reflect upon the failures of government in the Katrina disaster, we are reminded by Lew Rockwell that this truly was a massive government failure, and supposed "conservative anti-government" ideology had nothing to do with the failure:

Mother Nature can be cruel, but even at her worst, she is no match for government. It was the glorified public sector, the one we are always told is protecting us, that is responsible for this. And though our public servants and a sycophantic media will do their darn best to present this calamity as an act of nature, it was not and is not. Katrina came and went with far less damage than anyone expected. It was the failure of the public infrastructure and the response to it that brought down civilization.

I would add that the failure of government after the levees broke was not that it failed to provide the amenities of the welfare state, as Krugman and others contend. Instead, the human tragedy that produced the Lord of the Flies atmosphere in New Orleans was due to the fact that government had turned much of the Crescent City into an urban reservation via its welfare system, and when those who depended heavily upon that system for their sustenance found themselves on their own, they had no idea what to do or how to do it.


William L. Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

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