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.
In the wake of two major hurricanes and the calls for federal intervention, we repost Vedran Vuk's classic 2006 article that detailed how by "doing its job," FEMA blocked economic recovery in New Orleans after the Hurricane Katrina disaster.
Presented at the Mises Circle in Manhattan: The Fed and War Finance (16 September 2006, University Club, New York, NY).
Let's settle the scores; the politicians and bureaucrats win since they claim success based on programs implemented, the children lose due to additional years in state institutions, the teachers and their unions win as more money is pumped into the sinking barge, and the taxpayer — William Graham Sumner's forgotten man — continues to pay the bill year after year.
We can have no confidence that the Stiglitz model captures the essential aspects of real world economizing that it purports to. We therefore can have no confidence in any belief that rests upon this or similar theories that government has a proper role to play in increasing economic efficiency or social welfare by use of taxes, subsidies, and transfer payments.
Rich men exist today, but more frequently than not they owe their fortunes directly or indirectly to the state.
Delivered at the Mises Institute on July 6, 2006.
There is no such thing as perfect neutrality in the world of economics. Information flows must be rationed somehow. Do we want it rationed by the market price system, or the likes of the US Senate? That is what the future of this technical debate is all about.
