Katrina and Federalism--Posner's Response to Comments

Several comments echo Becker's attribution of partial responsibility for the casualties caused by Hurricane Katrina to the creation of a "culture of dependency" by modern social welfare legislation. That such legislation can create a culture of dependency is true, and is one of the reasons behind President Clinton's welfare reform--a measure that conservatives applaud; I certainly do. But that it was a factor in the botched evacuation and resulting deaths in New Orleans is speculative. Many of the casualties were to residents of hospitals and nursing homes; such casualties were not attributable to a culture of dependency. Nor, it seems to me, were the casualties to people who did not own cars, unless one believes that there would be no poor people if there were no social safety net. That seems unlikely. The fact that the social safety net is weaker in the United States than it is in Western Europe is one of the reasons that the poverty rate is higher in the United States than it is there. It is also one of the reasons that the United States has a more dynamic economy and lower unemployment, and is more attractive to immmigrants. But one must take the bad with the good, and the bad of a society such as ours in which there is real economic risk is a higher rate of poverty. Another frequent comment was that there is no need for a federal role even in disasters that spill across state lines because, in the absence of such a role, states would form compacts to cooperate in providing emergency assistance; they would stock supplies, create a standby command staff, etc. Suppose all the states joined the compact; then we are speaking of another federal government, in effect, so what would have been gained? The nation experimented in the Articles of Confederation with government by agreement among the states, and the experiment failed. In economic terms, the transaction costs of contracts between states appear to be very high, judging from the infrequency of such contracts. I am curious whether these commenters think there is any role for a federal government. What is a legitimate concern is the danger, if any level of government undertakes to provide emergency assistance, of subsidizing risky behavior, such as building in flood plains. That danger could be minimized by requiring that all such assistance be repaid by the recipient, unless indigent. This would encourage nonpoor people to buy insurance, avoid building in flood plains, and take other measures to protect themselves from catastrophic risks. More broadly, I believe that government assistance should always be based on need; the fact that a rich person sustains damage to his home in a catastrophic flood rather than in a flood caused by a stopped-up toilet is no reason for the government to compensate him.

Comments

[Wes]

More broadly, I believe that government assistance should always be based on need;Right. And everyone should pay the full cost of attending public school unless they are poor enough to qualify for tuition assistance. And everyone should pay the full cost of each use of public roads unless they are poor enough to qualify for road toll assistance.When the government provides certain basic services for free it sets a tone. It sets the tone that certain things are important enough that everyone should have access to them regardless of who they are or what their circumstances are. More broadly, it sets the tone that the United States is a community where people care about each other and help each other even when it is not purely in their own self interest.If some rich person can't get their Escalade started and needs to take the public bus to evacuate before a hurricane, I would prefer that the United States send the message that it cares about the safety of all US citizens and give the rich person a free bus ride.On the other hand, unless the US government is going to build luxury beach front vacation homes for every poor person who loses their home in a hurricane, I see no need to for the US government to (re)build luxury beach front vacation homes for rich people.I don't mind if rich people get the same government assistance that poor people get but I do mind if rich people get government assistance that poor people are not able to get. The right solution is not to make government assistance need based but instead to make it equally available to everyone.

[Michelle]

not really

[Michelle]

not really, there is a 'spill over effect' from people who are not self-sufficient to hospitals a la mental ward.

also, are nursing home residents not extremely dependent?

[Jack Sprat]

POSNER: Suppose all the states joined the compact; then we are speaking of another federal government, in effect, so what would have been gained?

Cleverly, but irrelevantly, the above quote defeats the point of a regional compact.

Regional compacts work when the only states involved are those affected by the relevant problem. The transaction costs that come into play in coordinating action between all 50 states would not be an issue, because all 50 states would not be involved. Involving all 50 states would indeed reproduce the Articles of Confederation, but that would not be a regional compact: it would be a national compact.

Part of the appeal of a regional compact is the lowered transaction costs: if the only states affected are States A, B, and C, taking a bill to Congress subjects it to being loaded down with pork from States H, J, and K. Then you end up with our current energy bill, instead of Governor Pataki's nuclear power compact. Are we supposed to believe that our current engery policy is the most efficient solution to our energy dependence problems?

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[Rob Stewart]

Posner argues with an uncharacteristic level of certitude that an increase of skilled workers will lower wages for individuals in the specific field. I wouldn't be so "sure" about this. H1 Visa's require "sponsorship" by individual companies, and a painful process of paperwork, regulations, and government ineptitude. Many times, permanent sponsorship can only be gained when one has worked for the same company for an extended period of time, so the worker becomes an indentured servant of sort incapable of bargaining for better wages. The paperwork and regulations donít allow for a smooth movement of workers and a traditional market-clearing price. Wages in fields that cater to highly skilled foreigners are lowered by these ìtransaction costsî, and an elimination of these costs as suggested by Posner would likely increase these wages, not decrease them as Posner suggests. As an American PhD working in one of these fields, I welcome Posnerís suggestion because I believe that my wages would go up.

[Reverend Bayes]

Has anyone else noticed the uncanny resemblance between Becker and Senator Palpatine from Star Wars? Perhaps I am the only one....

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