In Jim Cook's Archive



After Hurricane Katrina devastated New Orleans, government incompetence at every level was plain to see. There seemed to be no end to government bungling. Despite this show of ineptitude, people are now clamoring for the government to rebuild New Orleans and save the city. Already $60 billion in aid has been authorized. An excellent article by Richard Ebeling sums up what’s coming in the Southern city. “Another Disaster in the Making: Government Reconstruction of New Orleans.”

Mr. Ebeling explains, “Invariably, the twisted hand of politics will be at work in determining how and for what those mountains of tax dollars will be spent…..The land of Huey Long will once again show that ‘friendship’ and ‘good old boy’ connections can sure mean a lot.

“At the same time, ideological and racial pandering undoubtedly will have its place at the broad table of government spending. Reconstruction proposals will abound with references to environmental awareness and minority-group sensitivity in deciding where, what, and how to rebuild.”

Mr. Ebeling continues, “Neither politicians and bureaucrats nor their consulting ‘experts’ have the knowledge, wisdom, or ability to direct the affairs of men better than can be done through the free interplay of market processes….. If the future of New Orleans were left to the free market, it would be both the returning residents and all the other citizens of the country who would decide, through their work, saving, and investment choices, what shape any new city should take.

Mr. Ebeling argues, “These individual decisions would set to work the creative and industrious energies of tens of thousands of people across the land, who would be motivated to act with as much wisdom and judgment as they could muster, since each person would be investing in his own financial future.”

He quotes Simon Newcomb, an early American economist, that individual judgments “will be sure to take into account a great many small but necessary details which those who have nothing at stake might easily overlook.’ Why? Because ‘nothing sharpens the faculties and dispels prejudice as effectively as self-interest, and no one will judge so well of an enterprise as he whose financial interests are staked upon it.”

Mr. Ebeling adds, “Politicians and bureaucrats are spending other people’s money collected through the tax system. Their interests diverge from those of the taxpayers who are plundered to finance such a vast ‘public works’ project as the reconstruction of New Orleans. The waste and corruption that follow are part of the inescapable ‘costs’ of the business of redistributive politics…..How much better to apply the knowledge and abilities of so many through their free choices rather than to limit the possibilities to the handful of political puppet masters in Washington, D.C., and Baton Rouge!”

Richard M. Ebeling is president of The Foundation For Economic Education. His economic arguments are well taken. If we added up the taxes paid in a lifetime by the thirty to forty thousand people who read this letter, it would be a small fraction of what the government will throw at New Orleans. They will waste more in Louisiana than all of us will ever pay in taxes. How much better if we could voluntarily assist through private charity and investment. New Orleans may never recover unless private resources are fully employed above and beyond the dubious results of government planning. If the city does recover fully, it will be despite the government’s help.

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