Wealth, Poverty, and Blithering Idiots

by Bill Bonner
Friday, September 9, 2005

Politicians and bureaucrats are being wrongly blamed for the New Orleans debacle.

"When government fails," is also the headline of The Economist's latest piece on the subject. So great was the failure of government, according to The Economist, that it has resulted in, "The shaming of America."

French citizens thought their government should have mounted its own rescue operation - pulling U.S. citizens out by helicopter as it had airlifted out French nationals during recent insurrections and civil wars in Africa.

British papers are appalled; they thought America was a civilized place.

Cuba offered disaster relief. So did Iran, and Honduras, the poorest country in Latin America.

The head of FEMA - a Bush appointee - was described by Maureen Dowd, who ought to know one when she sees one, as a 'blithering idiot.' The Economist suggests -attributing it to 'Bush supporters' - that New Orleans Mayor Nagin, who is black, " proved more adept at berating the federal government than at implementing the city's pre-prepared emergency plan." Andof course, Bush himself has been portrayed as lackadaisical, incompetent, uncaring and stupid. The debate is about which officials - federal, state or local - are the most incompetent.

Here, uncharacteristically and quixotically, we rush to defend our public officials as we would rush to the aid of drunk trying to find his car keys.

First, we begin our defense with a long list of admissions. We do not dispute the basic facts. Yes, all of the named - and many more never mentioned -officials are numbskulls. We wouldn't trust any of them to drain our bathtubs, let alone rescue a city from floodwaters.

Also, we admit that they could have made a better show of it.

In today's International Herald Tribune, Simon Winchester compared the response of today's politicians to those 100 years ago.

On April 18, 1906, 400,000 people were in San Francisco - including one of the world's greatest opera stars - Enrico Caruso - and one of its greatest actors - John Barrymore. At 5:12 AM an earthquake struck the city. Buildings crumbled. Gas lines broke. Electric lines fell. In moments, not only was the city in ruins...it was ablaze.

But it took only moments, too, for the people of San Francisco and the nation to get themselves in gear. Just 153 minutes after the quakes began, soldiers arrived in the city, with bayonets fixed, and presented themselves to the mayor, ready for duty.

"The mayor, who had previously been little more than a puppet of the city's political machine, ordered the troops to shoot any looters, demanded military dynamite and sappers to clear firebreaks, and requisitioned boats to the Oakland telegraphs office to put the word out over the wires: 'San Francisco in ruins...our city needs help.'"

"America read those wires and dropped everything...

"By 4AM on April 19th, William Taft, President Theodore Roosevelt's secretary of war, ordered rescue trains to begin pounding toward the Rockies; one of them, assembled in Virginia, was the longest hospital train every assembled.

"Millions of rations were sped in to the city from Oregon and the Dakotas; within a week virtually every military tent in the Army quartermaster general's stock was pitched in San Francisco; and within three weeks some 10 percent of America's standing army was on hand to help the police and firefighters..."

The comparison is damning, we admit it. The New Orleans rescue operation could have been handled by the Three Stooges; it would have been smoother.

Still, "without a theory, the facts are silent," as Friedrich Hayek used to say. And the theory that holds that our Moes, Larrys and Curlys in public office are responsible for the debacle on the bayous is misleading.

And here we would like to call our star witness, the media darling Thomas L. Friedman, not so much because he helps us make our case, but simply because we would like to make fun of him.

We had counted on him for an absurd opinion; he does not disappoint us. In today's column, Friedman blames our old friend Grover Norquist for the whole mess. Grover likes to say that the conservative agenda ought to be to reduce the size of government to the point where, "we can drown it in the bathtub." Humph! And ah ha! says Friedman, as if he had found the murder weapon with fingerprints on it. Now we see the consequences of George W. Bush's conservative philosophy: Big government was not there to help people when they really needed it. Typically, Friedman has found the theme that most appeals to the lunkhead masses.

The failure, columnists and foreign governments complain, is not merely that officials bungled the job; of course, they bungled the job. The criticism is deeper than that. It is that America not only fails to protect its poor people, it also fails to lift them up out of poverty so they can protect themselves.

Here too, we concede the basic points of the argument. In fact, we have made this argument many times ourselves. The supply-side revolution was a fraud. Hourly wages have gone nowhere since 1971. The average man earns less per hour today than he did in the Nixon administration. The number of people living, officially, in poverty has increased.

It is also true that American society has congealed between the San Francisco earthquake and the New Orleans flood. Now, there are sub-communities of poor, shiftless, almost helpless people at the bottom in major cities throughout the country. It is harder for these people to leave one class and move up to another than it used to be. According to a recent study, America and Britain have the two most socially static economies in the developed world.

When you go into the houses of these poor people you don't find proper dinner settings or books with the words of Aristotle underlined. What you find are people with disordered lives and lifestyles more similar to those of Kinshasa or Port au Prince than the Cincinnati suburbs. Their babies are much more likely to die as infants than are mainstream American children; their young men are more likely to die in violence (statistically, it is still safer for a young black man to serve in Iraq than to live in Washington D.C.) and their old people are likely to need public assistance.

All of that is true.

It is also true that politicians and bureaucrats have not only failed to do anything about it, they have actually made the situation worse by targeting tax cuts to the rich, failing to put in place adequate public health and educational systems, and so forth. We not only concede that point, we embellish it, adding that even their efforts to alleviate poverty have increased it.

Friedman, Brooks and other critics maintain that something must be done. But here is where we part company and make our stand against them. What would they ask be done? More of what has been done for the last half century? Who do they expect to do it? The same incompetents who failed to deliver New Orleans from its ordeal, and who have failed to lift the poor out of misery - federal, state, and local officials?

The government needs to do more, they say. Or, as James Galbraith put it, the government, "must be big, demanding, ambitious, and expensive."

Here, we object.

All governments of the United States - from the beginning of the imperial period during the reign of Theodore Roosevelt to that of George W. Bush - have been big, demanding, ambitious and expensive...some more than others, of course. The federal government has gotten bigger and more ambitious almost every year. In fact, it grew bigger, faster under the 'conservative' George W. Bush than it did under the 'liberal' William J. Clinton.

It's not that local officials especially incompetent or corrupt in 2005; officials have always been corrupt and incompetent, especially in Louisiana, where voters appreciate it.

American society is not particularly evil or uncaring, as the European press alleges. The U.S. government announced an imperial War on Poverty nearly 40 years ago. It engaged the enemy in close fighting from Watts to Anacostia. It lost fair and square. If there were a lot of poor people in New Orleans, it wasn't for lack of spending or effort. It is because there are a lot of people who like being poor; it is easier and more agreeable to many than a disciplined work life.

In other words, it was not for lack of a big, expensive and ambitious government that New Orleans sank. Government is far bigger and far more expensive under the second Bush than it was under the first Roosevelt. Yet, government responded in an exemplary manner to the San Francisco earthquake and in an inept way to the New Orleans flood.

No, dear reader, it is not right to blame the politicians and bureaucrats. But thank God there weren't more of them.

Bill Bonner
The Daily Reckoning

Editor's Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

(Press "back" button to return to home page)