Maybe Obama Doesn't Believe in Government, Either

In the aftermath of Hurricane Sandy, a storm that not only washed away New York and New Jersey neighborhoods but also dumped about three feet of snow where I live, cutting power lines and wreaking general havoc, I have come to a conclusion regarding the response of the U.S. Government and specifically the Federal Emergency Management Agency (FEMA): Barack Obama just does not have enough faith in government.

How would I draw that conclusion? Following the disaster in New Orleans from Hurricane Katrina (which was a Category 3 storm), Krugman said that the federal government's response was bad because the Bush administration was filled with people who don't believe in government:

... 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?

 So, Krugman had an explanation as to why FEMA was incompetent in New Orleans. However, now that the Obama administration's response to the aftermath of Hurricane Sandy (a Category 1 that quickly weakened into a tropical storm) has been exposed as utterly inept, so far there is silence from the Great Man at Princeton. After all, there is no ideological barrier keeping FEMA from being the Super Agency Krugman has claimed it should be (and allegedly was under Bill Clinton), so why the failure?

While it should be logical to an economist (except Krugman, who is not an economist, but rather a political operative who can do math), centralized government planning in which agents from Washington dictate policy to people who actually have more information is a loser from the beginning. Furthermore, the so-called price-gouging laws are responsible not only for horrific shortages but also discourage entrepreneurs from bringing supplies into the stricken areas, which means the recovery takes longer.

(Krugman is a Keynesian, and Keynesians really don't worry about price controls since everyone knows that prices really don't matter, except when they can be put into indices so that Keynesians can put them on the vertical axis of the Aggregate Demand--Aggregate Supply graphs.)

So, we can say that governments at all levels are involved in the aftermath of the storm, with FEMA taking the lead. And we can see how this is working. Not very well. I guess Obama just doesn't believe enough in the power of the State to work miracles. He needs to make a call to Princeton -- if the lines are not still down.

Plans and Economic Reality

For all of the talk from Keynesians that their goal is to help the private economy "gain traction," Keynesianism ultimately is about central government planning, be it monetary planning, government spending, or regulatory mandates. The ultimate mantra of the Keynesian is this: Statism equals prosperity.

Thus it is that in the wake of the Obama debate debacle, Paul Krugman has decided to go to war...over dueling medical plans, and his argument is this: Obama has a better "plan" than does Romney, and if Romney says otherwise, he is lying. One has to understand that what Krugman is arguing is that these plans are going to perform exactly as they are written, and that requires a huge stretch of the imagination.

When one peels away the rhetoric about the dueling "plans," one finds that the central assumption is that government central planning works. In Wonderland, we are supposed to believe that the Obama plan actually will result in expanded coverage at lower costs? Why? Because Obama says so. With the Romney plan, things will not turn out well? Why? Because Krugman says so.

Never before in economic history has government planning done what Krugman claims ObamaCare will do: create more need-fulfilling services while simultaneously using fewer per capita resources. That is the heart of the debate, not which candidate has the better central plan.

Krugman can throw out all of the ex ante projections he wants, but the point is that by expanding the regulatory and confiscatory state, and employing an army of bureaucrats to see that all of the jillions of rules are followed to the letter, ObamaCare -- or RomneyCare II, for that matter -- ultimately will result in higher real costs of medical care. And as people find that the heart of ObamaCare's "cost-cutting" measures really means denial of medical choices for those who are not politically-connected, the ensuing "crisis" will bring demands for even more government control.

The regulatory state is quite predictable in its outcomes, yet people continually go to the same dry well because that is what the Progressives who essentially control all of our major institutions claim will "solve" the latest set of problems. Whether the OC or RC plans are implemented, in the end we will find that central planning from Washington will mean deterioration of medical services.

As I see it, the real issue is not the red herring of whether Mitt Romney told the Truth According to Paul Krugman. No, the real issue is that Washington is embarking on a journey that will have outcomes that are much different -- and much worse -- than what is being promised. Paul Krugman is politically-connected and he is wealthy; he won't have to worry about being denied care.

But those people who are not in Krugman's privileged category are going to find that not only will the government actively restrict their medical care, it will do it in an iron-fisted way. Central planning is central planning, and all of the rhetoric in the world cannot change that hard and sad fact.

Tuscaloosa just needs to "believe in government"

In the aftermath of natural disasters, the standard Paul Krugman line is that only government can fix the problems, and that if one just "believes in government" with all one's heart, soul, and mind, then things will go well. After Katrina, Krugman claimed that the reason that FEMA's response to the disaster in New Orleans

...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?

Or, as Krugman wrote in that same column, had the Bushies allegedly loved government, then FEMA would have had a magnificent response and no doubt everything in the Gulf post-Katrina would have recovered more quickly. (In other words, Krugman actually wants us to believe that federal government agents given near-absolute authority in New Orleans somehow eschewed their power and decided to pursue an ideological line of "limited government." Yeah, we run into those kinds of government agents all the time, agents who are deathly afraid of abusing their powers.

In other words, according to Krugman, the powerful, top-down government approach that is fashioned by bureaucrats who believe in what they are doing and directed by Liberal Democrats provides the best response to disaster. Well, we have a laboratory in the aftermath of tornadoes in Tuscaloosa, Alabama, and Joplin Missouri, and the results definitely are contra-Krugman.

David T. Beito and Daniel J. Smith have looked not only at the speed of post-tornado recovery in those two cities, but also the governmental action behind it. Tuscaloosa is using the tornado to engage in top-down government planning, and also is waiting for more FEMA money. (And everyone knows that since Barack Obama loves government, FEMA will be Johnny-on-the-spot.)

Joplin, on the other hand, is cutting back zoning enforcement and permitting businesses to rebuild, which definitely is an anti-Krugman approach and most likely would earn the Great Man's contempt. So how are things going? Beito and Smith write:

In Joplin, eight of 10 affected businesses have reopened, according to the city's Chamber of Commerce, while less than half in Tuscaloosa have even applied for building permits, according to city data we reviewed. Walgreens revived its Joplin store in what it calls a "record-setting" three months. In Tuscaloosa, a destroyed CVS still festers, undemolished. Large swaths of Tuscaloosa's main commercial thoroughfares remain vacant lots, and several destroyed businesses have decided to reopen elsewhere, in neighboring Northport.

The reason for Joplin's successes and Tuscaloosa's shortcomings? In Tuscaloosa, officials sought to remake the urban landscape top-down, imposing a redevelopment plan on businesses. Joplin took a bottom-up approach, allowing businesses to take the lead in recovery.

 Keep in mind that while much of Alabama tends to vote Republican, Tuscaloosa is a university town that is full of political liberals and, as such, believers in government planning. The planners also are spouting the politically-correct language and ideals. Write the authors:

The Alabama city's recovery plan, "Tuscaloosa Forward," is indeed state-of-the-art urban planning—and that's the crux of the problem. It sets out to "courageously create a showpiece" of "unique neighborhoods that are healthy, safe, accessible, connected, and sustainable," all anchored by "village centers" for shopping (in a local economy that struggles to sustain current shopping centers). Another goal is to "preserve neighborhood character" from a "disproportionate ratio of renters to owners." The plan never mentions protecting property rights.

Joplin, on the other hand, features an:

official plan (that) not only makes property rights a priority but clocks in at only 21 pages, compared with Tuscaloosa's 128. Joplin's plan also relied heavily on input from businesses (including through a Citizen's Advisory Recovery Team) instead of Tuscaloosa's reliance on outside consulting firms. "We need to say to our businesses, community, and to our citizens, 'If you guys want to rebuild your houses, we'll do everything we can to make it happen,'" said Joplin City Council member William Scearce in an interview.

Now, if one only read the columns of Paul Krugman, one would think that Joplin's recovery would be lagging and Tuscaloosa would be booming. Yet, all of the things that leftists like Krugman claim are needed to make an economy recover, don't seem to be working very well:

Instead of encouraging businesses to rebuild as quickly as possible, Tuscaloosa enforced restrictive zoning rules and building codes that raised costs—prohibitively, in some cases. John Carney, owner of Express Oil Change, which was annihilated by the storm, estimates that the city's delays and regulation will cost him nearly $100,000. And trying to follow the rules often yielded mountains of red tape, as the city rejected businesses' proposals one after another.

"It's just been a hodgepodge," says Mr. Carney. "We've gotten so many mixed signals from the get go. The plans have been ever-changing." Boulevard Salon owner Tommy Metrock, one of the few business owners to rebuild on Tuscaloosa's main thoroughfare, McFarland Boulevard, says the restrictions created "chaos" as people put their livelihoods on hold while the city planned.

There is one other possibility, however. Perhaps that the influence of other Republicans in Alabama has been such that the city planners in Tuscaloosa simply don't believe ENOUGH in government to work magic. I'm sure that Krugman would come up with a similar explanation, or maybe he will write a column to say that businesses have turned Joplin into a hellhole and government, by accidentally creating "wide-open spaces" in Tuscaloosa, has turned the city into paradise. Stay tuned.