My greatest frustration in life is having to deal endlessly with endless numbers of people who go through life harboring fantasies of all sorts. It’s frustrating, in part, because in many ways I have a hard time faulting people too much. It would be fine if I could just dismiss virtually everyone with a look of contempt and some abrupt utterance.

But I can’t, because we’re all taught from day one to believe in falsehoods and fairytales, ghosts and goblins; to put faith in things that don’t exist; and to stake our very lives and well being on the unearned authority of "authorities."

Sure, it’s cute to have kids believing that Santa Claus is really coming to town, that Bunnies really decorate and hide eggs on Easter, and that fairies leave us their spare change when we lose a tooth. I’m no psychologist, but I just have to wonder sometimes if that seemingly innocent and charming stage of life ultimately does us more harm than good.

My point in all of this is that the events surrounding Katrina illustrate something very profound, and virtually nobody is getting it. I’m seeing articles today that this has been a very costly week politically and could hurt republicans in mid-term elections next year, and on and on. The translation: Bush and the Republicans can’t protect us from all calamity and make all things better. Let’s switch to the Democrats. Of course, they can’t either, because government doesn’t produce anything. Individuals and businesses produce things, then government steals part of it to finance its operations.

The only area where government is consistently competent is at making war, the focus of which is to destroy (which, of course, is sometimes necessary).

This should be a time for people to finally let sink in the notion that the government is no Santa Claus. Instead, their focus will be more to dress up someone else in St. Nick’s outfit next time around, looking for a better result, which is, of course, quite impossible.

Linked and quoted via Beck, here’s some food for thought, and I would recommend reading the whole thing.

First of all, the levees that were breached by the hurricane were built, owned and operated by government. Specifically, by the Army Corps of Engineers. The levees could have been erected to a greater height. They could have been stronger than they were. The drainage system could have operated more effectively. Here, the New Orleans Sewerage and Water Board was at fault. It consists of three main operating systems: sewerage, water, and drainage. See here, here and here.  Had they been, a lot of the inconvenience, fright, and even loss of life undergone in this city could have been avoided.

Then, too, these facilities may have fooled many people into thinking they were safer than they actually were. I know this applies to me. Thus, people were in effect subsidized, and encouraged to settle in the Big Easy. Without this particular bit of government mismanagement, New Orleans would likely have been settled less intensively. (On the other hand, at one time this city was the largest in the South; statist negligence of a different kind — graft, corruption, over-regulation— is responsible for it having a smaller population than otherwise.)

I am not appalled with these failures. After all, it is only human to err. Were these levee facilities put under the control of private enterprise, there is no guarantee of zero human suffering in the aftermath of Katrina. No, what enrages me is not any one mistake, or even a litany of them, but rather the fact that there is no automatic feedback mechanism that penalizes failure, and rewards success, the essence of the market system of private enterprise.

Will the New Orleans Sewerage and Water Board suffer any financial reverses as a result of the failure of their installations to prevent the horrendous conditions now being suffered by New Orleanians? To ask this question is to answer it.

One crucial step forward then, would be the privatization of this enterprise as part of the rebuilding process (if that indeed occurs; for more on this, see below). Perhaps a stock company could be formed; I suspect that the largest hotels, restaurants, universities, hospitals and other such ventures would have an incentive to become owners of such an enterprise.

Right now, the levees are run by the very same types of folks responsible for the post office and the motor vehicle bureau. I take no position on whether levees are a good or bad thing; only that if they are to be built, this should be done by an economic entity that can lose funding, and thus put its very existence at risk, if it errs. This can only apply to the market, never the state.

[…]

It is by no means clear that there should even be a city in the territory now occupied by New Orleans.

Ideally, under a regime of economic freedom, what determines whether a geographical area should be settled at all, and if so how intensively? It depends upon whether or not, in the eyes of the human economic actors involved, the subjective costs outweigh the benefits. The reason no one lives in the north or south poles, and that population density in Siberia, Northern Canada and the desert areas of Nevada is very low, is that the disadvantages are vastly greater than the advantages in those places.

However, if government subsidizes building in areas people on their own would not choose to locate, then the populace can no longer allocate itself geographically in a rational manner. Similarly, the government declares drought-stricken farmlands an emergency area, and heavily subsidizes agriculture in such locales, there is also misallocation of settlement in this regard.

The Federal Emergency Management Agency (FEMA), created in 1979, became part of the U.S. Department of Homeland Security only on March 1, 2003. The federal government has been doling out gobs of money to inhabitants of areas struck by tornados, storms, snow and other inclement weather for years. Such declarations number in the dozens for 2005 alone. Southern Louisiana, Mississippi and Alabama have already been declared federal disaster areas. Tons of money will pour into these political jurisdictions. Thus, locational decisions are and will continue to be rendered less rational than otherwise, if people had to pay the full costs of their geographical settlement decisions.