Home Depot, Amazon, Walmart and UPS or FEMA: Who Is the Real Cavalry?

On Tuesday morning, Jim Cantore of the Weather Channel was reporting on the devastation to Vermont from Hurricane Irene. He ended his report by saying the cavalry is finally on its way in the form of thirty large FEMA (Federal Emergency Management Agency) trucks with food, water, and generators.

Indeed, parts of New England have suffered from devastating floods, and some families have lost their homes. But who is the real cavalry? Are Vermonters really dependent on FEMA for food and water? (Notice, that not FEMA but the Vermont National Guard is flying helicopters into towns stranded by washed-out roads.)

Last Wednesday the news reports about Hurricane Irene became very alarming. The potential devastation from the storm over a wide area was terrifying. Living in a sparsely populated rural area as I do, I understood that if our power went out, along with millions of others, we would likely be at the end of the queue for power restoration. My family was simply not prepared for a power outage that had the potential to last for a week or two.

So, on Wednesday, the first thing I did was shop at Amazon. I’m an Amazon Prime customer and anything I ordered would arrive by Friday at no shipping charge. I ordered LED lanterns, a portable battery powered phone charger, cases of canned, natural foods, and five gallon water containers. (We are on well water; if the power goes out we have no water pump.)  This bounty was available at prices equal to or less than the prices in retail stores.

On Thursday, I shopped at Walmart, loading our van with ten cases of water and an ample supply of batteries. No one had to tell the Walmart team that batteries and water were going to be in demand. I could hear the walkie-talkies of Walmart associates crackle as they diligently worked to place supplies strategically all over the store.

On Friday, UPS arrived and unloaded all of my Amazon merchandise. My wife and I then turned our attention to securing our property. Fortunately, we suffered nothing more than a 24-hour power outage, tree damage, and erosion as fast flowing water washed over the road and found its channel in our yard.

It was not just Walmart, Amazon, and UPS that worked heroically to prepare Americans for Irene. Watch this short video about Home Depot’s command center as they stocked their stores in preparation. Indeed, all through New England, Walmart and Home Depot stores were fully stocked and ready sources of needed supplies. Admittedly, this is small comfort to those who suffered the biggest losses; but FEMA has already announced that it has no available funds for rebuilding flooded roads, damaged schools, etc.

To those who believe that government is the entity that will solve their problems, it is counterintuitive that, compared to FEMA,  Walmart, Home Depot, Amazon and UPS do a better job in preparing for a disaster as well as the aftermath of a disaster. Walmart, Home Depot, Amazon, and UPS are driven by profits, while it is said that FEMA employees are motivated by public service. Some might reason that those motivated by public service must be more caring and responsive than those motivated by profits.

Indeed, many FEMA employees may be motivated to serve their fellow Americans; but clearly, others among FEMA’s ranks are not. They are motivated by career advancement, power, and money. The image of the incompetent and shallow Michael Brown, director of FEMA, bumbling during Hurricane Katrina is a lasting one.

But can any director of FEMA be competent? Of course, a person in that position may be competent and caring. But, even then, would he or she be have the motivation, knowledge, or capacity to balance all of the competing human needs that arise in face of a disaster?

During the Nazi siege of Leningrad, the population of the city endured hell on earth. In 1941, as the Nazi’s closed their circle around the city, what did Communist Party chief of the city, Andrei Zhdanov, do? Did he work tirelessly around the clock to bring in needed food supplies before the circle closed? No. He worked tirelessly around the clock to arrest “spys.” A spy was defined as anyone who spoke a foreign language or had a foreign connection. Spies were often harmless senior citizens, but Zhdanov was doing the job that seemed important to him, rather than the job that was needed. And, he was very efficient at performing this terrible deed.

Admittedly, this is an extreme example; but it illustrates a point. What a bureaucracy thinks is needed and what is really needed can be two different things. In contrast, the goal of earning profits in a competitive market is what compels Walmart, Home Depot, Amazon, and UPS to deploy the energy of their employees towards what is really needed. Walmart, Home Depot, Amazon, and UPS earn money only when customers voluntarily purchase goods and services from them. Thus, their employees are benevolent towards people they have never met because it is in the self-interest of their organizations. And, it is also true that self-interest is joined by genuine feelings of goodwill as two parties interact in non-coercive trades.

In contrast, FEMA exists in a coercive relationship with American citizens. They earn their revenue in a political way; and FEMA’s success does not depend on pleasing American citizens. Indeed, like the public school system, the more their efforts fall short or outright fail, the more FEMA can argue it needs more tax revenue.

In short, no matter how efficiently FEMA uses tax money, no matter how caring FEMA employees are as a hand out water off the back of a truck to long lines of people, because FEMA is not subject to the discipline of the market, they will never match the operational efficiency and genuine caring of the employees of Home Depot, Amazon, Walmart and UPS.

To Mr. Cantore, I say, if New Englanders were truly dependent on FEMA, the cavalry would have been too little and too late.


6 Responses to Home Depot, Amazon, Walmart and UPS or FEMA: Who Is the Real Cavalry?

  1. Tom Kelley says:

    I love your blog. I especially like how you clearly explain how individual self interest can be the most efficient solution to most problems.

    However, you do a wonderful job of building strawmen and then knocking them down. I really don’t think many people (meteorologists aside) believe that the federal government is going to be their savior in times like these. Our society does not, and has not ever worked that way. The best most expect from the feds is making an awful situation barely tolerable. Fixing a problem or getting back to normal is up to you.

    Those that are counting on the government just haven’t been paying attention.

    • Thanks for the kind words, Tom. I hope you are correct about the attitudes of the public. What you say is certainly true about most of the readers of this blog; I’m not so sure about the general public. Economic Illiteracy seems pretty widespread to me.

  2. Chris Claypoole says:

    Sure, you have those observations of the private sector and of FEMA, and their relative competence. But, to paraphrase Groucho Marx,”Who are you going to believe, the government or your lying eyes?”

  3. James D. says:

    Funny that just this morning I heard a commercial for Home Depot on the radio pushing how they have ordered extra lots of the supplies most needed for rebuilding without raising prices (though I’m sure their volume discounts will grow). The differences between the private groups that we rely on and the government that tells us we should rely on them are clear enough. Home Depot aids me in times of need because they have incentive to; not just now, but if they serve me well now, I’ll go back to them in the future. If they don’t, they know Lowe’s is ready and willing to take my business. FEMA has a political monopoly on gov’t aid. I have no choice on when it brings aid or in what kind of aid it brings. And if they fail, I have no recourse or alternative in the future.
    This also brings up another point. There is a phrase that says “all politics is local”. Well, so is pretty much everything else, disaster relief included. My Home Depot carries more of what I need when these disasters strike, as opposed to the stock in Barry’s Home Depot. He lives in a rural area with well water, so they have lots of water for sale. I live in an area almost surrounded by water. Water filters are more popular sale items here. Home Depot can adjust what it offers according to the areas they live in. Amazon can do something similar by taking advantage of the logistics networks UPS has developed. FEMA on the other hand, tries to take a lot of credit for what it does, but all it really does is order up local resources to do its bidding. As Barry said, it was the Vermont National Guard flying missions, not FEMA helicopters. That’s because the Vermont National Guard will know what the people of rural (and often mountainous) Vermont will need, which will be different that what people like me (who live on a low-lying peninsula within sight of the Chesapeake) will need. FEMA, with all of its gov’t money, has little ability to alter what it can offer disaster victims, unlike local private businesses who often are struggling to deal with the disaster themselves. But its that “being in the same boat” that makes them so much more effective at being there for the people in need. Not that Federal officials will ever understand that.

  4. Thanks Chris and Jim.

    From: http://online.wsj.com/article/SB10001424053111904583204576544920504183188.html

    In Middleburgh, N.Y., a badly flooded dairy town in Schoharie County, the state’s emergency management office didn’t ship in food, water or direct people to shelters until Wednesday, three days after the storm hit, said Middleburgh Fire Chief, Brian Devlin.

    “We needed the stuff, like, yesterday. They said they were working on it, and it was taking forever,” said Rich Webb, a Middleburgh fire captain.

    Frustrated local firefighters dispatched a driver to the nearest Wal-Mart and Price Chopper, which donated pallets of water, food and toiletries, Mr. Devlin said.

  5. The first line of defence in any disaster is supposed to be YOURSELF… that means relying on YOURSELF to purchase the things you need to be protected and recover. The first governmental line of defence is your LOCAL government… Then the State government… THEN, as a last resort, the federal government – and FEMA is that arm of the federal government. So No, you should not have seen FEMA bringing in supplies that local resources can provide. The process worked, as you point out in your case, as it is supposed to work. Those who think FEMA is intended to be a first responder and a protector of the local community have very little understanding of the disaster cycle and processes.

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