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Privatization of Disaster

In Culture of Corruption, Disaster Relief, Economic Justice, Election 2006, Election 2008, Environment, Housing, Hurricane Katrina, International Public Health, Labor, Laws & Regulation, US Politics on August 30, 2006 at 10:37 am

“The Red Cross has just announced a new disaster-response partnership with Wal-Mart. When the next hurricane hits, it will be a co-production of Big Aid and Big Box. This, apparently, is the lesson learned from the government’s calamitous response to Hurricane Katrina: Businesses do disaster better.”

This is how Naomi Klein starts a piece she wrote earlier this week on disaster relief. But she goes on to show that just because Wal-Mart may do disaster relief better, the end result isn’t better for taxpayers and the country as a whole.

She describes privatization of disaster relief as follows:

Largely under the public radar, billions of taxpayer dollars have been spent on the construction of a privatized disaster-response infrastructure…

I call it the Disaster Capitalism Complex. Whatever you might need in a serious crunch, these contractors can provide it: generators, water tanks, cots, port-a-potties, mobile homes, communications systems, helicopters, medicine, men with guns.

This state-within-a-state has been built almost exclusively with money from public contracts, including the training of its staff (overwhelmingly former civil servants, politicians and soldiers). Yet it is all privately owned; taxpayers have absolutely no control over it or claim to it. So far, that reality hasn’t sunk in because when these companies are getting their bills paid by government contracts, the Disaster Capitalism Complex provides its services to the public free of charge.

But here’s the catch: The U.S. government is going broke, in no small part thanks to this kind of loony spending. The national debt is $8-trillion; the federal budget deficit is at least $260-billion. That means that sooner rather than later, the contracts are going to dry up. And no one knows this better than the companies themselves. Ralph Sheridan, chief executive of Good Harbor Partners, one of hundreds of new counter-terrorism companies, explains that “expenditures by governments are episodic and come in bubbles.” Insiders call it the “homeland security bubble.”

When it bursts, firms such as Bechtel, Fluor and Blackwater will lose their primary revenue stream. They will still have all their high-tech gear giving them the ability to respond to disasters — while the government will have let that precious skill whither away — but now they will rent back the tax-funded infrastructure at whatever price they choose.

Does this mean that the next time a disaster hits, we will be even less equipped to handle it? It looks like that may be the case.

Meanwhile, in other disaster relief funding news, the Washington Post reports today that FEMA is trying to cut corners and hold back funding on some of the repair and renewal projects in New Orleans and other areas damaged by Katrina. They report:

Someone had to pay to remove 3,000 dead trees in New Orleans. The trees, insisted the Federal Emergency Management Agency, couldn’t have been killed by Hurricane Katrina’s floodwaters because they weren’t toppled to a certain angle. New Orleans would have to pay…

Through hundreds of such disputes large and small, the most costly disaster in U.S. history is fast becoming its most contentious, with appeals and disputes worth nearly a billion dollars bogging down repairs of critical public systems and delaying the return of residents.

Current and former officials at all levels blame FEMA workers’ inexperience with eligibility rules, weaknesses in U.S. disaster laws and inconsistent treatment by Congress for much of the wrangling.

But why are the workers inexperienced? Well, that sort of leads us back to Naomi Klein’s article. The WaPo article describes the situation as follows:

Elsewhere [outisde of New Orleans] local officials say a parade of new FEMA officials — the overstretched agency rotates workers every 90 days or so and relies on temporary employees as well — leads to constantly changing decisions on project approvals and paperwork.

One reason for mistakes is that FEMA has suffered a “brain drain” of top officials familiar with the complex rules to retirements and agency upheaval in recent years, said David Fukutomi, a FEMA consultant who is serving as a spokesman….

The state of Louisiana had only 14 disaster recovery employees before the storm and is relying on 173 contract workers provided by James Lee Witt Associates, the firm headed by the Clinton administration FEMA director, to help it manage the process, Jones said. FEMA has more than 700 people in the Gulf states working on the program, about 90 percent of them interim or contract workers, Fukutomi said.

So in summary, privatization leads to debt, unskilled workers, chaos, disputes, and a dependency on private companies to save us when something bad happens again. And when something does happen, the best services will go to people who can pay the most.

To top it off, disaster relief isn’t the only industry that is being sold off by the government to private companies. You can add border patrol, healthcare, homeland security, and more to the list. Naomi Klein puts it best when she says:

The model, of course, is the U.S. healthcare system, in which the wealthy can access best-in-class treatment in spa-like environments while 46-million Americans lack health insurance. As emergency-response, the model is already at work in the global AIDS pandemic: private-sector prowess helped produce lifesaving drugs (with heavy public subsidies), then set prices so high that the vast majority of the world’s infected cannot afford treatment.

If that is the corporate world’s track record on slow-motion disasters, why should we expect different values to govern fast-moving disasters, like hurricanes or even terrorist attacks?

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  1. […] I’m purely speculating, but could it be that the U.S government is gearing up to make an offer of privatized education in Iraq?  If that were to happen, Iraq truly could have a system set up that is modelled after the U.S. system, where people often pay huge sums of money for education, while scholarships and grants are on the decline. For now, it seems both systems have different means to the same end anyway (that end being decrease in education). […]

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