New Orleans needs more freedom

Posted: Oct 05, 2005 12:00 AM

When Hurricane Katrina struck, private citizens wanted to help, but often the government got in the way. The doctors who wanted to heal people in New Orleans, but were told to fill out tax forms instead, experienced just one of many horror tales. Government seemed to have declared a monopoly on helping people -- but then its insane bureaucracy made certain it did a lousy job helping.
Now some Republicans have taken a detour from their party's rush to spend all your money by actually proposing that government help the people in the hurricane zone by getting out of the way.

 President Bush wants to create a "Gulf Opportunity Zone" with reduced federal taxes across parts of three states. Now, if the president really wanted to get Washington out of the way, he might ask Congress to abolish personal and corporate income taxes there. What he's proposing is less dramatic -- but it's a start, and it's targeted to encourage investment in equipment, which is likely to be a significant cost for those starting or restarting businesses in an area where many assets have just been destroyed by a terrible storm.

 Other proposals and administration decisions include waiving all Environmental Protection Agency regulations for the rebuilding, dropping affirmative-action rules for government contractors, setting aside restrictions on truck drivers' hours, and letting government money follow children displaced by the storm to any school they choose. What a radical idea! Government might actually let free people make their own choices.

 Many politicians want Americans to believe that we can't do anything individually without Washington's help. But Washington can't do anything well. I'll pay you $100 if you can name one thing the government does more efficiently than the private sector.

 FEMA was only established in 1979, under President Carter. What did Americans do before that? In 1871, when downtown Chicago was destroyed in a fire, private charity came to the rescue. The Chicago Aid and Relief Society coordinated assistance for a year and a half. According to the Foundation for Economic Education, the charity workers strove to avoid giving more than minimal food and clothing to those who could earn their own way. They helped restart businesses, equipping medical offices, stocking stores, and buying sewing machines. Government mainly stuck to keeping order. 

 Yet now, after Katrina led government to once again demonstrate its incompetence, politicians demand government rebuild New Orleans?  The most remarkable thing about the president's proposal is his recognition of the obvious fact: "It is entrepreneurship that creates jobs and opportunity."

 Why can't we have a little experiment? Suspend labor laws and licensing laws, reduce taxes and establish school vouchers in one small place. If it is a bad idea, as the unions and lovers of big government contend, that will be clear soon enough. I suspect they really fear success: Schools will improve, business will recover, a thousand ideas will bloom. Then everyone hemmed in by bureaucracy's suffocating rules will want Louisiana's freedom, too.

 The president has already suspended the "prevailing wage law" in areas affected by Katrina. The screaming! Union bosses accused the president of pushing an "antiworker agenda" that will deny people "fair wages." Nonsense. We never needed a law to force employers to pay prevailing wages. If a wage is "prevailing," it will just happen; if it's unfair, no one will take it.

 The current "prevailing wage" law requires businesses carrying out government contracts to pay a wage set, not by supply and demand, but by collusion between unions and politicians who are eager keep their constituents happy. They make sure the wage is high even for unskilled work.  In real life, of course, this strangles opportunity. Employers want to get as much productivity for their dollar as the law allows, so they hire only the most experienced workers. If you are a young beginner who wants to help, and learn, "prevailing wage" laws mean you're out of luck.

 With those rules suspended, an unemployed flood victim may actually get a job on a federal project. New Orleans has a long history of poverty, and Katrina made the problem worse. Fewer stupid rules would help.

 It's time to give New Orleans an emergency dose of freedom.