What is the job of government in a free-market nation with a representative democracy? Should government cover every risk? Make good every loss? Or, should people and businesses be responsible for their own decisions?
These questions present special dilemmas when considering issues such as healthcare or disaster assistance. Where exactly does government responsibility end and individual responsibility begin?
Back in 1969, the Federal government doled out a record $150 million of disaster assistance. This is about $800 million in today’s dollars. Today, $800 million wouldn’t even cover one tiny "disaster."
With each disaster declaration comes an outpouring of federal money — our money — borrowed money — making people in New York City or in Chicago pay for a bad downpour in Alabama or Oregon. This money does help the affected area, but it comes at a cost, as the borrowing takes capital away from other productive uses in society, slightly lowering economic activity across the entire nation.
U.S. Presidents have been fairly restrained in their declaration of disasters. Eisenhower declared just over 100 in his 8 years. Carter, about the same, with none declared for drought or severe storms — an interesting fact when considering President Carter was a farmer. President Clinton, on the other hand, heavily used Federal disaster declarations, calling over 375, more than double the previous high. Most of Clinton’s increase was for severe storms, of which he declared 129, more than 10 times the previous high of 11 declared by George H.W. Bush. Was the weather any worse during Clinton’s reign? Or, did he just calculate that all that federal money could buy a lot of gratitude?
In the 1970s I spent my high school years in the ski resort of Mammoth Lakes. My father owned an auto parts store there in partnership with my uncle. Another uncle ran the Mobil gas station. Mammoth Lakes is heavily dependent on tourists: skiers in the winter and fishers, hunters, and campers in the summer. During the winter of 1976-77 Mammoth experienced its modern low mark for snowfall with only 90 inches on the mountain. Businesses suffered. Many went broke. I clearly remember the stress on my father as we struggled through that dry winter. When a big storm blew up and offered but a snowless gale, he’d joke that we had "three feet of wind last night." We had no disaster assistance, but we scraped by. The next winter saw 40 feet of snow. When not in school, I worked, putting on tire chains, cleaning condos, and working in my father’s store.
Today, things are different. A few weeks ago, a cold front dipped down into California, destroying much of the citrus and avocado crops. Damages were estimated at close to a billion dollars. Migrant farm workers, some citizens, some legal residents, some illegal immigrants, were thrown out of work. Gov. Schwarzenegger toured the orchards on his crutches, still in pain from a skiing accident. Government began to rush into action with our tax dollars. Let’s get help to the farmers and the farm workers, officials said.
Sen. Barbara Boxer (D.-Calif.) held a press conference in Washington, D.C. Wednesday to announce a federal emergency aid bill. With her was my former Assembly colleague, Rep. Kevin McCarthy (R.-Bakersfield). They were doing their job, bringing federal money to California. Some $2 billion dollars will be on the way to California for a "disaster" that saw not one house destroyed by wind, nor one business leveled by a massive earthquake.
Some of the tax money will go to farmers who will have their payment limits raised from $80,000 to $125,000 in what the press is calling an "unusually generous agricultural disaster relief proposal." Much of the money will go to migrant workers. Federal disaster assistance cannot discriminate against illegal immigrants, just like emergency room care or K through 12 education. This means that our tax money will be going to pay people for not working who are not supposed to work in the U.S. in the first place! The irony is almost too rich to stand.
What is happening in America? Farming is a notoriously risky business. As a hedge against this, farmers can buy crop insurance. Will frequent federal disaster declarations cause farmers to forego this cost and shift their risk to the general population? Farmers can also save money for a drought or an overly rainy season. Will the comfort of a federal safety net cause farmers to spend money elsewhere, leaving the rest of us with the tab when the weather does not cooperate? Lastly, why are we paying migrant farm workers, many of them illegal immigrants, to stay put in California? Why don’t we encourage them to follow the work and harvest crops in other areas that need their labor? Isn’t that what migrant farm workers do?
We cannot afford to continue with a policy of overly easy and generous disaster assistance payouts. America was built on hard work, risk and reward. Take away the risk and there will be far less reward for all of society.