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The Economics & Politics of FEMA - Why FEMA Failed After Hurricane Katrina
by Russell S. Sobel
James Clark Coffman Distinguished Chair & Professor of Economics
West Virginia University

"... I received a note from Tjalling Koopmans asking whether I had really said that if Manhattan was bombed, the best way to evacuate the population would be to use the price system. I was taken aback by his letter, because I had not even thought of that problem. But I told Tjalling that the first time Manhattan was bombed any system of would be grotesquely confused and inefficient. If the bombings became repetitive, however, I thought the price system could handle the problem well. The first half of my answer was surely correct, and I believe now even more than I did then in the market system's flexibility, adaptability, and resourcefulness in finding new ways to make money." George J. Stigler, from Memoirs of an Unregulated Economist (Basic Books, 1985), p. 61.


One of my research interests is the economic analysis of FEMA.  In particular I focus on how political pressures and favoritism play a large role in government disaster relief efforts and funding, and also on how disaster relief might better be handled by the private sector.  I published a paper with Tom Garrett, one of my Ph.D. students here at West Virginia University on this topic (see below).  Tom is now at the St. Louis Federal Reserve Bank and his email is Tom.A.Garrett@stls.frb.org.  Because of FEMA's failure in the wake of Hurricane Katrina, our research has become quite heavily cited in the media, and in new academic studies on FEMA.  More recently, I have done several new research papers with my fellow WVU colleague Peter T. Leeson and his email is Pete.Leeson@mail.wvu.edu.  This page below contains information about my research on FEMA and the media coverage we have received.


NATIONAL MEDIA COVERAGE
 
CBS Evening News (9/1/06) CNBC Closing Bell (9/15/05) CSPAN2 Today in Washington (8/23/06)

CBS Evening News.  I was interviewed for the CBS Evening News for a story on FEMA that was broadcast during their 6:30pm evening news on Friday, September 1, 2006.  A video of my original full-length interview can be found by following the link above.

Tom and I were interviewed on CNBC's top rated national news program, "Closing Bell" at 4:00 p.m. on September 15, 2005.
    If you are using a high-bandwidth computer, and have the right plug-ins, you can watch it in streaming video (three options):
          Quicktime
          IPTV MPEG1
          IPTV MPEG2 (High Quality)
    If not, you can download the ZIP file and watch the MPG version by clicking here. (appx. size is 400MB, so it might take a while)

My presentation of research findings from my paper "Weathering Corruption" with coauthor Peter Leeson on FEMA corruption (presentation held at the National Press Club's First Amendment Room as part of their Newsmaker Media Briefing series) was carried live on CSPAN2's "Today in Washington" on August 23, 2006 from 9:30-11am, and also rebroadcast that evening at 9pm.  The presentation was part of a program entitled "The Crisis of Katrina: Lessons for Preparedness and Response." This work is part of a grant project I'm doing as an Affiliated Senior Scholar with George Mason University's Mercatus Center.  The paper in PDF format is at the link above, and a video of my presentation is on the CSPAN website here (but you need the most recent version of Real Player for it, my presentation begins at 27:45 into the video and ends at 38:45, then my Q&A begins at 1:02:50).  Stories about the paper have been picked up by several media outlets including the Washington Post, National Review, Mobile Alabama Press-Register, Houston Chronicle, The Epoch Times, the American Urban Radio Network, Delaware News Journal, Charleston Gazette, and the Christian Science MonitorThe Economist magazine also carried a story about our research entitled "Blame the Weather" as a boxed feature on page 28 of the September 2-8, 2006 edition.

My original paper with Tom Garrett has also been the topic of two articles in the New York Times:
     "At FEMA, Disasters and Politics Go Hand in Hand" by Alan B. Krueger (September 15, 2005, Section C; Page 2)
     "Disaster Aid: The Mix Of Mercy and Politics" by David E. Rosenbaum (November 2, 2003, Section 4; Page 1)


The Sobel/Garrett paper was also the subject of a Harvard Magazine article, "The Politics of Disaster" by Andrew Reeves. As well as an article in The Christian Science Monitor (10/26/05), "The Ties Between Disaster Aid and Politics," by Peter N. Spotts.

In addition, Knight Ridder Newspapers cleared a story by Megan O'Matz, Sally Kestin, John Maines and Jon Burstein quoting me that was picked up by newspapers nation-wide as part of a story on corruption and fraud in FEMA spending in Florida.  The story was generally run either under the headline "Disaster assistance tangled up with politics - at a cost to taxpayers"  or "Disaster assistance in bed with politics" or "FEMA assistance abuses are found."  Among others, the article was carried in the South Florida Sun-Sentinel (originator); Rutland Herald, Montana Standard, Baltimore Sun; Kansas City Star, Tallahassee Democrat, Grand Forks Herald, Bradenton Herald, San Luis Obispo Tribune, Lexington Herald-Leader, and more.  I've also been interviewed by Eileen Sullivan from Congressional Quarterly, and by several local newspapers including the Fairmont Times West Virginian, Wheeling News Register, and the Clarksburg Exponent Telegram.  This research was also cited in a story in Worth Magazine.

I was also interviewed on two of the leading talk/news radio stations in the Midwest, KMOX CBS Radio St. Louis (9/20/05; 3:30pm Eastern) by Paul Harris (click here to listen to the MP3, my interview begins 3 minutes 45 seconds into the segment), and by Francene Cucinello (a West Virginia University graduate!) on 84 WHAS Radio Knoxville (9/28/05; 9:15am).  On June 15, 2006, I was interviewed by Tom Parker for KPAM in Portland, Oregon about the fraud on FEMA debit cards, and on April 14, 2007 I was interviewed by Chris Murray on "Your Financial Editor" 930 WFMD.

I have also given a presentation to FEMA management and legal staff summarizing all of my work (5/17/07).



MY ORIGINAL ACADEMIC WORK ON FEMA

The citation for the original paper, along with a link to the PDF version, and the abstract is below:

Thomas A. Garrett and Russell S. Sobel.  “The Political Economy of FEMA Disaster Payments.” Economic Inquiry 41, No. 3 (July 2003): 496-509.
Abstract: We explore whether presidential and congressional influences affect the rate of disaster declaration and the allocation of FEMA (Federal Emergency Management Agency) disaster expenditures across states.  We find that states politically important to the president have a higher rate of disaster declaration by the president, and that FEMA disaster  expenditures are higher in states having congressional representation on FEMA oversight committees.  Our models predict that nearly half of all disaster relief is motivated politically rather than by need.  The findings reject a purely altruistic model of FEMA assistance and question the relative effectiveness of government versus private disaster relief.


MY ONGOING FEMA, DISASTER RELIEF, AND HURRICANE KATRINA RESEARCH

I have a paper just published that uses economic analysis to help understand what when wrong in the government rescue and relief efforts in the wake of Hurricane Katrina with coauthor Peter T. Leeson

Sobel, Russell S. and Peter T. Leeson, “Government's Response to Hurricane Katrina: A Public Choice Analysis,” Public Choice 127, No. 1/2 (April 2006), pp. 55-73.

A "public policy" version of the paper for a non-academic audience, with an expanded section on private relief efforts was published by the Cato Institute as Policy Analysis Paper no. 573, and it can be found here.  An op-ed on FEMA reform released in advance of the study appeared in the Philadelphia Inquirer on July 11, 2006, and it can be found here, and a longer press release version was published in the  Montana Standard.  On the one year anniversary of Katrina, we revised our Cato editorial on FEMA reform (paying particular attention to the central planning aspect) and it ran in the Tallahassee Democrat, Houston Chronicle, Harrisburg Patriot-News, Newark Star-Ledger, Connecticut Hour, and the NY Times Herald-Record.

Peter Leeson and I just finished a research paper entitled "Weathering Corruption" that explores the link between FEMA disaster money and state officials being convicted on federal corruption charges.  The paper is forthcoming in The Journal of Law and Economics.  See the media coverage section above for more information on the paper's coverage at the National Press Club and on CSPAN2.  We also presented this paper in the Mercatus Center's Capital Hill Campus series to a number of congressional staff members in the Rayburn House Office Building on Aug. 29, 2006.  An article ran in our University's student newspaper, the Daily Athenaeum, about our work on FEMA corruption.

We also published an article in Worth Magazine on FEMA failure and the topic of privatization of disaster relief. 

Our most recent completed work is a paper on the use of knowledge in disaster relief management that is forthcoming in The Independent Review. It can be found here:

Sobel, Russell S. and Peter T. Leeson, "The Use of Knowledge in Natural Disaster Relief Management," The Independent Review 11, No. 4 (Spring 2007), pp. 519-532.


HOW TO CONTACT ME

I am available for interviews on the politics of FEMA and on FEMA reform, and also would like to hear from you if you have information that might be helpful in my ongoing research. I can be contacted at (304) 293-7864 or by email at Russell.Sobel@mail.wvu.edu

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