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Hurricane Helene’s death toll now exceeds 230, and property damage estimates exceed $30 billion. We express our condolences to those whose loved ones died. We are also grateful that our loved ones escaped physical harm, though they lost their electrical, water, internet and cellphone service and evacuated their homes. A week after the disaster, some isolated communities were still without power and reliable communications links as another hurricane, Milton, approached.
Many criticize the Federal Emergency Management Administration. U.S. House Speaker Mike Johnson characterizes the FEMA response as a “massive failure.” Others defend the agency. The Biden White House declares that “FEMA Disaster Survivor Assistance teams are … help(ing) people get federal assistance where they need it as quickly as feasible.” As in previous disasters, we suspect there is a large dose of partisanship in both postures.
Private firms such as Walmart, Target and Lowe’s are also providing immediate emergency relief to hard-hit areas—shipping bottled water and medical supplies—and committing millions of dollars to future recovery and rebuilding funds.
Is this action evidence that big-box retailers put “people over profit” and recognize they have a social responsibility to “make a difference”? Or is their beneficence a clever ruse to build goodwill and future profitability? After all, a partnership with Dolly Parton is unlikely to hurt the bottom line. We doubt displaced households receiving supplies from a big-box store are too concerned about such academic speculation.
Our late and much-missed colleague Steven Horwitz had insights into the relative success of for-profit entities such as Walmart compared to FEMA in providing relief to victims of Hurricane Katrina in 2005. Horwitz made the case that this outcome was neither an accident nor a surprise. Walmart and other big-box firms are in a highly competitive industry, so it is in their interests to develop “well-honed logistical skills, informed by years of responding to market signals” well before a disaster. These skills and organizational knowledge are readily “transferred over to (the) crisis situation.” He went on to argue that “(Walmart) has honed the agility and responsiveness that disaster experts would love to inculcate in FEMA … [t]hose characteristics, however, are a product of the competitive market environment in which Walmart operates, not of its organizational structure or of the quality of its leadership per se.”
Good outcomes are not simply a matter of good people doing good things. Instead, they are a result of decision-makers having the incentives, information and ability to be effective.•
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Bohanon and Horowitz are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.
Editor’s note: This column was written before Hurricane Milton made landfall in Florida.
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