Friday, September 16, 2005
President Bush’s Katrina relief proposals
On first hearing the President announce his three proposals for offering help in the wake of Katrina, I hated them all, but on second thought, I like the homestead act proposal. Bush's three proposals, and my initial criticisms:
1. Turn the affected areas into enterprise zones.
The last thing we should do is give people artificial incentive to build businesses in hurricane alley.
2. $5,000 accounts for worker training and child care.
People learn by doing, not by learning about doing. What the displaced welfare class needs is to go to work, not to sit around and talk about going to work. If they are unemployable, and talking about work is the best they can do, be honest that these people can’t be helped. Don’t throw money away pretending to help them with phony “job training” that never has worked and never will. In the real world, this isn’t how people learn to work. Paying people have someone else raise their children isn’t a net benefit either.
3. A homestead act to give federal lands in the Gulf states over to poor people on condition that they build on it, with federally subsidized mortgages.
The only kind of development that works is natural development, according to the private incentives that economic conditions, local, national and international, create. Plopping a bunch of poor people on federal land that would not for purely economic reasons be developed is a recipe for failure.
But wait a minute. I have often lamented how much development has not occurred because the government has locked up vast amounts of federal land, regardless of its fitness for development. A homestead act is one way to return federal land to the market. It’s not the best way. As with programs for subsidizing “low income housing,” owners will not gain full property rights for many years. How about just selling federal land, especially in areas that are not so prone to hurricane and flood damage? If it is prime for development, it will be bought, and the local economies will grow.
But a homestead act would be a nice option for people who don’t have the liquidity to buy. It would arguably be part of the efficient mix of policies, and as long as it is combined with other necessary components of development (the whole area can’t be untradable land) it’s a good idea, a net-gainer, not the net-loser I was initially thinking.
What is the matter with me? Here was my initial summary view of Bush’s Katrina proposals:
1. Turn the affected areas into enterprise zones.
The last thing we should do is give people artificial incentive to build businesses in hurricane alley.
2. $5,000 accounts for worker training and child care.
People learn by doing, not by learning about doing. What the displaced welfare class needs is to go to work, not to sit around and talk about going to work. If they are unemployable, and talking about work is the best they can do, be honest that these people can’t be helped. Don’t throw money away pretending to help them with phony “job training” that never has worked and never will. In the real world, this isn’t how people learn to work. Paying people have someone else raise their children isn’t a net benefit either.
3. A homestead act to give federal lands in the Gulf states over to poor people on condition that they build on it, with federally subsidized mortgages.
The only kind of development that works is natural development, according to the private incentives that economic conditions, local, national and international, create. Plopping a bunch of poor people on federal land that would not for purely economic reasons be developed is a recipe for failure.
But wait a minute. I have often lamented how much development has not occurred because the government has locked up vast amounts of federal land, regardless of its fitness for development. A homestead act is one way to return federal land to the market. It’s not the best way. As with programs for subsidizing “low income housing,” owners will not gain full property rights for many years. How about just selling federal land, especially in areas that are not so prone to hurricane and flood damage? If it is prime for development, it will be bought, and the local economies will grow.
But a homestead act would be a nice option for people who don’t have the liquidity to buy. It would arguably be part of the efficient mix of policies, and as long as it is combined with other necessary components of development (the whole area can’t be untradable land) it’s a good idea, a net-gainer, not the net-loser I was initially thinking.
What is the matter with me? Here was my initial summary view of Bush’s Katrina proposals:
I’ve had my gripes with Bush. The refusal to enforce our borders and our immigration laws, signing McCain-Feingold, competing with the Democrats over who can give old people (our wealthiest age cohort) the biggest prescription drug subsidies, the disastrous subsidies for inefficient domestic steel producers, but these Katrina relief policies are just gratuitous. Okay, he feels compelled to DO SOMETHING (the bane of good government), but come on. Given a blank sheet of paper, with no idiotic Congress to satisfy, and every one of his prescriptions is moronic? It makes me sick.I’m sorry Mr. President. Your proposals are not THAT bad, and done right, the homestead proposal could actually be pretty good.
