March 1, 2006
Wal-Mart's Shelf-Correcting System Is Model for Government
Anyone who's ever filed a tax return or visited the Department
of Motor Vehicles understands that government does two things
well: spends our money and wastes our time. Unfortunately, both
traits were on display during the response to Hurricane Katrina.
A House select
committee headed by Rep. Tom Davis (R-Va.) says the government
displayed "fecklessness, flailing and organizational paralysis."
The committee report lays out 90 flaws in the Katrina response
and notes that all levels of government failed.
of money was going out. Last September, the federal government
was spending about $1 billion per day -- and it generated plenty
of waste. The Federal Emergency Management Agency handed thousands
of checks (for $2,000 each) to charlatans.
wasted money on housing. It spent $236 million to rent three cruise
ships for evacuees. The ships were never more than half full.
And don't forget the manufactured homes, some 10,777 of which
are rotting away in Arkansas because FEMA ordered more than it
As Sen. Susan
Collins (R-Maine) explained, the waste happened because the government
took a "pay first, ask questions later" approach.
government has promised to fix its problems. Michael Chertoff,
secretary of Homeland Security, says he'll deliver "a fully
integrated and unified" department before the next hurricane
season. Fine. But let's remember, not all answers can be found
be better to look toward an institution that didn't fail during
largest retailer had 171 facilities in the path of the storm.
But as Jason Jackson, the company's director of business continuity,
told a Senate committee, "We were able to recover and reopen
83 percent of our facilities in the Gulf area within six days."
One key reason
for Wal-Mart's success, Jackson said, is "associates who
are dedicated to their communities." That local connection
helped it deliver goods when government failed. As Investor's
Business Daily reported in September, "While local and federal
groups suffered communications problems and bickered over who
was in charge, Wal-Mart sprang into action."
Chertoff admits Katrina caught the government flat-footed, Wal-Mart
is always ready. In his book The World is Flat, New York Times
columnist Thomas Friedman wrote, "The minute Wal-Mart's meteorologists
tell headquarters a hurricane is bearing down on Florida, its
supply chain automatically adjusts to a hurricane mix in the Florida
stores." That means plenty of non-perishable food and critical
items such as generators appear in stores even before disaster
has plenty to teach the government. "When FEMA or another
agency places a blanket order of 100 trailers of water, we often
question if the person placing the order really knows what 100
trailers of merchandise looks like," Jackson testified. "Usually
the answer to this is that the person making the order was given
a dollar amount to spend, and they do not comprehend the size
of this order or what it means."
does what government intervention can't: It drives down prices
and makes life better -- in New Orleans and, soon, in Chicago.
opened a store last month in Evergreen Park (where I was born),
after the City Council refused to allow it inside the city limits.
Some 25,000 people applied for the store's 325 jobs, which suggests
Wal-Mart is popular with employees as well as consumers.
even Wal-Mart's critics sang its praises. "It's hard to imagine
any government program matching the efficiency of a Wal-Mart,"
wrote consulting firm Lynch Ryan on its Weblog, adding, "Government
has a lot to learn from Wal-Mart."
change our approach -- bringing in more private, local expertise
and less federal bureaucracy -- we'll be reminded of that the
next time disaster strikes.
J. Feulner, Ph.D., is President of The
1995 - 2006 The Heritage Foundation
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