March 1, 2006
Wal-Mart's Shelf-Correcting System Is Model for Government

By Edwin J. Feulner

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.

Oh, plenty 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.

FEMA also 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 needed.

As Sen. Susan Collins (R-Maine) explained, the waste happened because the government took a "pay first, ask questions later" approach.

The federal 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 in Washington.

It would be better to look toward an institution that didn't fail during Katrina: Wal-Mart.

The world's 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."

And while 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 strikes.

Wal-Mart 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."

Wal-Mart does what government intervention can't: It drives down prices and makes life better -- in New Orleans and, soon, in Chicago.

The company 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.

After Katrina, 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."

Unless we change our approach -- bringing in more private, local expertise and less federal bureaucracy -- we'll be reminded of that the next time disaster strikes.

Edwin J. Feulner, Ph.D., is President of The Heritage Foundation.

1995 - 2006 The Heritage Foundation
Visit the Heritage Foundation at


Edwin J. Feulner

Author Archive
Email Author
Print This Article
Send Article To a Friend

The Heritage Foundation

More Commentary
Democracy's Bitter Fruit - Daniel Pipes
Don't Be Google - Debra Saunders
Big Media, Big Problems - Tom Bevan

More From Edwin J. Feulner
Put Substance, Not Style in State of the Union
Reagan's Often-Forgotten Ideas
Fighting the Good Fight