Chris Edwards on Hurricane Katrina on National Review Online

Chris Edwards on Hurricane Katrina on National Review Online

Why could Louisiana or New Orleans not afford to pay for its own levees and flood control system? If you say corruption, you are missing a larger point.

If corruption were the sole problem, why are all these Congressmen so busy trying to take money home? Simple, the federal government's share of the tax load is far, far too high.

Let's look at the marginal income tax in one state, that I know: Indiana. We still pay the federal marginal tax rate of 35%. Add to that the Indiana flat rate of 3.4%. Without deductions and other adjustments, that theoretically means more than 90% of Indiana's income taxes go to the federal government. Theory is not sound in its detail because the deduction makes this analysis far more complicated. Nevertheless, its principle is sound: the federal government is taking more than 7 times as much revenue from income as the state of Indiana.

That means that Indiana has to beg the Congress for money to get close to getting its money back. If Indiana does get its money back then other states won't because someone has to pay for the Army, Congress, the White House, the Supreme Court, the IRS, etc., etc., etc.

What did we learn out of Katrina? Local resources are sorely underfunded by the dollars going to their stated purpose. From Rita, we learned that major cities gridlock is more than just everyday commuter trouble. It is life threatening in an emergency. The interstates rely on private vehicles. Private vehicles depend on public roads (unless you own an SUV and have courage enough to go off roading through your neighbor's yard with Rita at your back).

The Democrats will seek to "raise taxes." As I have noted before, the word "tax" is really a hanging modifier. Do they want higher tax rates (e.g., more than the 35% noted above) or do they want more tax revenue (e.g., more cash in the federal treasury). More tax revenues are coming through Bush's lower tax rates. Do they prefer higher tax rates with lower tax revenues?

I would argue that the overall tax burden needs to be lower and it needs to be shifted toward the states. The Army Corps of Engineers should not be the primary contracting agency for levees or dams. It should be the repository of engineering expertise as consultant to the state and the central planning agency on interstate waters like the Mississippi. Like the relationship of a private developer to a zoning board, the states should build and the Corps should approve or veto within a pre-existing plan.

This would move the budgeting control and oversight to a small group of people. The federal government would have less control but spend less money for more effect.

If states like Louisiana are corrupt and wasteful, the federal government's rebuilding dollars should be forthcoming but with strings for legal reforms and prosecution of fraud. The state's cleaning will be then both physical and political.

If local officials know that failure of their home-built and -managed infrastructure could lead to their individual prosecution if it should fail, their incentive will be to overbuild. Then local legislature will have the ability to use its purse-strings to control the overspending.

This still leaves me with a problem for which I have no satisfactory conclusion. What happens if and when the legislatures fail to perform their function? Legislators of 30-year tenure are the epitomy of bad legislatures. Federal government dollars in rebuilding need to sting local legislatures for legislative failures.

I am all for democracy, but I am not a big fan of Jacksonian democracy in the modern era. I have no opinion whether it worked in the past but I can say with certainty from a state working under a Jacksonian constitution that it stinks today.

The federal executive's failures are due to its size. No president can manage that many people.

The state executive does not have the same problem. His problem is that in a Jacksonian system, he controls too few departments yet is blamed for all failures.

The federal executive ironically can be more responsive. If a FEMA director fails, you fire him. If an attorney general fails, you fire him. With only one elected official at the head of the government, the secretary and undersecretaries are more at risk and must keep the president content.

In a Jacksonian system, like Indiana, if the attorney general is off in a different direction than the governor in enforcing laws, there is likely to be political fights between the offices and no real correction made until the next election.

Well run companies use the CEO chopping block as the means to control the company. The threat of bad news leading to the CEO's termination makes the underlyings more responsive to the CEO's wishes, particularly if the CEO's underlyings are his cronies. This is a good thing. Firing the CEO is firing the team. Ultimately, this means that the CEO can fire individuals for a period of time to perfect his plan. After a time the plan either works or fails. If it fails, the CEO goes -- along with his failing team.

If the stakes in the state legislature go up so that the legislature knows that a flooded first-class city means they lose their jobs, is that enough to make sure the levees are built properly?

I don't know. All I know is that these same local officials can blame Washington for their own thievery now. Is that really better to institutionalize passing the buck? Not likely.