ECONOMIC ANALYSIS:

Thinking about Management, Katrina, FEMA and Logistics

by Fred Cederholm

In the past two weeks, we have witnessed the best and the worst of what this nation has to offer.
I’ve been thinking about management, Katrina, FEMA, logistics, "The Next Big One," Stone Soup, and patronage. In the past two weeks, we have witnessed the best and the worst of what this nation has to offer. We have seen thousands of volunteers step up to the plate and many thousands of individuals and corporations open their wallets and checkbooks to come to the aid of those impacted by hurricane Katrina. We have also seen FEMA--the Federal Emergency Management Agency--come up lacking.

You see, FEMA "is tasked with responding to, planning for, recovering from and mitigating against disasters." This formerly independent agency joined 22 other federal agencies to become the new Department of Homeland Security in March 2003. Billions of dollars of our money were spent to restructure, streamline, and improve the federal government’s ability to respond to any and all types of catastrophic incidents--both natural and man-made. The first real test of our "new/improved" agency of first response came when hurricane Katrina hit the Gulf Coast. In the immediate aftermath, FEMA failed miserably--in fact, doing more harm than good.

Time is of the essence for recovery. When thousands of people need food, water, shelter, medical care; they need it now. State, local, private and charitable responders started coming to the rescue almost immediately. Those that got in before the FEMA czar took the reins of management/control began assisting the needy; those that didn’t, were told to wait. And, wait they did. As the story unfolds, we learn how FEMA became more of a bouncer than coordinator.

Director Michael Brown lacked the logistics background for meeting the FEMA mandate of getting the necessary items to those in need ASAP. Such training only comes from someone with a military background, preferably having had "hands-on" wartime experience. I mean... even a big event caterer/coordinator had more relevant work experience than an estates and trusts attorney who was an official of IAHA (International Arabian Horse Association)--a post from which he was reportedly dismissed because of supervisory failures.

There never seems to be enough time/money to get it right beforehand; yet there always seems to be unlimited time/cash to fix screw-ups.

The cover story on the Sept 19th issue of BusinessWeek, which focuses on "The Next Big One," addresses where America is most vulnerable and how the nation can better manage the risks ahead. There never seems to be enough time/money to get it right beforehand; yet there always seems to be unlimited time/cash to fix screw-ups. Now money/assistance is flowing into New Orleans faster than did the waters of Lake Pontchartrain--but the people are gone!

In grade school I read the little book, Stone Soup, written by Marcia Brown. It tells the story of three poor hungry soldiers who entered an even poorer and hungrier village. They "taught" the people how to make a hearty meal by boiling rocks in a pot. Actually, the "stone soup" was made better by one villager contributing carrots, another potatoes, another cabbage, another some meat, another some seasoning, and so on. In the end, the entire community feasted because they shared what they had with each other and everyone benefited. If you haven’t read it, please do. Better still, read it with a child and you will see how quickly they grasp its true message.

Unfortunately, the Stone Soup metaphor cannot be applied when you have a huge body of dislocated evacuees re-located to a mega-dome sports facility or a convention center. These folks need provisions provided to them. The Friday (almost four days) after landfall, the FEMA director announcing that MRE’s (Meals Ready to Eat) were going to be made available. He noted that these nutritious meals were the same as those provided to our troops in Iraq and Afghanistan. Huh?!? Isn’t a wholly owned subsidiary of Halliburton the primary provider of these to our armed forces--or maybe even the sole provider ? Former FEMA Director (and the former boss of current Director Brown), Joe M. Allbaugh, is now listed as a consultant to the Halliburton family of companies.

We know from past experience that this administration has a short> list of preferred providers. Who provides the MREs to FEMA? Were those providers geared up for production when Katrina hit, as they should have been? Or did the delays in getting food to the hurricane victims have anything to do with using the same MRE suppliers who were already busy providing for military needs? Friends Employed, Money Authorized--FEMA!

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.


Copyright 2005 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE and a forensic accountant. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.

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This story was published on September 12, 2005.