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Tuesday, October 18, 2005
Katrina Victims and Paternalism
A few weeks back, Dan M. wrote a nice post on the problems of distributing debit cards to victims of Katrina. He then wrote:
Is it just me, or is anyone else worried about giving $2000 to victims without any control over what it gets spent on? Call me paternalist, but since these are public dollars (that I subsidize through taxes), I'm not entirely excited about "empowering" the purchase of alcohol, tobacco, guns and ammo, and lottery tickets.
An interesting comment thread ensued. My sense is that most commentators disagreed with Dan, on a variety of grounds. However, the discussion was all vaguely theoretical (if we give victims money, they might spend it on goods that we would not, in a perfect world, have wished). But it turns out that Dan's prediction was spot on. According to a Boston Herald report:
Herald reporters witnessed blatant public drinking at a Falmouth strip mall by Katrina victims living at taxpayer expense at Camp Edwards on Otis Air Force Base. And strippers at Zachary's nightclub in Mashpee, a few miles from the Bourne base, report giving lap dances to several evacuees.
"They were tipping me $5 a pop,'' said a Zachary's dancer named Angel.
"I told them I felt bad taking their money. But I still took it.''
I know that I am supposed to find this outrageous. And I suppose that Dan is right that the federal government shouldn't be in the business of subsidizing anti-social spending.
But, in truth, I think that investigations like this are a poor use of media resources. Aren't there bigger fish (the Big Dig; Delay; Libby) that still need frying?
Posted by Dave Hoffman on October 18, 2005 at 11:10 AM in Current Affairs | Permalink
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Comments
Thaddeus: The title referred back to Dan Markel's original post, and comments, which talked about when it might be good policy to control evacuee spending. I don't think we can tell, based on the post, whether the recipients were spending surplus income or were literally spending food money. Answering *that* question might have been a worthwhile use of media resources.
In terms of preventing abuse, giving victims of the hurricane scrip that could only be spent at the US commissary (most are living on military bases) could prove effective. But such solutions evoke the abuses of the company-store era, and could be morally or politically objectionable.
Posted by: Dave Hoffman | Oct 18, 2005 5:13:55 PM
Despite the title of the posts, it does not seem like the concern over certain Katrina victim spending is really paternalistic in nature. That is, the concern here is not that some victims/benefits recipients are spending money on gambling/alcohol that they really need for food, as was discussed in connection with restricting the use of food stamps (e.g. to purchase of vegetables) in some states. (It may, in fact, be the case. But there does not appear to be evidence of this.)
Rather, the concern is that the victims/benefits simply do not need this money. As with all categorically defined benefits, the grants will constitute surplus income for some and they will natually spend it as such.
Paternalism would be a relevant organizing principle only if: (1) the recipients/victims really needed the $2000, (2) some were misspending the grants to their detriment, and (3) the government wanted, for the good of the recipients themselves, to constrain their discretion in how to spend the $2000.
Posted by: Thaddeus Pope | Oct 18, 2005 4:47:04 PM
Despite the title of the posts, it does not seem like the concern over certain Katrina victim spending is really paternalistic in nature. That is, the concern here is not that some victims/benefits recipients are spending money on gambling/alcohol that they really need for food, as was discussed in connection with restricting the use of food stamps (e.g. to purchase of vegetables) in some states. (It may, in fact, be the case. But there does not appear to be evidence of this.)
Rather, the concern is that the victims/benefits simply do not need this money. As with all categorically defined benefits, the grants will constitute surplus income for some and they will natually spend it as such.
Paternalism would be a relevant organizing principle only if: (1) the recipients/victims really needed the $2000, (2) some were misspending the grants to their detriment, and (3) the government wanted, for the good of the recipients themselves, to constrain their discretion in how to spend the $2000.
Posted by: Thaddeus Pope | Oct 18, 2005 4:46:30 PM
I saw on the news that a Katrina victim won 1.4mm at a casino. She was broke, so while I'm glad she is now rich, I wasn't pleased that she was in a casino. (Did she use a gov't issued credit card?) Anyhow, lawprof, I agree with you. I was against the credit card scheme, I don't like the tax treatment most 501(c)(3) corporations receive. (Ever watch TBN? Glad to know those hucksters aren't paying taxes.) I hate farm subsidies. And don't me started about the rich people in Malibu who chose to live on the ocean and whose risk of losing their property we taxpayers bear. See Confessions of a Welfare Queen.
So, my point is: What's your point?
Posted by: Mike | Oct 18, 2005 2:17:35 PM
I think that as the price to pay to get relief to the people who need it this kind of abuse is tolerable. There is no distribution system that is abuse-proof. The debit card solution was a pretty smart move, as it was minimally bureaucratic, didn't depend on people having access to bank accounts to cash cheques etc. Let's say you distribute aid in kind, or some sort of voucher that can only be used to buy food or gas or shelter or whatever. Unless you create very fancy safeguards, which itelf is costly and may create barriers to victims getting relief with the rapidity that you need it, vouchers etc. can also be abused, i.e. sold on the secondary market for cash or traded, well, . . . for the same kinds of services mentioned in this post.
While I'm on the subject of people wasting money trying to monitor that people spend money on what they should be spending it on, I've become increasingly annoyed by the kinds of expense documentation that law schools require when one goes to give workshops etc. and is trying to get expenses reimbursed. I don't have the time to worry about saving bording passes, and which kind of e-ticket receipt they like the look of. By contrast, a financial institution to which I consult has its travel and finance people calculate a lump sum amount that they think is reasonable for my travel expenses and I get the lump sum, regardless of what I actually spend and on what. This is much more sensible. It saves person-hours on both sides. I suppose it gives me the opportunity if I wanted to use the funds for immoral activity (I do have a weakness for Bordeaux wine!) but as long as in the long run there are cost savings, that's more important, right?
Posted by: Rob Howse | Oct 18, 2005 1:46:12 PM
Sorry, I meant to say "the prior commenter" (i.e., the guy who 1posted as "lawprof") at the beginning of my second paragraph....
Posted by: Scott Moss | Oct 18, 2005 1:19:58 PM
I like the last paragraph: the media use their resources poorly... in investigating others using their resources poorly. The case for a benevolent despot grows stronger!
The serious point the prior blogger makes is this: sometimes, I think we're only bothered by "waste, fraud, and abuse" in programs we never liked in the first place. Conservatives complain about welfare fraud and lack of personal responsibility (i.e., wasteful choices by the poor); liberals complain about corporate fraud, wasteful military spending, etc. Whenever I hear a "waste/fraud/abuse" argument, I do a mental check of whether it's just anotehr way the author is just bashing a gov't program (or an entity, like a corporation) s/he would be complaining about even absent thee waste/fraud/abuse....
That said, I'm not necessraily disagreeing with Dan. There's an argument taht paternalism is more justified when the people we're trying to help are in exteremely stressful/traumatic situations, because they're in a less cost-benefit-calculating mindset, perhaps more drawn to a release or a way to forget their troubles.... I'd have to think harder about whether I would buy this argument sufficiently to be against the Katrina credit cards, but it's worth mulling over.
Posted by: Scott Moss | Oct 18, 2005 1:18:11 PM
Hey, has anyone noticed all those rich people who are kept rich by MY TAX SUBSIDIES, and who keep wasting money on pricey wines, yachts, call girls and the like?
if we're gonna get upste about publicly subsidizes waste and decadence, there might be some other places to start.
Posted by: lawprof | Oct 18, 2005 12:21:52 PM
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