One Man’s List of Government Disasters

January 9, 2012

For immediate release (792 words)

As want-to-be hippies of the Baby Boom now leaning toward a classical liberal persuasion, my generation has its weak moments. There are times we look to government for an answer.

On hurried grocery trips, for instance, I have found useful the federally mandated “total carbohydrates” line item on food labels. And watching college bowl games, it has occurred to me that inanity alone justifies imprisoning those who interview coaches or players.

For such moments, friends have helped me gather a collection of six favorite governmental disasters — excluding, for lack of storage, any wars (martial, social or political). I keep the list handy these days.

1. The Central Canal — As a Hoosier, the premier place in my collection must be reserved for Indiana’s Mammoth Internal Improvements Act of 1836 It allowed our state government to get into what was then the high-tech business of canal-building. It’s a short story but typical: The only part of the imagined Central Canal of Indiana that actually functioned was an eight-mile stretch closest to the center of political power. And by 1841, the state couldn’t pay the interest on its internal debt and went bankrupt. (The Indiana Policy Review, pp. 17-21, winter 2008.)

2. The Fort Wayne Bypass — A multi-generation exercise in community-wide shortsightedness, the so-called Fort Wayne bypass (Coliseum Boulevard) was overrun by growth almost before completion in 1952. Clogged with stop lights, it now confuses cross-town traffic, circumscribing little more than the downtown area. A prominent Fort Wayne businessman told the story of receiving a visit from a delegation of Fort Wayne civic “leaders” in the months after World War II. They wanted his support for the bypass route. When he withheld it, one reminded him of a promise to support the route when the war was over. The businessman explained that he had made that promise during World War I.

3. The Cincinnati Subway — An object lesson for Mayor Greg Ballard and his Indy mass-transit boosters, the subway system in neighboring Ohio was a work in progress for almost two decades or until 1946. Cincinnati began digging tunnels for the $12-million subway despite the fact it had only $6 million in the budget. It completed the tunnels but didn’t have money for the trains. The system now reportedly costs $2.6 million a year to maintain in its emptiness.

4. The Kansas City Storm-Drainage System — A sentimental favorite, the storm-drainage system is a case of poetic justice in its fullest literary sense. The system of viaducts built in the 1920s by Tom Pendergast’s Ready-Mix Cement Company, reportedly six feet deep in places, helped finance four decades of machine corruption. In 1977, a few years after the last Pendergast died, a freak storm dumped water in just the right place for the viaducts to reroute a creek through the Country Club Plaza. The posh shopping area was frequented by many of the prosperous businessmen who had formed the “good government” clubs that ran the Pendergasts out of City Hall. The resulting flash flood killed 25, some of them in restaurants and bars with persons other than their spouse. It is remembered by the irreverent as “Pendergast’s Revenge.” (The Indiana Policy Review, pp. 17-21, winter 2008.)

5. The Haitian Earthquake — Earthquakes of Haitian-like intensity do not necessarily kill 316,000 people. A similar 1994 southern California earthquake, by contrast, killed less than 100 people. The difference is that the Haitian government doesn’t understand or doesn’t care about the life-saving nature of private property. It is estimated that 68 percent of Haitian city dwellers and 97 percent of their rural counterparts live in housing for which no one has clear legal title. That is because it takes virtually a lifetime to obtain government permission. “The resulting shabby construction won’t cause earthquakes, but it’ll make earthquake-related damages more extensive, even fatal,” observes an economist at Ball State. (The Indiana Policy Review, pp. 4-5, winter 2010.)

6. American Indian Reservations* — My last is an amalgam of the others, a working model of what Barack Obama envisions for us all. Unpaid debts on some reserves may have to be pursued in tribal “national” courts or even internationally so, predictably, loans are difficult or impossible to get. The great number live on meager per-capita checks from their tribes’ trust funds — that and government aid. A former chief, Manny Jules, explained the situation to Forbes Magazine: “Markets haven’t been allowed to operate in reserve lands. They’ve been legislated out of the economy. When you don’t have individual property rights, you can’t build, you can’t be bonded, you can’t pass on wealth. A lot of small businesses never get started because people can’t leverage property (to raise funds).”  And, yes, Congress votes $2.5 billion a year to keep this one perpetual.

* The Battle of the Little Bighorn — We include this as an asterisk because it is based on a theory, albeit a good one. The government’s inability to tally things correctly may be the difference between chasing Native Americans and being surrounded by them — disastrously so. Two Ball State University professors, James McClure and T. Norman Van Cott, likely have solved the mystery of Custer’s Last Stand. And they did it without leaving their offices in the economics department.

Writing in the Journal of Economic Education, the two note that a primary source of military intelligence for the U.S. Army in 1876 was the count of Native Americans on reservations. Logically, the more warriors on the reservations should have meant fewer out on warpaths. “But who counted the Indians?” the professors wanted to know.

The answer, according to a respected historian of the battle, Evan Connell, was government agents — agents paid by the number of Native Americans they counted, a systemic error that would cost General Custer and his men their scalps:

“Connell reports that reservation agents’ salaries varied directly with reservation populations. This provided an incentive for the agents to overstate the count. In Connell’s words, ‘ . . . an agent foolish enough to report a decrease in population was taking a bite out of his own paycheck.’”

The agents reported 37,391 Native Americans on reservations before the battle but a count afterward could find only 11,660. It is reasonable to believe, therefore, that Custer thought he was running to ground a relatively small party of warriors when in fact he was about to be surrounded by what may have been three times as many.

You believe what you wish, but it this opinion that George Armstrong Custer was not done in by the white man’s arrogance or even incompetent or jealous senior officers, two of the more popular explanations. He was killed by a self-serving bureaucracy within his own government.


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