Rebuilding Joplin

Economic Freedom has a story about the rebuilding of Joplin, Missouri after last year’s devastating tornado.

Daniel J. Smith, economics professor at Troy University, studied the rebuilding of Joplin, Missouri in the months following the tornado. The following video discusses how economic freedom can help areas recover from natural disasters. Says Smith:

I think one of the key factors in the recovery process in Joplin, from the tornado, is that the government officials allowed the community to start rebuilding itself. I think Joplin is a great example of the power of people — free people — coming together and both using profit motive, in the businesses, using religious reasons for faith-based organizations, and just concern for your fellow man, in the community-based organizations, to rebuild a disaster stricken community.

In the video, Smith explains that rising wages — sometimes increasing over 500 percent — were strong market signals that certain types of labor were needed in Joplin. If these prices for labor were controlled through government regulation, the price signals would not be heard by the needed laborers. Yes, governments and news media might let the country know that these types of workers are needed in Joplin. But unless workers can earn high wages in Joplin, what motive do they have to leave their current homes and travel to Joplin?

The price system — operating in markets free from government regulation — proves again to be the most efficient way to allocate resources to where they are most urgently needed and valued.

3 Comments

  • Anonymous -

    Of course a billion dollars or so of federal help helped fuel higher wages.

    “In the aftermath of Sunday’s devastating tornado in Joplin, Mo., a key House panel has approved a $1 billion aid package to make sure federal disaster relief accounts don’t run out before the end of the budget year in September.”

  • Compare the re-build with Greensburg, KS where the money almost entirely seemed to come out of government funds. It certainly helped that this community had a politically correct name where anything with the word “green,” in it becomes worth its weight in federal government gold.

  • You have to look at that so called billion dollars in aid and supply-demand theory of economics. First, the Joplin community was on the ground moments after the storm passed, establishing communication through Facebook Twitter. They raised the bar for FEMA to even be effective. A large portion of the billion was making all volunteers be counted through FEMA in order to give them credibility and taking insurance cleanup money from home owners with rights of entry forms. Much of the billion was imaginery, with professional cleanup contractors that follow FEMA running up the bill. Joplin proved the Government will not save you but they will delay you in recovery. The second part to the labor cost is many blue collar laborers were affected by the storm in one way or another, so loosing even 25% of skilled labor puts a strain on supply. The real kicker was vast devastation of utilities, infrastructure, and access restricts your time frame of recovery. When all utilities are restored, your backlog of permits flood the market at the same time which overloads supply and demand. Time is a critical factor to restore home owners or loss of population is inevitable. This example would be Greensburg who loss major population due to green controlled building and tax increases. Joplin homeowners that are back will see this with the loss of tax revenue that may never return and Federal money to restore schools that require money past through big management union companies that will hire outside the state labor market. The local economy does not benefit with these parameters.

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