Monday, June 13, 2005

The umpteenth failure of government charity

"Your tax dollars at work." "The fleecing of America." If I could paint, I'd create an image akin to the classical paints depicting Zeus carrying off Ganymede. I'd call mine, "The rape of the 9/11 Victims Fund."

The New York Post had this story yesterday:

June 12, 2005 -- Sept. 11 widow Kathy Trant has turned her Long Island home into a $2 million showcase, traveled from the Vatican to Las Vegas, blown $500,000 on shoes, and bought breast jobs for pals and even strangers.

In the 3 1/2 years since her husband, Dan, died in the World Trade Center attacks, she has burned through nearly all the more than $5 million she received in compensation and donations. She says she treated the millions "like Monopoly money."

The mother of three has become a self-described "shopoholic" - and her compulsive buying has left her with intense guilt, shame and sadness.
And this follow-up story today:

June 13, 2005 -- The daughter of a 9/11 widow who has burned through $5 million in victim compensation money is battling the same destructive shopping addiction as her mom.

Jessica Trant, 22, said she stays up all night buying clothes, designer handbags and other goodies online because she has suffered from insomnia since losing her dad on Sept. 11.

"If you're feeling upset, this stuff looks good — it makes you feel good inside because you're battling so many demons," she said.
Call it what you will, but this is an outright travesty. As with all successful scams, like the old saying goes, we the taxpayers might as well "kiss the money goodbye." Did we the taxpayers "donate" money to "help" the victims so that they can squander hundreds of thousands of dollars on designer shoes and handbags? Did we the taxpayers act "with charity" toward them so that they can fund boob jobs for friends and even strangers?

Private charity would have never failed like this. Or as I blogged about before, private charity would have never given Viagra to sex offenders, which Medicaid did. Private charity carefully scrutinizes each applicant, and it knows the temptation to squander one huge lump sum.

Update: before someone accuses me of being cold-hearted and callous toward the Trants, let me add this. Like most, I have grieved heavily for the 9/11 victims. Clearly no amount of money could replace Mr. Trant, but it is still wholly irresponsible for them to squander the money that we the taxpayers were coerced into giving them.

In the aftermath of the 9/11 attacks, ignorant of economics and the Constitution, I thought the federal "help" to the victims' families was a good idea. I thought that it was only right that "society" help them out. I reasoned, "Why not government, since it has the power?" Fortunately, I changed in the interim; I can't be sure when, but it was before graduating a year ago with my economics degree. The Keynesian-progressive path, espoused by a couple of my professors, touted the power of government. Another professor championed the libertarian path, which I eventually chose.

My error, I came to realize, was to confuse society with government. They're not the same, of course, but big government would have you believe otherwise (and many today do). Big government claims that it's merely "an agent of society" in taking money from most taxpayers money and giving it "charitably" to a relative few. Then when government "charity" fails, which it frequently does (most notably the War on Poverty), it excuses itself by claiming, well, at least it helped more people than private charity could have.

This is indeed fallacious. Russell Roberts quoted Bastiat, who wrote in The Law that if no law compels people to act charitably, "Does it follow that we shall then cease to associate with each other, to help each other, to love and succor our unfortunate brothers, to study the secrets of nature, and to strive to improve ourselves to the best of our abilities?" Of course not. People hardly need law to force them to do good acts, and Adam Smith expressed a great deal of optimism in individual charity:
How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it.
True charity is about extending a helping hand to truly deserving recipients, until they can support themselves; it's not about enabling a family to live more luxuriously than 99% of society. What about the widows and children who had a nice house but no life insurance, no income of their own, and no net worth apart from the house? Private charity would consider that, but it would also insist that the recipients live more frugally. True charity is about short-term assistance so that a widow can sell the expansive home and move the kids into a house they can afford. It's not about scaling benefits proportional to income so that the kids can still go to posh private schools and horseback riding lessons.

That paragraph is so obvious, isn't it? Then why do we persist with a government that does so poorly when acting "charitably"? Why did government give millions of dollars to millionaire families who already had tremendous wealth and generous life insurance policies?

I've linked to this before, but it's worth linking to again. What I especially appreciate about Dr. Williams is that his wisdom includes a deep understanding of the Constitution and our Founding Fathers.

Walter Williams: Not Yours to Give



Blogger TKC said...

Why does government botch charity so badly? You quoted the reason why on Friday. "As Milton Friedman said, "If I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. And that's government.""

You got designer clothes and boob jobs for strangers for you tax dollars as charity.

A friend told me once that one of the problems with government charity is how impersonable it has become. 'Entitlements' are something you are entitled to, as if it was yours for the taking. You no longer have to humbly go, hat in hand, to get charity. It is just a phone call and a government form away. No guilt involved. No failure involved. It is society's duty to protect you from these. And for all the good intentions that maybe involved, it is paving the road to hell.

Now this lady does feel guilty and she should. A lot of people worked very hard for what she got and she squandered it. I am saddened by her loss but not to the point of fleecing America.

Tuesday, June 14, 2005 4:14:00 PM  
Blogger Perry Eidelbus said...

I can't disagree at all. Since the bureaucracy doesn't ultimately pay for the government "charity," it only cares about appearing successful. Success isn't intrinsically bad, but bureaucrats want it only to keep their jobs. Whether they help the right people, or anyone at all, isn't their concern.

I wrote about those themes before:
What kind of privatization is this?

What did we really expect?

Tuesday, June 14, 2005 9:13:00 PM  

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