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Friday, October 14, 2005

Katrina Reconstruction Should Suspend The Red Tape

Mickey Kaus writes about how Bush's suspension of the Davis-Bacon Act for reconstruction of the destroyed Gulf will be a boon to minorities who will gain a foothold into the workforce. The Act (yes, I have actually read it) forces the provision of government mandated "prevailing wages" upon any company contracted to perform just about anything, including clean-up at work sites.

Econ 101 explains how this reconstruction will create a massive demand for labor and will drive up the market wages, even for the unskilled. Bureaucratic over-sight will slow down the work and likely hinder small companies, start-ups and even the Halliburtons from getting the job done. The smaller companies will not have contract departments able to timely and correctly fill out the massive forms required by the Act. Thus, the bigger companies can get approved more quickly.

Additionally, if unions are required, then incompetents cannot be weeded out for more efficient use of taxpayer money. Writes Kaus:

Since when is it the goal of liberalism to preserve the wage inequalities that the even the market doesn't support? Plus Davis-Bacon...operates to exclude minority contractors. ... Better to just create lots of jobs, as fast as possible, and force employers to compete for everyone, raising wage levels generally (as happened at the end of the '90s).

An e-mailer experienced in construction explained:

Enforcing and implementing Davis-Bacon adds days, weeks, months to processes. Bush cut it because it makes sense. We'd still be in the preliminary stages of setting up contracts for reconstruction if Davis Bacon was in place, but now we can just go ahead and use the normal acquisition regs for those contracts.In other words, to get the contractors to work fast, you need to suspend Davis-Bacon.

Let the free market handle what government only botches up. Didn't red tape and poor bureaucratic (from top to bottom) decision-making help create the pre and post-Katrina debacle?

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