Wednesday, January 5, 2011

The one that got away in 2010

I update this blog a minimum of once every three days, and sometimes a news story falls through the cracks that I find myself telling friends about, but never punching into my keyboard. Each year I pick through the missed issues and events and find one that stands out. Last year was the economically-flawed "buy black" campaign.

The 2010 missed story was the South Fulton, TN fire department fiasco, which the left jumped on as a warning about privatization of government services and served as a proxy skirmish for the health care debate.

The popular narrative was that the Cranick family didn't pay its fire insurance bill and when the house went up, the private fire department showed up but refused to put out the flames, even after being offered any amount of money they wanted. They only got involved when it threatened to ignite a paying neighbors house. The image of this burned-out house, the left claim, is what a privatized America would look like.

So this is the part where I sling a few well-placed facts that turns everything upside down.

The real story is the Cranicks live in Obion County in a rural area outside of South Fulton. Residents in this area do not pay taxes to the city, and as such, do not pay for their emergency services and are not entitled to them. If you break your leg in Northern Michigan, Canadian paramedics are not expected to cross the border and help you. This is how government services work.

The city of South Fulton decided to offer fire protection in exchange for a $75 yearly fee for homes near the city. The Cranicks did not join this insurance program, and for them to receive normal fire service without penalty would be harmful to the residents of South Fulton and their neighbors who paid into the program. The problem was jurisdiction, not profits.

So far, the city had done nothing wrong. This was not privatization in any way, shape, form or figure - and that's why a problem occurred. Gene Cranick offered to pay the fire department a day-of fee for putting out the fire, and was refused. This bears no resemblance to how a private company would operate. They would have to offer already-burning rates - let alone potential loss of profits, failure to do so would be PR suicide.

Instead we saw government employees acting like government employees - refusing to help, complete apathy for the public and no apologies. Instead of the tactically-superior move of "no comment," South Fulton City Manager Jeff Vowell said:

I have no problem with the way any of my people handled the situation. They did what they were supposed to do. It's a regrettable situation any time something like this happens.
This incident was a perfect example of how incompetent government solutions can be. It was never a black mark against privatization because there were no privatized services involved, and it's sad to see it being used as a progressive fairy tale about capitalism.


  1. In the event that the still-burning rates were unaffordable, there would not be a practical difference between the two.

  2. Although I do support the animosity towards insurance companies that this story was used to stir up, it is, like you said, more of an example of lol jurisdiction fail. I don't mean that I want there to be private police and firefighting forces, but when these things happen it hurts my brain thinking of alternatives. What would the line be between extended jurisdiction and simply having a national force? And how does this hurt the residents who paid for the opt in fire protection? If the family wasn't in the department's jurisdiction, then how were the firefighters even able to show up in the first place?

  3. The problem I have is not one of economics but basic human dignity. People with the power to prevent harm, allowed harm to occur. Hiding behind regulations shows weakness of character. Money should never be a factor in determining the goodness we do for our fellow human beings. I don't know how many people can sit by and watch suffering happen when the means of preventing that suffering is in their hands. It's not a question of blame (his fault for not paying, gov fault for not reacting), it's a question about character and helping your neighbor in times of need.

  4. Why do people always assume that informal interactions would be unchanged, such as assuming that no charities would exist to help people pay for privitized costs? In addition, people assume there would be an unregulated monopoly (versus regulated monopolies like power companies). I'm not even advocating private fire departments, I'm just saying if they existed they wouldn't look like this.

    Johnson, I haven't found anything conclusive to say that the fire department arrived on the scene before responding to the second call, so I don't know if they did. The way this hurts the paying customers is, imagine if you paid for car insurance and then saw other people getting in accidents and THEN signing up and having it covered - you'd be a schmuck for paying for the service before you needed it.

    There can be a line between nationalization and sharing services. The area the Cranicks live in could agree with the town of South Fulton to pay for fire protection through taxes, either as insurance or for each service. Again, imagine the Canadian paramedics responding to an emergency in Northern Michigan. That department should be paid, either by the individual or the Michigan taxpayers. That was you don't have to, as Daniel put it, sit by and watch suffering happen.

  5. I've always failed to see why folks are surprised that people won't cater to their problems for free. I see absolutely zero logical, ethical or moral dilemma with allowing a house to burn down if the owners have not/could not pay for fire insurance (in a privatized America, of course). In this fictitious, privatized world, the cost of fire insurance would be included in the logical person's budget as part of the cost of owning a home. NOTHING is free...ever.

  6. "I see absolutely zero logical, ethical or moral dilemma with allowing a house to burn down if the owners have not/could not pay for fire insurance"

    How about a practical dilemma? Those who are generous tend to be more likely to experience reciprocity. I would save your house because your a friend, not because I want you to save mine if the same thing happens. That said, you're probably more likely to help me if I had helped you in the past.

    "Why do people always assume that informal interactions would be unchanged, such as assuming that no charities would exist to help people pay for privitized costs?"

    Because most major problems that draw the attention of charities aren't solved by the charities themselves. Speaking as someone who works in food-relief, charity is very limited and always will be. Only when people use government to wield grander resources, or when markets find a profitable solution do the problems cease. Do you know of any systemic issues that were solved by the nonprofit sector? I don't.

    Why do free-marketeers assume charities will grow in a libertarian world - a world where there's a strong emphasis on the "self."