If I may paraphrase Adam Smith: "It is not from the benevolence of the people of Wal Mart or Home Depot that we expect our emergency relief supplies, but from their regard to their own interest".
Forecasters don't expect Hurricane Irene to make landfall until Saturday. But for nearly a week now, big-box retailers like Walmart and Home Depot have been getting ready.
They've deployed hundreds of trucks carrying everything from plywood to Pop-Tarts to stores in the storm's path. It's all possible because these retailers have turned hurricane preparation into a science — one that government emergency agencies have begun to embrace.
At Home Depot's Hurricane Command Center in Atlanta, for example, about 100 associates have been trying to anticipate how Irene will affect its East Coast stores from the Carolinas to New York.
At times like this, the Command Center looks much like NASA Mission Control during a shuttle launch, says Russ Householder, the company's emergency-response captain.
"We've got all the key news agencies on the big screens up front," he says. "We're also monitoring our store sales so we can better be in tune to what's happening in our stores, and we're also connected live one-on-one with district managers in the impacted areas."
In a hefty 218-page report, the Department of Homeland Security's inspector general writes that the federal government and FEMA received "widespread criticism for a slow and ineffective response to Hurricane Katrina."
Slow and ineffective are unfortunately near synonymous with big bureaucracies like FEMA, which is why I'm thankful for private responses.
I used to work as an assistant manager at Walgreens in Omaha, Ne. In 1988, the year before I moved to Omaha, a severe storm rolled through town and knocked out power (it produced a tornado across the river in Council Bluffs). The store manager at one of the stores had ordered some cheap, plastic flashlights - (remember the Eveready ones?) for an upcoming ad. After the storm knocked out power, he had a table display in the front of the store cleared of merchandise and he put a bunch of those flashlights on the display. He then priced the flashlights at $5 (they normally sold for about $1 back in the late 80's).
Was that a high price for those flashlights? Yes. Did some customers feel they were being taken advantage of? Almost certainly. But the market before the storm wasn't the same as that just after the storm. The demand for flashlights increased because of the storm and we'd expect the price of flashlights to also increase. All the manager was doing was responding as we'd expect any manager in any market to a demand increase. If he doesn't increase his price, he may run out of flashlights. That's not good for those who want to buy them but can't. It also doesn't make the store look good when they come on sale and the store is out.
Sure, the manager was only responding to the profit motive. So what? If not via higher prices, how is he supposed to determine who gets flashlights and who doesn't? And why is that way better? If I may once again paraphrase Adam Smith: "It is not from the benevolence of the Walgreens manager that we expect our flashlights, but from his regard to his own interest".
While some people might huff and puff about the motives of Wal Mart and Home Depot and Walgreen managers, I don't care much about the motives. What I want is results..