The tale of Gene Cranick’s house fire provides a fascinating opportunity to study the intersection of market economics and government action.  Cranick is a resident of Obion County, Tennessee, a rural area that does not have its own fire department.  Instead, residents pay a $75 fee for fire protection from the city of South Fulton.  Cranick decided not to pay this modest fee.  When his house caught fire, the South Fulton fire department refused to assist him, instead watching as the house burned to the ground.

Daniel Foster at National Review Online finds this episode an uncomfortable lesson in the perils of libertarian government:

I have no problem with this kind of opt-in government in principle — especially in rural areas where individual need for government services and available infrastructure vary so widely. But forget the politics: what moral theory allows these firefighters (admittedly acting under orders) to watch this house burn to the ground when 1) they have already responded to the scene; 2) they have the means to stop it ready at hand; 3) they have a reasonable expectation to be compensated for their trouble?

The outrageous image of firemen standing idly by and watching a home reduced to cinders, for want of a lousy seventy-five dollar fee, produces an immediate emotional response.  Couldn’t they have extinguished the fire and billed Mr. Cranick a hefty fee, as he begged them to do?

What sort of fee would we be talking about?  If the price ran into thousands of dollars, it is unlikely Cranick could have whipped out his checkbook and paid it on the spot.  The fire department might have put a lien on his house for the amount, but a lien is not the same thing as cash in hand.  In this new age of foreclosure and bankruptcy, it might take the fire department years to see their first dollar… and in an era when politicians compel banks to settle mortgages for a fraction of their value, the entire fee might never be collected.

In any event, a fire department certainly could not maintain its budget on the basis of huge liens on homeowner properties, after collection proceedings that amount to a high-stakes game of legal blackjack, played over months and years.

What if the contingency fee was more modest, say a few hundred dollars?  The department would stand a better chance of quickly collecting such a fee… but that would make the homeowners who paid the regular $75 fee into chumps.  Paying on an annual basis would make less sense than taking your chances and coughing up a couple hundred bucks in the unlucky event of a fire.  Once again, the firemen would be unable to run their department when its only income stream came on a contingency basis, paid after they were finished putting out fires.

A great deal of our economy has degenerated into chumponomics: a system that assumes people will act against rational self-interest, because it’s the “right thing to do,” or they just haven’t worked out the numbers.  Income tax returns are the perennial example.  Each spring, people dance with joy as they receive their tax refunds… which are nothing more than repayment of a loan they extended the government, for an entire year, at zero percent interest.  Some people plan their financial lives around those rebate checks.  They even request additional withholding from their paychecks to get larger refunds, using them as the world’s worst savings account.  It makes far more sense to owe a small amount at the end of the tax year, making the government give you that “loan” at zero percent interest, but many people are honestly confused by the idea that writing a check on April 15 is better than receiving one.

Our huge, rickety tower of entitlements and subsidies rests on a foundation of chumps, playing by the rules and funding a system that is increasingly less interested in their opinions about how much they should pay, or how the money should be spent.  Our federal wallet is stretched to the limit by illegal aliens getting welfare, food stamps, medical care and other benefits, often without paying taxes.  Safeguards like welfare and free medical care are in place to boost Americans in need of short-term assistance.  These programs were not meant to entice freeloaders and scam artists from around the world.  (Does that sound harsh?  Don’t blame me – the previous three sentences were spoken by Democrat Majority Leader Harry Reid in 1993, as quoted by Thomas Sowell in his most recent column.)

The understandable emotional response to the plight of Gene Cranick is exactly the kind of leverage politicians use to impose chumponomics on us.  It’s just not fair that the poor man’s house burned down while firefighters stood idly by!  But there are reasonable questions to ask, once we set emotions aside.  Why doesn’t Obion County have its own fire department?  Presumably it was more cost-effective to lease fire control services from South Fulton.  Why doesn’t Obion County tax its residents and pay South Fulton on their behalf?  Because it would cost a lot more than $75, once a typical government bureaucracy got involved… and you can bet that fire protection fee would quickly vanish into a morass of other taxes, blending into a bloated pudding that soon made it impossible for anyone to know how much they were paying for any given service.

Allowing its residents to pay a voluntary $75 fee to South Fulton was the most inexpensive and efficient means for Obion County to provide fire protection to its residents… assuming they acted like responsible homeowners, instead of crybabies and chumps.  If we expect maternal government to save us from ourselves in all circumstances, we had better be ready to pay the high cost of our day care.  Most of that bill will be footed by the dwindling number of people who remain productive and responsible, despite the absence of logical reasons to do so.

Cross-posted at www.doczero.org.

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