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Supply Chain: How Wal-Mart Beat Feds to New Orleans
CIO Magazine ^ | November 1, 2005 | BEN WORTHEN

Posted on 11/13/2005 8:05:37 AM PST by John Jorsett

The hurricanes that flattened the Gulf Coast in August and September tested corporate logistics and supply chain operations, as companies struggled to move relief supplies and inventory to and from the region before and after each storm. One lesson from these storms is that having procedures for communicating quickly about what needs to be done is as essential for companies as having integrated inventory and logistics systems.

"Resilient companies communicate obsessively," says Yossi Sheffi, director of the MIT Center for Transportation and Logistics.

Wal-Mart, for example, was able to move food, water, generators and other goods to areas hit by hurricanes Katrina and Rita following each storm because it has an emergency operations center that is staffed every day around the clock by decision-makers who have access to all of the company's systems.

Under normal circumstances, a six- to 10-person staff at the center responds to everyday emergencies, such as a fire in a store or a shooting outside one. When disasters such as hurricanes threaten, the staff is joined by senior representatives from each of the company's functional areas, says Jason Jackson, Wal-Mart's director of business continuity. The center is equipped with hurricane-tracking software, and on Aug. 24, days before Katrina made landfall, company managers were already planning their response.

The emergency response team works in a large, open room that is designed with efficient communication in mind. When a district manager calls from the field to tell the operations manager in the center that he needs 10 trucks of water, the operations manager can turn to the person manning the replenishment systems.

The replenishment manager then checks his supplies. "He says, 'I can get you eight [trucks] today and two tomorrow,'" says Jackson. "He then tells the logistics guy. This all takes place in a matter of seconds."

As a result, Wal-Mart trucks were distributing aid to Katrina's victims days before federal relief arrived. During a less destructive hurricane, Wal-Mart ships between 200 and 400 containers of goods for sale or relief. In the first two and a half weeks following Katrina, Wal-Mart shipped 2,500 containers to the region and delivered another 517 containers post-Rita. Wal-Mart also set up satellite links for its stores that lost phone or Internet service so that they could stay connected to headquarters; Wal-Mart stores in areas that were without power for weeks were able to keep generators in stock.

Starbucks was also able to get aid to hurricane-ravaged areas quickly. When the company got a request from the American Red Cross to donate coffee, managers at headquarters contacted the company's distributors to discuss how they could help. Starbucks determined that it could donate 30,000 pounds of coffee, 235,000 bottles of water and 44,000 pastries without affecting supplies to its retail stores. Efficient communication also helped many companies avoid losing goods in the storm. MIT's Sheffi notes that GM was able to contact its dealers in New Orleans about moving their inventory out of the city and then sent car carriers to pick up the vehicles.

Sheffi says the long-term implications of this year's hurricanes will be that companies will now pay more attention to building redundancy and flexibility into their logistics operations. Companies that can communicate quickly are well positioned to weather any storm.


TOPICS: Business/Economy; Editorial; US: Louisiana
KEYWORDS: fema; hurricanes; katrina; rita; walmart
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1 posted on 11/13/2005 8:05:37 AM PST by John Jorsett
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To: John Jorsett

Showing once again that government is the problem, not the answer.


2 posted on 11/13/2005 8:12:23 AM PST by dsc
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To: John Jorsett

Thanks for posting this.

This shouldn't surprise anyone.

FEMA should hire Walmart, Home Depot and Lowes to handle the acquistion of emergency food/water/materials and the transportation of these needed items to disaster areas.

Then, FEMA can hire the Salvation Army to distribute what is needed to the needy. Keep the Red Cross out of this. We saw their greed post 9/11.

Then, we can donate to the providers or the Salvation Army and eliminate all of the greedy paws that show up after any disaster like Jihad Cindy's group of pseudo vets.

Last but not least to really frost the left wing, Haliburton should be hired as the overall Project Manager in damage control, clearing and rebuilding.


3 posted on 11/13/2005 8:17:49 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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To: John Jorsett
Wal-Mart pays attention to the slightest details. This is why they are so successful.

Case in point: I recently cleaned out the Wal-Marts in my local area of Duck brand mounting tape (the removable kind).

I bought the entire inventory of this tape in the stores in Hudson NH, Chelmsford MA, Tewksbury MA, Hudson MA, and Salem, NH.

This represents about $150 worth of tape. A tiny drop in the bucket with Wal-Mart.

Nevertheless, within a few days, the stores completely replenished their stocks of this tape.

4 posted on 11/13/2005 8:18:30 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: John Jorsett

Not really much *news* that succesful chain store operations have established, efficient transportation/ communication/ supply infrastructure that exceeds the capability of gov't organizations. Just a plain old fact.


5 posted on 11/13/2005 8:19:18 AM PST by elli1
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To: dsc
Showing once again that government is the problem, not the answer.

Ditto!

6 posted on 11/13/2005 8:21:44 AM PST by Fiddlstix (Tagline Repair Service. Let us fix those broken Taglines. Inquire within(Presented by TagLines R US))
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To: John Jorsett
GM was able to contact its dealers in New Orleans about moving their inventory out of the city and then sent car carriers to pick up the vehicles.

Given GM's current financial woes and slow sales, I'm sure that they now wish they had moved inventory into New Orleans prior to the hurricane!

7 posted on 11/13/2005 8:23:33 AM PST by Ronaldus Magnus
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To: John Jorsett

Great piece; thanks for posting it. One of the things that jumps out at me is that WalMart has decision makers in place to, well, make decisions. Compare/contrast with how the gubmint typically reacts: press conferences, blame shifting, finger pointing, demagogery. None of this is really all that difficult: identify the problem; decide how to react to it; execute.


8 posted on 11/13/2005 8:23:35 AM PST by nj_pilot
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To: John Jorsett

I was shocked at the positive press that a PBS show allowed for WalMart
on the "NOW" show (that Bill Moyers used to host).

The show had a townhall of hurrican evacuees and city, state and fed
officials at the PBS station in Baton Rouge.
The host (David Broncoccio?) allowed the mayor of one of the New Orleans
suburbs to loudly declare about how WalMart trucks were the first on the
scene in his city (Slidell?).
I was suprised that the host (and editors) allowed the mayor to give
such praise to the Evil Satan WalMart.


9 posted on 11/13/2005 8:24:00 AM PST by VOA
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To: SamAdams76
I bought the entire inventory of this tape in the stores in Hudson NH, Chelmsford MA, Tewksbury MA, Hudson MA, and Salem, NH.

So, you are trying to corner the market on duct(duck) tape, eh? I will keep a close watch on duct tape futures to see how successful THIS venture will be.

10 posted on 11/13/2005 8:28:22 AM PST by BipolarBob (Yes I backed over the vampire, but I swear I looked in my rearview mirror.)
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To: dsc

Yeah, I wonder if it took a 18 month $1 billion research and planning commitee for these companies to deduce the most effective method for dealing with the logistical problems of dealing with disasters that effect their business?


11 posted on 11/13/2005 8:28:59 AM PST by CBF ('' .... behind every blade of grass.'')
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To: John Jorsett

WalMart bump!


12 posted on 11/13/2005 8:30:08 AM PST by Salvation (†With God all things are possible.†)
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To: Grampa Dave; John Jorsett

Great article.

Grampa dave - you have some really great ideas.........too bad no one who should be thinking along those lines will.

*SIGH*


13 posted on 11/13/2005 8:30:43 AM PST by Gabz
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To: dsc

Another key point not said is that WalMart is a business, in business to make money. The US government is in business to spend taxpayers money, nothing else.


14 posted on 11/13/2005 8:31:29 AM PST by caver (Yes, I did crawl out of a hole in the ground.)
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To: Grampa Dave

**FEMA should hire Walmart, Home Depot and Lowes to handle the acquistion of emergency food/water/materials and the transportation of these needed items to disaster areas.

Then, FEMA can hire the Salvation Army to distribute what is needed to the needy**

Excellent suggestions! I would add 'and Catholic Charities' to the Salvation Army, however.


15 posted on 11/13/2005 8:31:58 AM PST by Salvation (†With God all things are possible.†)
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To: BipolarBob

It's not like that at all. I use this particular tape to decorate my house at Christmastime. I hang a large amount of lights throughout my house (floor to ceiling) this time of year. It's the only tape out there that doesn't peel paint and wallpaper when you remove it. And my kids and I hang over 150 strings of lights (no kidding).


16 posted on 11/13/2005 8:32:44 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: John Jorsett

BTTT


17 posted on 11/13/2005 8:33:16 AM PST by SweetCaroline (PARENTS & GRANDPARENTS IN CA JUST ABORTED THEIR FAMILY!!!)
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To: Grampa Dave
FEMA should hire Walmart, Home Depot and Lowes to handle...
Then, FEMA can hire the Salvation Army to distribute...

Why should FEMA "hire" organizations that are already doing this work anyway?
Federal funding always has strings attached...
Seems to me we'd be better off if FEMA DOESN'T "hire" them.

18 posted on 11/13/2005 8:35:13 AM PST by Willie Green (Go Pat Go!!!)
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To: SamAdams76
It's the only tape out there that doesn't peel paint and wallpaper when you remove it

Thanks for that tip!!!!

19 posted on 11/13/2005 8:36:39 AM PST by Gabz
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To: VOA

Slidell is NOT a suburb of New Orleans. We are 35 miles away in a different parish.


20 posted on 11/13/2005 8:37:23 AM PST by Kirkwood
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To: Gabz

You will find it in the paint section of Wal-Mart. There are three places in Wal-Mart where there is tape and this is the only section with that particular tape. Do not get the "Permanent" type. It must say "Removable" on the packaging.


21 posted on 11/13/2005 8:41:50 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: SamAdams76
Exactly, however my local Home Defect is terrible at stock replenishment. Months can pass by until a particular item is restocked.

I figured they are losing thousands of dollars in sales in this one store alone.

Aisles are continually blocked with goods. Shelves are mismarked, poorly stocked, out of stock. And don't get me started on the cashier situation. LOL
It's amazing how a national chain allows these conditions in one of it's stores.Somebody is asleep at the switch.
22 posted on 11/13/2005 8:42:16 AM PST by headstamp
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To: CBF

"Yeah, I wonder if it took a 18 month $1 billion research and planning commitee for these companies to deduce the most effective method for dealing with the logistical problems of dealing with disasters that effect their business?"

I'm betting three meetings over lunch at Hooters.


23 posted on 11/13/2005 8:43:19 AM PST by dsc
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To: SamAdams76

I will remember that. And believe me, I am VERY familiar with the paint department at WalMart!!!


24 posted on 11/13/2005 8:45:18 AM PST by Gabz
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To: headstamp
Funny you write that. I was in Home Depot just this morning and I have the same experiences. There is just no logical layout to shelving goods. I went in there to buy a staple gun and was ready to walk out of there when some helpful employee actually knew where they were. They weren't with the rest of the hand tools but were next to the thermometers (?).

The only saving grace there is self-checkout. Otherwise I'd probably be still standing there in line.

25 posted on 11/13/2005 8:47:19 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: SamAdams76
I recently cleaned out the Wal-Marts in my local area of Duck brand mounting tape (the removable kind).

I bought the entire inventory of this tape in the stores in Hudson NH, Chelmsford MA, Tewksbury MA, Hudson MA, and Salem, NH.

What exactly are you up to???

26 posted on 11/13/2005 8:47:40 AM PST by operation clinton cleanup
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To: BipolarBob

You are not keeping up with the tape industry. The duck corporation bought out the duct tape division of Loctite corp, and renamed the entire line "DUCK TAPE". It is true, now anytime you use the phrase "DUCK TAPE", you are using a brand name.


27 posted on 11/13/2005 8:48:19 AM PST by Lokibob (Spelling and typos are copyrighted. Please do not use.)
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To: Kirkwood

The home of Champion Trailers.


28 posted on 11/13/2005 8:48:53 AM PST by headstamp
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To: Gabz
Here's what the package looks like


29 posted on 11/13/2005 8:49:40 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: SamAdams76
hang a large amount of lights throughout my house (floor to ceiling) this time of year. It's the only tape out there that doesn't peel paint and wallpaper when you remove it. And my kids and I hang over 150 strings of lights (no kidding).

Awesome! You are a great American!

30 posted on 11/13/2005 8:50:16 AM PST by operation clinton cleanup
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To: SamAdams76

You're amazing!!!!


31 posted on 11/13/2005 8:51:39 AM PST by Gabz
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To: John Jorsett

Lesson: FEMA should have contracted Wal-Mart to get supplies into the region. Then let Guardsmen move the goods from the nearest Wal-Mart to the front lines.

No huge surprise here. Wal-Mart trounces competitors almost entirely because of the efficiency of its "just in time" supply chain. They don't keep a lot of inventory in warehouses, and they don't let the shelves go empty. They balance shipments from one place to another so their truckers rarely have deadhead runs.


32 posted on 11/13/2005 8:56:33 AM PST by ReignOfError
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To: Grampa Dave
"FEMA should hire Walmart, Home Depot and Lowes to handle the acquistion of emergency food/water/materials and the transportation of these needed items to disaster areas."

Got it in one. It would be incredibly expensive for FEMA to set up an entirely separate chain of communication and warehouses "just for emergency situations", which is the likely government response. But that is undoubtedly exactly what the Democrats will suggest.

33 posted on 11/13/2005 8:57:27 AM PST by Wonder Warthog (The Hog of Steel)
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To: BipolarBob
Duck Products














34 posted on 11/13/2005 8:57:33 AM PST by Lokibob (Spelling and typos are copyrighted. Please do not use.)
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To: BipolarBob; SamAdams76
So, you are trying to corner the market on duct(duck) tape, eh?

Hey, I'm not going to miss the boat on this one... I just bought the last 2371 rolls of duct tape here in Vegas. I'm finally going to get rich!

35 posted on 11/13/2005 8:58:26 AM PST by CommandoFrank (Peer into the depths of hell and there you will find the face of Islam...)
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To: John Jorsett
Under normal circumstances, a six- to 10-person staff at the center responds to everyday emergencies, such as a fire in a store or a shooting outside one. When disasters such as hurricanes threaten, the staff is joined by senior representatives from each of the company's functional areas...

What? Six to 10 people staff? They're kidding, right? Gotta be... Or, or, or, we're paying "Homeland Security" / CIA / State Emergency Teams, etc., waaaaaaaay too much money for staffing. No bang for our buck. Colossal waste of money. Zip protection for many dollars...

36 posted on 11/13/2005 8:58:50 AM PST by GOPJ (Frenchmen should ask immigrants "Do you want to be Frenchmen?" not, "Will you work cheap?")
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To: operation clinton cleanup
Maybe I'll get around to posting some pictures of the inside of my house after I'm done. There are many eccentrics who go "Chevy Chase" decorating the OUTSIDE of their home. I think that's fine and I love driving by those homes at Christmastime. But I focus on the inside of my house. I rationalize that I go through all this work so that my family and I can enjoy this without having to go out in the cold.

So what we do is we cover every common room in white lights from floor to ceiling. I run lights all around the baseboard, the windows, doorways and then along the ceilings. We then put mult-colored lights in the bedrooms and bathrooms.

It is such light that from Thanksgiving to Super Bowl Sunday (the weekend that I take them all down), that you don't need to turn on a single overhead light or lamp in the house. This helps offset the electricity bill.

It also enables us to spread out the Christmas season and it gets us through the darkest days of the year in good cheer. No light deprivation depression in this household!

37 posted on 11/13/2005 9:04:38 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: John Jorsett

"...because it has an emergency operations center that is staffed every day around the clock by decision-makers who have access to all of the company's systems. "

FEMA has basically the same thing. I've seen their EOC in Atlanta. Very impressive. The biggest difference to Walmart is that FEMA doesn't have any control of the distribution process. They must rely on outside sources which greatly vary in dependability. They can request resources, but they have no way to control the response. This is why the military does so much better than FEMA. The military, like Walmart, control their own resources and the distribution of them.


38 posted on 11/13/2005 9:06:15 AM PST by Kirkwood
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To: Salvation

Catholic Charities do a great job. Many of our Episcopal priests sought out priests who lost their churches and many if not most members lost their homes.

Our priest has been working with a priest in coastal Alabama. His church was destroyed to the foundation and most of the members of his church lost their homes. We have raised about 25k for this priest to use to help his members.

We are starting to send gift cards from Home Depot, Lowes, Walmart and Target for Thanksgiving, the Holidays and whatever. We get the gift cards and drop them off at our church office. They are then mailed to the priest (we are renting a trailer for him as his church office). Then he distributes the cards to his parish members as needed.

Up to now we have sent blankets, clothes and other items along with the cash. A volunteer nurse, not from our area, worked in this town and with this priest. Last Sunday she
visited our church to personally thank us for what we have done.


39 posted on 11/13/2005 9:07:18 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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To: SamAdams76; All

40 posted on 11/13/2005 9:09:09 AM PST by BenLurkin (O beautiful for patriot dream - that sees beyond the years)
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To: SamAdams76

Sam I have to ask, do you spread out your electric bill over 12 months or do you take out a second mortgage to pay your bill?


41 posted on 11/13/2005 9:09:11 AM PST by Kirkwood
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To: elli1
Not really much *news* that succesful chain store operations have established, efficient transportation/ communication/ supply infrastructure that exceeds the capability of gov't organizations.

Trust me....it shocks the left to see things like this as it does does to find out that more guns equals less crime and, as the Time Magazine cover revealed..."Men and Women are different".

42 posted on 11/13/2005 9:09:36 AM PST by eddie willers
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To: Wonder Warthog

If FEMA did what I suggested, they wouldn't to buy and inventory material and emergency supplies.

The could just order what was needed from these companies and pay them to deliver the material. There would probably be a good discount if the Salvation Army, Catholic relief charities and local churches handled the distribution to those who are in need.


43 posted on 11/13/2005 9:10:54 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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To: SamAdams76
It also enables us to spread out the Christmas season and it gets us through the darkest days of the year in good cheer. No light deprivation depression in this household!

When I was growing up, we always had more lights up inside than outside. When it gets dark out at 5pm, it sure is nice to come home to a house full of lights!

44 posted on 11/13/2005 9:14:58 AM PST by operation clinton cleanup
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To: GOPJ

Private enterprise is ALWAYS the way to go. Once the government gets involved, you can bank on inefficiency and corruption.


45 posted on 11/13/2005 9:17:46 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: VOA

You can give credit to WalMart if you can attack the administration in the same sentence. For example, "THey were so slow providing aid and relief that *WALMART* beat them there!!!"


46 posted on 11/13/2005 9:19:07 AM PST by Tanniker Smith (By defiintion, we cannot have Consensus until you agree with me.)
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To: Kirkwood
I pay about $100 a month from February to October. From November to January, I pay $300 a month.

To me, it's worth it!

47 posted on 11/13/2005 9:19:16 AM PST by SamAdams76 (What Would Howard Roarke Do?)
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To: SamAdams76

I will buy some Duck Tape at my local Walmart tomorrow.

Thanks for the tip. We just spent a bundle repainting the exterior of our home and many rooms inside. We have boxes of electric lights and other decorations, and my trophy wife was looking at more the other day.

We, also, use duct tape on the back of picture frames and paintings to keep them from moving around during and after earthquakes, we don't even feel.

Everytime we call the painter back to touch up or to redo damage, he and my wife find something else to paint. His last touchup visit cost me $600 and they have more planned for after the holidays.


48 posted on 11/13/2005 9:19:25 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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To: Willie Green

"Why should FEMA "hire" organizations that are already doing this work anyway?
Federal funding always has strings attached...
Seems to me we'd be better off if FEMA DOESN'T "hire" them!"

That is all ways a concern re government. I don't know how to get around this aspect. The less the federal and even the state governments are involved (sometimes cities like New Orleans), the better off we are as taxpayers and the end receivers.


49 posted on 11/13/2005 9:22:37 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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To: caver

"Another key point not said is that WalMart is a business, in business to make money. The US government is in business to spend taxpayers money, nothing else."

Amen! Thanks for this excellent Sunday Sermon.


50 posted on 11/13/2005 9:24:20 AM PST by Grampa Dave (MSM/RATs need to set a timetable for withdrawal in their illegitimate war on Bush. It's a quagmire.)
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