All governments, whether federal, state or local, play an important part in crisis management. This may be among the most important functions of government. At all levels, government is involved in managing crises and disasters through the emergency services it provides. The federal government provides the service through the United States National Guard, with police and fire departments at the local level. All these organizations are directly involved in crisis management and crisis solutions.
The federal government has set up the Federal Emergency Management Agency (FEMA) to assist in coordinating communications during the crisis response period. FEMA is part of the Department of Homeland Security, and it oversees the National Response Plan (NRP). It is anticipated that the plan will integrate all public as well as private responses by ensuring standardized language and setting up a hierarchy of command to coordinate when several parties are involved. The philosophy is that incidents should be resolved at the lowest possible level of organization. The National Response Plan recognizes that the private sector, with its volunteers, is an essential component of working within the area of domestic local crises. This is mainly true in the region of critical infrastructure protection. The private sector knows and understands the local scene best and can be the first to respond.
Unfortunately, politics and crises go together. President Abraham Lincoln described life in government when he said that those in government live in the hub of alarms where anxiety is always present. They expect a new crisis with each new print run of the newspapers.
Crisis management is an everyday feature of modern government. When a crisis occurs, the public at large look up to their leaders to explain what is happening and to be able to minimize the effect of the crisis. Inevitably, critics and the political opposition will use the event as an opportunity to blame incumbent leaders and their policies for the crisis. It is very difficult for those in power to explain themselves in the light of criticism. Those who formulate policy must attempt to portray a sense of normalcy in the face of disaster.
During a crisis, leaders must cope with the strategic challenges they face and the political risks and opportunities that can come with the challenges. They have to cope with risks in the political arena as they try to cope with a crisis. They have to be cognizant of any mistakes they make, the failures and traps they must avoid and envision the route to get them and the country out of the disaster.
Good management is even more essential with modern technology, as 24-hour news stations and the Internet follow and report every move.
Public leaders have the duty to help keep society safe from any adverse consequences that may arise from a crisis. When leaders involve themselves in crisis management and take this accountability conscientiously, they will need to be involved in all phases of the crisis: the start, the duration and the aftermath. Leadership in crisis encompasses five critical functions: decision-making, making sense of what happened, deriving meaning from the event, putting an end to the crisis and learning from it.
Not all crises involve natural disasters, and not all government crisis management responses work. A case in point is the economic crisis of 2008. A well-intended market intervention that was meant to help low-income households in the United States own their own homes brought about the financial crisis. It was also partly brought on by regulations that discriminated against certain types of assets, resulting in the financial institutions creating off-balance-sheets in order to show artificial credit. Such factors led to lending to unworthy borrowers, which, in turn, fueled the housing boom. The eventual bust led to the value of those off-balance-sheets arrangements collapsing. Since those off-balance-sheets arrangements were used to justify the loans, their collapse led banks to cease lending to customers as well as to each other. Governments attempted numerous times to stem a total economic collapse and got involved in crisis management. They began intervening in the markets in order to bolster lending. It was largely counterproductive and contributed to the further wearing away of trust and weakened even more the incentive to lend.
Due to political infighting, the crisis management conducted by government is not always the correct approach. When governments fail in their crisis management, the public loses faith and trust in government and public officials.