Why is America falling apart? Ask Ayn Rand

(Fortune) -- It was the breaking-news headline last Friday that three construction workers had died in a coal-mine accident in Princeton, Ind., and maybe the markets melting down too, that congealed in my mind a thought I'd been kicking around for a while now: Our country is having an "Atlas Shrugged" moment.

Trapped coal miners in Utah, smashed levees in New Orleans, busted steam pipes and flooded subways in New York City, a collapsed bridge over the Mississippi River in Minnesota, an air-traffic-control system stressed to its break point. Could this really be a description of the most prosperous country on the planet? Can these all be coincidences? Is it time for a good old-fashioned conspiracy theory, the type that a reflection on Ayn Rand, Alan Greenspan's early mentor, might inform?

For sensible adults who haven't thought about Rand and her darkly fabulist novel in years, the thing to remember about "Atlas Shrugged" - other than the cloying mystery, Who is John Galt? - is that the country was disintegrating in front of the eyes of our various capitalist heroes. The rail lines in particular were in peril in this 1957 book, a turgid ode to selfishness nonetheless considered a masterpiece by Rand's followers, who call themselves Objectivists.

In "Atlas Shrugged," society was falling apart because the elites - read: socialists - weren't allowing the markets to function. A drumbeat of deadly railroad accidents punctuated and emphasized the calamity.

Cut to the present. Barely a day goes by that some disaster or another doesn't strike, usually having nothing to do with any natural act. The Indiana accident turned out to be just that, construction workers who fell which, tragically, happens from time to time, in good times and bad.

But the levees? After much consideration the U.S. Army Corps of Engineers has now fessed up to its responsibility for poor construction and maintenance over decades. When I was in New Orleans in July I heard a story about a levee that didn't fail. It is operated by Lockheed-Martin (Charts, Fortune 500) at a plant that makes fuel tanks for the Space Shuttle. Workers braved Hurricane Katrina and operated pumps during the storm. The privately operated - but government financed - levees held.

I happened to be in New York last week the day the subways flooded. According to New York Gov. Eliot Spitzer, it's the third time this has happened in seven months. The New York subway has been pumping water out of its tunnels for a century. Why are downpours disabling New York City now? Likewise the bridge collapse in Minnesota. Accidents happen, but it's inconceivable that such a major thoroughfare in a major city wouldn't be thoroughly and regularly stress tested.

What's causing all this? Could it be the reverse of the "Atlas Shrugged" effect? Might it be that greedy capitalists, comfy in their private jets and third, fourth and fifth vacation homes, aren't paying attention to the national infrastructure that they don't think they need to use?

As for the political leadership, infrastructure spending is one of those rare instances where President Bush's take is spot-on correct, though his words likely won't be heeded because he is so unpopular and divisive. (The immigration debate, where the president has been pragmatic and right from the beginning, also comes to mind.) Asked if gasoline taxes should be raised to pay for infrastructure improvements, the president chastised Congress for favoring attention-getting new projects over boring maintenance needs.

He's right. Liberals like Chuck Schumer agree. "Routine but important things like maintenance always get shortchanged because it's nice for somebody to cut a ribbon for a new structure," Schumer recently told the New York Times.

Today's Randians, of course, have an answer to our woes: Privatize everything. No way a bridge falls if a profit-seeking company, properly incentivized, had been charged with maintaining it, goes the argument. That, however, is dangerous thinking. There are certain things the market just can't be trusted to handle. Imagine that bridge-maintenance company having to cut expenses this quarter by delaying work for just a few days. Imagine how the CEO might feel if the stock would drop if he couldn't make the quarter.

The markets don't always work for the public good. Just ask CEOs of mortgage lenders that pushed no-documentation loans, which anyone with common sense knew was just asking for trouble. The solution isn't to abolish government. It's to make government work better.

We'll get through this. We always do. As a country we'll become outraged at our crumbling infrastructure and demand that our leaders fix it. By punishing their stock prices - what they really care about - lenders and home builders who duped people into spending beyond their means will get their comeuppance. And then the stocks markets and the economy will be just fine. Plutocrats will realize that their limos travel over bridges and that their employees take the subway.

Who is John Galt, anyway?