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Science Forum Index » Philosophy Forum » How Government Makes Disasters More Disastrous
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| Chronos |
 Posted: Wed Apr 30, 2008 5:20 am |
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How Government Makes Disasters More Disastrous
By Thomas A. Bowden
In a speech from New Orleans last week, Republican presidential candidate
John McCain lashed out at the Bush administration for its response to
Hurricane Katrina. McCain's remarks, which appeared calculated to make
disaster relief a key campaign issue, revived harsh memories of the savage
storm that inundated the Mississippi Delta in late August 2005, leaving more
than 1,800 people dead and causing widespread property damage.
Although the floodwaters long ago receded, government officials are still
counting the disaster's costs. Earlier this year, the U.S. Army Corps of
Engineers disclosed that 489,000 claimants are seeking damages caused by
poorly designed levees. Of those claimants, 247 want more than $1 billion
each, including one whopper for $3 quadrillion (a stack of a quadrillion
dollar coins would reach beyond Saturn).
The tax dollars spent resolving those claims will augment the tens of
billions already paid to restore and repopulate New Orleans, a
below-sea-level bowl situated precariously amidst a lake, a major river, and
a gulf, in a known path for hurricanes.
Disasters can sometimes shock a nation into questioning entrenched
practices. But Hurricane Katrina, perhaps the worst natural disaster ever to
befall America, has failed to spark serious challenge to long-standing
government policies that actively promote building and living in
disaster-prone areas.
The Katrina tragedy should have called into question the so-called safety
net composed of government policies that actually encourage people to
embrace risks they would otherwise shun--to build in defiance of
historically obvious dangers, secure in the knowledge that innocent others
will be forced to share the costs when the worst happens.
Without blaming the victims for having followed their own government's lead,
it is time to question whether those policies should continue.
The first strands of today's safety net were spun in the nineteenth century,
as the Army Corps of Engineers shouldered the burden of constructing and
maintaining levees and other flood controls along the Mississippi River.
From then to now, Congress and the states have responded to each new flood
by installing newer, higher, and stronger barriers at public expense, as if
the preservation of a city like New Orleans in its historical location were
a self-evident necessity.
Throughout the twentieth century, new strands were woven into the safety
net, first in the form of loans to disaster victims, then by direct grants,
infrastructure repairs, loan guarantees, job training, subsidized
investments, health care, debris removal, and a host of similar
rehabilitative measures.
In 1968, the National Flood Insurance Program began supplying subsidized
coverage for structures and their contents in flood-prone areas. Similar
state-subsidized insurance programs arose for hurricanes in Florida and
earthquakes in California. In 1978, the Federal Emergency Management Agency
was created to coordinate the increasingly complex job of government
disaster response.
At each juncture, more aid was funneled to disaster victims without serious
challenge to the wisdom of encouraging people to occupy vulnerable
locations.
In response to Mississippi floods, Florida hurricanes, and California
earthquakes, the number of major disaster declarations almost doubled from
the 1980s to the 1990s, from an annual average of 24 up to 46. At century's
end, Congress was paying an average of $3.7 billion a year in supplemental
disaster aid, with state taxpayers contributing many millions more. As of
August 2007, Katrina relief alone had cost federal taxpayers $114 billion.
By gradual steps, this disaster safety net became part of the legal
landscape, taken for granted by private investors and owners deciding to
undertake new projects or rebuild storm-damaged areas. Relief programs--by
minimizing, disguising, and shifting the real risks of defying natural
hazards--became an active force distorting private decision-making and
inviting even worse future tragedies.
Thus if a pre-Katrina Mississippian asked himself, "Should I build my house
10 feet above sea level, a quarter-mile from the Gulf Coast?" the answer
came back: "Sure, why not? The government will look after me if disaster
strikes."
This entitlement mentality ensured that each new tragedy would generate
fresh demands to expand the safety net. In Katrina's aftermath, those
demands centered on State Farm, which dared to deny certain claims under
homeowners policies that covered wind damage but expressly excluded floods.
Mississippi's attorney general immediately sued to void flood exclusion
clauses as "unconscionable" and "contrary to public policy" and even
launched a criminal investigation of State Farm's claims adjusting
practices.
Last year, a jury inflamed by adverse public opinion awarded $1 million in
punitive damages against State Farm for having stood on its contract rights
in a dispute involving a single house. That case was recently reversed on
appeal, but the victory is cold comfort for State Farm, which in the
meantime elected prudently to calm the litigation storm by paying tens of
millions of dollars to settle claims for unproven wind damage. Voila! The
safety net had a brand new strand, woven at the insurance company's expense.
Disgusted, State Farm announced last year that it would cease writing new
homeowners policies in Mississippi.
As more private insurers withdraw from high-hazard areas--or raise their
rates to reflect the staggering legal and public relations costs of offering
disaster insurance--a predictable lament arises: the free market has failed,
and government must fill the vacuum so that the statist safety net remains
strong. Thus it surprises no one to hear Florida Gov. Charlie Crist
challenging this year's presidential candidates to support creation of a
federal catastrophic fund that would keep insurance premiums artificially
low in disaster-prone areas across the country.
But the solution is not more of the market distortions and perverse
incentives that have lured so many people into harm's way. The solution is
to replace the prevailing entitlement mentality with a free market in
disaster prevention, insurance, and recovery.
In a free market--without tax-paid levees, government disaster relief, or
subsidized insurance--anyone who contemplates building or buying property in
a high-hazard area will need to face hard facts about the local history of
natural disasters, the efficacy and cost of preventive measures, and the
availability of insurance.
For example, the high price--or total unavailability--of private insurance
will resound like a clanging alarm bell, signaling the market's objective
view that a particular building plan is abnormally risky compared to less
dangerous locales.
With their own lives and wealth at stake, people will have every incentive
to evaluate risks objectively. And if hardy souls still choose to occupy and
fortify New Orleans, or build on an earthquake fault, or live in a tornado
alley, the risk and reward will be theirs alone. No longer will government
make disasters more disastrous by pretending that citizens have a right to
defy the forces of nature at others' expense.
Thomas A. Bowden is an analyst at the Ayn Rand Institute, focusing on legal
issues. Mr. Bowden is a former attorney and law school instructor who
practiced for twenty years in Baltimore, Maryland. |
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| Day Brown |
| Posted: Wed Apr 30, 2008 8:00 pm |
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Well, if its a bad idea to subsidize floodplain homeownership, is it
also a bad idea for the government to pick up the tab on the levee works
that protect the transnat oil company refineries along the river? or the
agribusiness land in the delta?
What should be done with the Atchafalaya spillway? |
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| Chronos |
| Posted: Thu May 01, 2008 5:47 am |
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"Day Brown" <daybrown@hughes.net> wrote in message
news:H0bSj.59129$QC.16575@newsfe20.lga...
Quote: Well, if its a bad idea to subsidize floodplain homeownership, is it also
a bad idea for the government to pick up the tab on the levee works that
protect the transnat oil company refineries along the river? or the
agribusiness land in the delta?
What should be done with the ?Atchafalaya spillway
Well, in principle it IS a bad idea. Those companies should have known
better where do build their refineries. However, what's done is done, and
those cannot be moved. Folks from the floodplane can and should move. Do you
want your tax money support their bad settling decision? Agrobusiness should
move elsewhere, too. This country is plagued by irresponsibility. Too many
folks puts too much faith into the government as their savior and government
IS the enabler of that irresponsibility. The result: I don't live there and
in no way connected to that place, yet I have to pay to bail them out of
their irresponsibility.
Atchafalaya spillway? It should probably be bombed into the stone age --
sounds kinda like a terrorist's name...just kidding  ) Never heard of that
spillway. |
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| ZerkonX |
| Posted: Thu May 01, 2008 9:28 am |
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On Wed, 30 Apr 2008 05:20:34 -0500, Chronos wrote:
Quote: In a speech from New Orleans last week, Republican presidential
candidate John McCain
Anything any candidate says has no meaning outside of political cosmetic. |
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| Day Brown |
| Posted: Thu May 01, 2008 10:35 pm |
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Chronos wrote:
Quote: "Day Brown" <daybrown@hughes.net> wrote in message
news:H0bSj.59129$QC.16575@newsfe20.lga...
Well, if its a bad idea to subsidize floodplain homeownership, is it also
a bad idea for the government to pick up the tab on the levee works that
protect the transnat oil company refineries along the river? or the
agribusiness land in the delta?
What should be done with the ?Atchafalaya spillway
Well, in principle it IS a bad idea. Those companies should have known
better where do build their refineries.
well agreed. Likewise the people who built on floodplains. Seems like
the refineries should have to PAY for the levee work which made their
business there profitable, just as you expect homeowners to pay.
Quote: However, what's done is done, and
those cannot be moved. Folks from the floodplane can and should move. Do you
want your tax money support their bad settling decision? Agrobusiness should
move elsewhere, too. This country is plagued by irresponsibility. Too many
folks puts too much faith into the government as their savior and government
IS the enabler of that irresponsibility. The result: I don't live there and
in no way connected to that place, yet I have to pay to bail them out of
their irresponsibility.
With agribusiness, its more complicated. The land could be flooded,
which would increase its fertility, but that would bring it out of
production at a time when the government wants to ramp up crop exports
to support the dollar.
And while it mite make sense to let it flood, lotsa that land is owned
by some very well connected good old boys who make millions off it, and
would never let their friends in congress not support the levee work.
Quote: Atchafalaya spillway? It should probably be bombed into the stone age --
sounds kinda like a terrorist's name...just kidding ) Never heard of that
spillway.
The Mississippi waggles around the flat land like a garden hose on a
driveway,
only with time frames that run about 500 years for any given channel.
The river usta run thru the Atchafalaya channel 500 years ago, and would
have by now but for the spillway, which is across from the SE Corner of
Mississippi.
There's a bet a big spring flood will come along, and blow that out like
a wet kleenix. Which will also wash most of Morgan city another 30 miles
out into the Gulf. the New Madrid just ticked off another one a week
ago. The biggest quake the USA ever had was when the New Madrid blew in
1811; it'd be a Richter 8 these days. And it'd turn all the levees into
jelly from Cairo all the way down. St. Louis, Memphis, Natches, even
Baton Rouge would make New Orleans look like a bad drunk.
In this case, you have a lotta millionaires who make tons of money off
the river being where it is, and the government is only doing what they
want it to do. I lived in New Orleans in 1975, read the hydrology
report, and moved to higher ground in the Ozarks. I was not, and never
expected to be, well connected enuf to get the government to pick up the
tab to keep me in business.
Scientists, geologists, hydrologists, and other engineers have been
ranting about all this for years, but they aint big money, so its not
had any effect. |
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