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September 15, 2005

Disaster Management

Deaths per year in the US due to hurricanes have been dropping for decades.

Katrina might change that.

Is it big government's fault?

Prior to Katrina, it could reasonably be argued that declining mortality rates from hurricanes in the U.S. were the result of better long-range warning systems, sturdier houses, improved roads, comprehensive evacuation planning, and high quality hospitals. So why did all this fail when Katrina struck? Is Katrina a fluke or is it possible that government programs are in fact making us less safe?

Prior to Katrina, it could reasonably be argued that declining mortality rates from hurricanes in the U.S. were the result of better long-range warning systems, sturdier houses, improved roads, comprehensive evacuation planning, and high quality hospitals. So why did all this fail when Katrina struck? Is Katrina a fluke or is it possible that government programs are in fact making us less safe?Simple fact; when you subsidize a behavior, whether it's growing corn or having children or building in a flood plain, people will tend to flock to that behavior.

And that flood plain bit? It's subsidized:

The National Flood Insurance Program (NFIP) run by the Federal Emergency Management Agency (FEMA) encourages people to live in harm's way. As of 2004, the NFIP had issued more than 4.4 million flood insurance policies in approximately 20,000 communities nationwide, representing nearly $637 billion worth of coverage. Since it was established in 1969, the program has paid $12.7 billion in flood insurance claims and related costs. In recent years, the NFIP has collected $1.1 billion in premiums and paid out around $1 billion in damages each year. Currently, the NFIP has about $1.1 billion in reserves; estimates are that the NFIP will have to pay out more than $10 billion in claims for the houses and businesses destroyed by Katrina. People should be told that this is the last time that the Feds will pay flood insurance claims to owners in areas prone to flooding. If private insurers want to take the risk, then their stockholders, not taxpayers, will be on the hook.
If there's an area where the free market makes eminent sense, it's in insurance. The fed has subsidized huge development in places that, under normal circumstances, people would have more sense than to move into.
Next, let's set aside the larger question of whether or not the government should be encouraging people to live below sea level at all. The fact is that the federal government, which is in charge of all navigable waterways, failed to provide adequate infrastructure to prevent the inundation of a city which was home to nearly a half million people. The failure of the levees protecting New Orleans and other parts of southern Louisiana perfectly illustrates the fact that politicians generally engage in short term thinking. Merely maintaining or bolstering some boring old levees will not garner many more votes. But senators and representatives who vote to spend the most tax dollars on restoring New Orleans and the Gulf Coast will become the heroes.
The lesson, of course? If you're moving into someplace that the free market would never support, make sure it's someplace that the politicians find "sexy".

Maybe in John Roberts' back yard.

Posted by Mitch at September 15, 2005 06:35 AM | TrackBack
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