Saturday, September 03, 2005

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Very Insightful Article on the Role of Flood Insurance Though it will undoubtedly ring un-charitable to many ears, this John Tierney article is right on. Starting in the 1960's, the federal government took over the business of insuring against floods. It offered subsidized insurance to people in flood-prone areas, encouraging seaside homes that never would have been built otherwise. Even at bargain rates, most people went without flood insurance - only about a third of the homes in New Orleans carried it. People don't bother to protect themselves because they figure - correctly - that if disaster strikes they'll be reimbursed anyway by FEMA. It gives out money so freely that it has grown into one of the great vote-buying tools of the modern presidency. Bill Clinton set a record for declaring disasters, and then President Bush set the single-state spending record in Florida before last year's election. I generally think of this phenomenon--re-building, with insurance money, where you shouldn't have built in the first place--in relation to much smaller-scale phenomena. You know, the 100-unit luxury subdivision in the middle of a fire-prone forest, or on the edge of a mudslide-prone hill. It is challenging to think how that applies to an entire city. After the hundred-year floods of the Mississippi in the mid-1990s, som entire towns were relocated farther from the river. Somehow that doesn't seem an option for New Orleans. (Of course, none of this policy-wonking diminishes the suffering of those left behind, many of whom probably didn't have the means to evacuate (as opposed to doggedly staying behind, despite warnings), and weren't homeowners anyway.) 3:55:09 PM    comment []