Sunday, May 21, 2006

Post-Katrina Thoughts

Saturday's Detroit News has an article titled "Rebuilding in storm belts defies forcasts" by AP writer Allen G. Breed. The article shows how some people don't want to give up the paradise of living on or by the water. Instead of moving inland where it is safer, especially from storm surges of 30 feet, they would rather rebuild on sand and silt that is sinking under the weight and require taxpayer funded levees to protect their little piece of eden.

But what makes it all possible?

**Much of that construction -- along with today's rebuilding -- was made possible by the National Flood Insurance Program, the subject of much post-Katrina debate.

Subsidizing beachfront homes

It is madness for the government to continue subsidizing coastal development by providing infrastructure and flood insurance, says ocean advocate David Helvarg.

Repeat claims account for 40 percent of all payments from the program, although they represent just 2 percent of covered properties, says Helvarg, president of the Blue Frontier Campaign.

As of last year, he says, $763 billion worth of real estate was insured by the federal flood program, 40 percent of it in Florida alone.

"This is the biggest exposure we have after Social Security," says Helvarg. "It's nuts to think we can keep building in harm's way."**

Yes it is. But such is the result of allowing government to become a great altruistic benefactor to society instead of being the protector of individual rights as our constitution requires. One has to wonder how many politicians got re-elected by promising voters "Want to have a little piece of paradise? No problem. I will just pass laws that will force your fellow citizens to pay for special levees just for you and for replacement costs if anything bad should happen to your dream world."

Is the government even trying to rein in any of this insanity? Well, they've made a feeble attempt at it but the temptation to play the great altruistic dispenser of goodies is proving too great for some politicians.

**The federal government has tried to discourage building in sensitive coastal areas. The Reagan-era Coastal Barrier Resources Act excluded 3 million acres of sand spits and barrier islands from federal flood insurance programs and other infrastructure assistance, but lawmakers have been steadily chipping away at it.

When Katrina came ashore, there were bills pending to cover 50,000 previously excluded acres in Florida, Georgia and Texas. That's unfair to taxpayers, Houck says, adding, "You can go over Niagara in a barrel if you want -- but we don't have to buy the barrel."**

But we are buying the barrel, along with the lock and stock.

In a laissez-faire capitalist society, Katrina would still have happened. But the human disaster that was New Orleans would not. In such a society, the government would not be allowed to buy votes by promising favors to some people at the expense of others.

Also in such a society, all insurance would be privately owned. No insurance company in its right mind would insure the building of a city on nothing but sand and silt.

The only way it could happen is if the businessmen were willing to pay the higher premiums that the insurers would certainly demand. It is also likely the insurance companies would not settle for levees built to withstand catagory 3 hurricanes. With that much money involved, both businessmen and insurance companies would demand levees be built to withstand max strength storms. It is also likely that the levees would be built by private companies.

But none of these conditions exist in our welfare statist economy and we saw the results of letting the government run things. Only a system of laissez-faire capitalism would prevent such a disaster from happening.

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