Role of National Government in the wake of Natural Disaster

[EverKing]

I was going to mention this in the [broken link]Katrina exposes the failure of the welfare state thread, but decided it deserves its own.

When Hurricane Katrina slammed into the US Gulf Coast with 150 mph (240 kph) winds and 30’ (9 meter) storm surges hundreds of thousands of homes and business were destroyed and millions of people were displaced, left not just homeless, but without even the comfort of knowing they had a home somewhere out there. The most recent estimates I’ve heard for the projected cost of property damage were somewhere in the neighborhood of 100 Billion USD (almost 55 Billion GBP). In addition to actual physical damage there is the damage to the national economy due to the breakdown of trade and the loss of fuel refineries and import. In Minneapolis and St. Paul, where the Minnesota River meets the Upper Mississippi River in Minnesota, there is a pile up of grain barges that are waiting for export and have no where to go. This is a disaster the likes which this country has rarely, if ever, seen.

Yet, there is still something about the US Government’s response that does not sit right with me. I’m not talking about the initial lethargic response of getting rescuers into New Orleans, that doesn’t sit right with anyone and is a different issue. I’m talking about the commitment from the national government to rebuild.

We have a system here in the US that provides the resources for people to rebuild in wake of catastrophe. We have privatized insurance and the provision for people to receive funding from private charities and donations. Home owners, renters, business owners…all of these and more have their own kinds of insurance. It is exactly for cases like this that insurance exists. For those that do not have insurance either because they cannot afford it or they did not have the proper kinds of insurance (flood insurance for example) we have plenty of organizations such as the Red Cross and the United Way plus in the wake of events such as Katrina there is always a surge of new, specialized charities that spring up for relief and rebuilding. We have these institutions precisely because it is not supposed to be the Federal Government’s responsibility to perform these duties.

So why is the Federal Government doing this?

I just cannot figure out a good reason short of PR. Even that isn’t a very good reason to me. People may not like it, but times like this present the perfect opportunity for the Government to re-iterate to the people the idea of laissez-faire upon which it was founded. If local governments (up to State Government) wish to put their resources toward rebuilding that is their prerogative and I agree—nay, encourage—them to do so. The Federal Government should not be part of the majority of the rebuilding.

Let me highlight this with an example: in 1997 the Cities of Grand Forks, ND and East Grand Forks, MN on the Red River of the North were 80-90% flooded by the spring swell of the river. While the 60,000 displaced people looked down upon their drowned cities from a distance, fires began to spring up. They had no way to fight these fires and soon they spread to consume many buildings of the down town area. Look here for more information on this disaster; or, if you prefer the Wikipedia Article. FEMA provided shelter and relief, but beyond that all of the rebuilding of private property, as far as I’ve been able to learn, was funded by charities, insurance, donations, and local governments. The exception to this was the government subsidies given to the farms of the Red River Valley, one of the world’s most fertile areas, but even most of that was provided by local government. Now, I will be the first to admit that the scale of these disasters, the 1997 Red River Flood and Hurricane Katrina, are vastly different; but, where does it cross that line and become a matter for the Federal Government?

Perhaps a more poignant example is this: if your house is destroyed by a lightning strike or a tornado, is it the Federal Government’s responsibility to rebuild your house and pay you for the damages?

No.

So, why should it be the Federal Government’s responsibility to rebuild private property in the wake of Katrina? In my opinion it shouldn’t be.

Here again, there should be an exception: basic infrastructure of national importance. Ports, docks, canals, etc. All of these are essential to the national economy and so I have no problem with the Federal Government providing some aid in the recovery of these areas. Of course, I don’t agree with the nature that rebuilding these will have. But that is more closely related to the question of how to rebuild New Orleans than it is with who should rebuild all the effected areas.

I understand that I may be largely alone here with these particular sentiments, and that is fine. I’m asking all you, what do think the Federal Government should be responsible for and why? I'm not limiting this discussion to Hurricane Katrina either, I have just been using that as an example to illustrate my possition.

[EverKing]

Well, I was hoping that this would initiate at least some dialogue. Apparently I was mistaken as barely anyone has even viewed it (many of the alleged "views" were from me going back and re-reading or thinking of posting a reply of my own only to change my mind) much less replied.

I certainly hope my views on this subject haven't alienated me from all of you. As I said in the original post, I know my opinion of the roles that a national government should fulfill are most likely drastically different from many people at MM, but I was hoping that by expressing where I stand others would step in and explain why their views are different. It was really intended to be a thread involving the theory of government more than one regarding current events.

In light of the lack of response, I think it safe to say that the thread can be removed/forgoten/what-have-you. It is just burning up space for no particular reason if it doesn't spark discusion. So, to the Chaos Engineers, feel free to do with it what you will.

I'll see ya'll around in other threads! :up:

[mordenkainen]

You have to make a political point of some sort if you want us to rip it apart

[PsychicWarVeteran]

This is the first time I've seen this thread... :| ...weird.

Yet, there is still something about the US Government’s response that does not sit right with me... I’m talking about the commitment from the national government to rebuild.

Well, that is, afterall, what FEMA is for but I think I see where you're coming from. From an economic standpoint, the fed's commitment to rebuild (and even the generosity of private sectors) poses some complicated problems.

The economist Gary Becker explains it better than I can:

Such public and private assistance in the event of disasters make it more likely for persons, companies, and public activities to locate in high-risk areas because they will often be spared much of the losses. They also may not take out insurance against risks that would inflict large losses; for example, rather few New Orleans homeowners had flood insurance. Studies have shown a small propensity to insure against low probability natural disasters that cause great damage- see "Paying the Price: The status and Role of Insurance Against Natural Disasters In the U.S.", Ed. by Kunreuter and Roth). So private and public generosity to victims of disasters help distort many pre-disaster decisions.

This distortion goes under the name of the "Good Samaritan" paradox in philosophy and economics. To illustrate this problem, consider the behavior of loving parents toward their children. Such parents would come to the assistance of their children if they get into financial trouble, have serious medical problems, or experience other difficulties. At the same time, they want their children to use their money wisely, work and study hard, prepare for future contingencies, and lead healthy life, so that they can avoid personal disasters.

Unfortunately for the parents, children can distinguish reality from lectures, and threats that will not be backed up by parental behavior. If they anticipate that their parents will help them out if they get into trouble, and if they are not so altruist to their parents, they would consume and possibly gamble excessively, and they might quit good jobs to "find themselves". Parents might then be indirectly encouraging the very behavior by their children that they want them to avoid...

The federal government and private philanthropy are in a similar Good Samaritan situation with respect to families, businesses, and local governments that build where there is likely to be flooding, landslides, hurricanes, earthquakes, and other major natural disasters. The federal government and others may wish they did not build so much in these areas, and the government may hope for diversification elsewhere. Yet if the government's advise is ignored, and if there is terrible suffering from a disaster, all humane and politically sensitive governments and philanthropic organizations would help, even though they wish the victims had made more socially efficient decisions before disaster struck.

Now, economists tend to be on the conservative side. They also don't tend to let their own emotions sway their economic analysis. And while I get what Becker is saying -- and let's be honest, it's hard to disagree with his analysis here -- I still would never want victims of a disaster to be given nothing but a lecture about how they should have been better prepared.

So, as I say, complicated problems.

[EverKing]

I thought I made a political point. The bit about the Federal Government spending public money re-building private property. :-أ¾

Besides, I'm interested in other people's opinions...there is no growth if you don't open yourself to new information. :D

[PsychicWarVeteran]

Dang, posted at the same time... *bump*

[EverKing]

Thanks for the bump, I wouldn't have seen your reply otherwise.

The analysis you quoted and the idea of the "Good Samaritan Paradox" that it presents are great examples and good arguments for my point of view. Although, I must admit, my take on it is born more out of personal philosophy than good economy even as related as they are.

I agree that I woudn't want to see victims of natural disaster suffer more than they already have because of an attidude of, "well, sorry chum, you chose to live there and not have the proper insurance." But at the same point, as Mr. Becker presented in his argument, the attidute of "don't worry, we'll bail you out...you pauvre petite," can be as destructive or more so in the long run. It creates an expectancy of--or even a dependancy on--the fedreal government to take care of us regardless of the situation at the loss of personal responsibility. This attitude has been cultivated in the US for last generatino or two it seems and we can see it in many areas.

The largest indicator of it is, I feel, how litigant our society has become. A woman spills hot coffe in her lap; it's not her fault, it is McDonald's for selling hot coffe. A man injures himself while illegally breaking into an old woman's house; it's not his fault, it's hers for having her house properly lit. Now days it seems everyone is looking for a scape goat to blame their problems on: the media, the government, big business, society at large. The majority of Americans seem unwilling to take personal responsibility for their own actions and descisions. The dependancy on government to take care of our personal property is an extension of this same attitude.

[PsychicWarVeteran]

It's important to note that usually the amount given to a victim by the government is not enough to completely rebuild. It is supposed to supplement whatever the victim has done for himself (i.e. insurance, preparation, savings, etc.). When St. Helens blew up here in Washington, many residents who lost their homes were paid for their losses, but not enough to buy a comparable lot and build a comparable house. They needed their insurance and savings to make up the difference.

I think it's necessary to encourage people to prepare for the worst and I don't think the fed should rebuild everyone's houses for free when a storm tears them down. There has to be a middle road, but then again the economic argument I quoted above points out precisely why communism fails so miserably.

And so all I can really say is: taking the high road is a bitch. People are suffering; we need to do what we can to alleviate that suffering, regardless of what kinds of attitudes that aid creates. In the end, it's the people that are important, not the money.

[EverKing]

Well said. That is why I encourage private donatations and charity. But even providing federally funded subsidies to the victims starts us down a dangerous road that was mentioned in your previous post. It creates a self-propigating attitude of dependancy made even even worse by its existance in a democtratic, or quasi-democratic, society. The People ostensibly have control of the government and the government must act in accordance to the expectations and will of the People. When the door is opened (as it already has been) for government funding to private citizenry it creates an expectation for that funding to continue. Remove it and the People will remove you from the government in preference to someone who will continue the funding. Given time this trend will naturally lead to increased governmental sudsidation of private funds.

Of course, given the fickleness of the American public, we can always hope that these attidudes change and people begin to realize that we are in charge of our own lives and the government only has the power over us that we allow it to have.