What about the future? The bad news is that a natural 30-year lull in the frequency of Atlantic hurricanes apparently has come to an end. As National Hurricane Center researchers note in a recent technical memorandum, "The decreased death totals in recent years could be as much a result of lack of major hurricanes striking the most vulnerable areas as they are of any fail-proof forecasting, warning, and observing systems." The memo adds: "If warnings are heeded and preparedness plans developed, the death toll can be reduced. In the absence of a change of attitude, policy, or laws governing building practices near the ocean, however, large property losses are inevitable."
After Katrina, it's clear which policies need to change.
It's time for the feds to stop offering flood insurance. It's time
for local citizens to take more responsibility for constructing and
maintaining the infrastructure that protects them and their
property. And it's time for government agencies to stop interfering
with private disaster relief efforts.
Ronald Bailey (rbailey@reason.com), reason's science correspondent, is the author of Liberation Biology: The Scientific and Moral Case for the Biotech Revolution (Prometheus).
You Don't Save What You Don't Own
Disaster amplifies the private-public incentive divide.
Jeff A. Taylor
Let's conduct a little thought experiment. The laboratory stretches from ground zero in Louisiana hundreds of miles up the East Coast, along crippled gasoline supply lines. What if the buses in New Orleans had been privately owned, and the gasoline supply had been a nationalized, government-run quasi-utility?
We know that New Orleans' infamous municipal and school buses were left to be destroyed at the very instant they were needed most. More than 400 were left idle when they should have been pulled back to higher ground for use in those tense days after Katrina hit.
Had there been a futures market on buses in New Orleans, the value of the buses would have skyrocketed as Katrina approached, signaling their increased utility in the emergency. But even without such an overt market signal, any private owner of the vehicles would have exhausted all opportunities to save his or her property. Nobody who owned such a potentially valuable product would have done what New Orleans Mayor Ray Nagin did: let it all go to waste, on the assumption that drivers would be impossible to find. Greyhound, after all, did not leave hundreds of its buses to be destroyed. This very fact caused Nagin to scream for "every doggone Greyhound bus line in the country" to come to the aid of his city. And it should go without saying that no private employer would long tolerate a work force that, in Louisiana Sen. Mary Landrieu's memorable description of New Orleans public sector workers, has trouble coming to work even on sunny days.
Now to the flip side. Gasoline prices are nothing but one big futures market, constantly transmitting both the current value and the expected replacement cost of the stuff to consumers. Would a government-run monopoly have permitted prices to zoom past $3 a gallon, reflecting both reduced refining capacity along the Gulf and, more important, power outages on key gasoline pipelines to the East? Or would a government decree have muted this powerful conservation signal to everyone on the supply chain? Judging from the hysterical raving about "price gouging," there is little question that a system of rationing and price controls would have been instituted, thereby guaranteeing long, costly lines to get gas and quite likely an exhaustion of the limited supply as consumers bought too much gas at artificially low prices.
Although craven politicians refuse to see this, the long-term profit-maximizing route for private gasoline production seems to be to try to spread out a constrained supply for as long as possible until something like full capacity is available. In other words, distributors raise prices enough to deter sales, not to "gouge" people. As supply dwindled nearly to exhaustion in some markets, wholesale "over-allocation" fees kicked in. These were intended to discourage one or two distributors from buying up the remaining supply. Try to "corner" the market in gas, and you'll pay an extra 50 cents a gallon. Clueless consumer groups predictably screamed bloody murder about the surcharge, heedless of how this pricing mechanism helped save and spread out a scarce supply and ensure consumers would have some gas to buy at some price.
The motive for the surcharge policy is plain; it has little to do with being "fair" to consumers in the sense that politicians use the word. The worst of all possible worlds is for a gas station to sell out of product. Among other things, it means its door will no longer be darkened by potential customers for the other high-margin merchandise it sells--milk, beer, bread, bottled water. A station owner would much rather sell several thousand gallons less over a few days than eat everything on his store shelves while leaving a permanent impression on customers that he is an unreliable supplier of a vital good. These incentives push the private gasoline owners to conserve their supplies in times of crisis. How do you conserve? By raising the price.
As the public-sector tab for Katrina's clean-up climbs, fans of big government will point to the billions in loans and grants as proof of the value of a robust state. The costs of that same state --and its institutional disinclination to save billions--will be forgotten along with those soggy New Orleans buses.
Jeff A. Taylor (jtaylor@reason.com) writes the weekly e-mail newsletter Reason Express.
A Flood of Red Ink
Katrina's fiscal fallout
Jacob Sullum
Shelley Moore Capito is worried about Hurricane Katrina's fiscal implications. "We don't want to turn rebuilding the Big Easy into the Big Dig," the Republican representative from West Virginia told the Los Angeles Times in September, referring to Boston's notoriously bloated underground highway project. She said the reconstruction effort "is going to require efficiency, which is not something synonymous with the federal government."
Capito herself illustrated the reason Congress cannot be trusted to spend our money wisely when she was asked if she'd be willing to help fund Katrina aid by giving up West Virginia's share of the $25 billion in pork-barrel spending authorized by this year's transportation bill--one target on a list of cuts proposed by the Republican Study Committee, the last bastion of fiscal conservatives in the House. "I don't like that idea," she confessed. "It took three years to get it done. It's a jobs bill."
Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time.
nfl jerseys|11.7.10 @ 10:30PM|#
eths
منتدى العرب|3.10.11 @ 2:10PM|#
Thank you
قبلة الوداع|8.13.11 @ 2:19AM|#
thank u