Superstorm Sandy

Thank Goodness the Feds Are Subsidizing the Development That We Need the Feds to Protect Us From

Hurricane Sandy and the state

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Down in the flood

There's an odd moment in Salon's post-Sandy interview with the SUNY historian Jacob Remes, author of the forthcoming book Disaster Citizenship.

The conversation starts off fine. When the interviewer asks whether Hurricane Sandy makes the case for big government or for big business, Remes replies that it's mistake to think those are our alternatives: "The best disaster relief is offered through solidarity, horizontally, through organizations that people are already members of. Sometimes that's government. Often it's not." That's basically true. As examples of these organizations, he mentions unions, fraternal orders, churches ("I might sound like a family-values Republican here"), and Occupy's networks, which have been doing much-needed relief work under the "Occupy Sandy" monicker. Also true. He goes on to claim that such intermediary institutions are in decline and that Americans are "increasingly isolated." I disagree, but at least we're on the same page about what's needed.

But then, asked to reply to Iain Murray's argument that regulation can hamper disaster recovery, Remes says this:

Without government there is no flood insurance. People who live in flood plains get flooded regularly, so you can't have a normal insurance market, because insurance markets depend on people who buy insurance and never use it. You can make an argument that people shouldn't be living in Atlantic City, or New York City, or New Orleans, but then everyone's going to living in Phoenix, which has its own problems.

The thing about these environmental regulations is that, left unchecked, what capitalism is going to do is build in places and ways that make short-term profits. You fill in wetlands. You build private sea walls that redirect surf and make it worse somewhere else. Government regulation puts a brake on that desire for short-term profits.

See if you can find the tension between those two paragraphs. If you're stumped, read this paper [pdf] from the Institute for Policy Integrity at NYU, which explains how "the flood insurance program encourages private development at a rate that is inefficient and unsupported from a social perspective that more fully considers the ecological and financial risks." It also makes a good case that the system disproportionately benefits the wealthy. It does not argue that we should all move to Phoenix: Ecologically fraught beachfront development is one thing, but Atlantic City, New York, and New Orleans managed to exist before the National Flood Insurance Program was created in 1968.

Bonus links: Coverage of Occupy Sandy from The New Yorker, The New York Times, and The Nation. Here's an interesting passage from the latter:

Occupiers at work

"The National Guard came to us and said you guys are way more organized than we are. They're giving us stuff to hand out. We got over six hubs or collectives. Every twenty blocks, we have a new spot that we're trying to engage with the community at. We're not the Red Cross. We're not FEMA, so it's different. It's grassroots. It's guerilla-style. It's a different kind of struggle, but we're trying," said [Occupy Sandy volunteer Diego] Ibanez.

Muriente also reported seeing Homeland Security patrolling neighborhoods, and told me she witnessed armed Homeland Security personnel in military gear, bulletproof vests and holding long rifles, pull over three young black men in the middle of the dark Rockaway as they walked down the street.

"They basically pulled a stop-and-frisk in the middle of blackout, made them put their hands up, started patting them down, pulling out flashlights from their pockets, and when we confronted them about it, [Homeland Security personnel] said there had been looting," she said. "That's the only time I've seen a government official outside of a vehicle that whole day."

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  1. she witnessed armed Homeland Security personnel in military gear, bulletproof vests and holding long rifles, pull over three young black men in the middle of the dark Rockaway as they walked down the street

    Because that’s what they do. Dickheads who want to play soldier are gonna be dickheads playing soldier.

  2. And yet the Occupy Sandy people will still believe government can handle healthcare and anything else.

    1. That’s totally different!

      /team

  3. No taxpayer funded bailouts.

  4. I’ve gotten in this debate endless times before. People just don’t understand the concept of risk.
    Some places are very likely to get flooded, other are not. Insurers don’t sell insurance only to places that never flood, they set premiums according to the likelihood of flooding, which makes premiums too expensive for many people to afford in some places.

    This of course does not include the entire state of Florida. Eliminating flood insurance subsidies would not prevent people from living in Florida, it would just make it *cost more*, because they would have to pay premiums commensurate with the true risk. Obviously, this would not render the entire state uninhabitable, because it’s not the entire state routinely gets flattened every couple of years. But it might discourage people from living right on the beach. Which would actually be nice from an environmental and tourism perspective.

    1. I live on hill in FL that has a retention pond at the base, probably 25 vertical feet between the banks of the pond and my foundation. There are 200 year old oak trees between me and that pond. I think I could get a reasonable rate.

    2. Or it would encourage people in coastal Florida to build in ways that reduce risk (eg, houses on stilts) and thus reduce their premiums.

      1. This is currently what Galveston is doing since it began rebuilding after Hurricane Rita. If only this sort of architectural avoidance of risk had been incentivized pre-Rita by letting insurance companies act line sane actors in the market, residents there wouldn’t have had to learn such a harsh lesson.

  5. “People who live in flood plains get flooded regularly, so you can’t have a normal insurance market, because insurance markets depend on people who buy insurance and never use it.”

    Then they should adapt their behavior. Construct improvements at a higher elevation than the flood occurrence for a predictable return period, become an airboat pilot, don’t fucking live there………

    1. People who live in flood plains get flooded regularly, so you can’t have a normal insurance market

      Damn straight. Insurance companies depend on guaranteeing a large enough pool from statistically unlikely events that they pay out less than they take in over any timeframe longer than about a year. Otherwise they don’t stay in business. Maybe you shouldn’t put a large asset somewhere where it is statistically certain to be destroyed before you’ve gotten your value out of it.

      1. Obviously these insurance companies are only in this for the evil profits. They don’t care about those people and the horrors they’ve been through! They should be in this business to help others, not their corporate overlords. /occupysandy

      2. Maybe you shouldn’t put a large asset somewhere where it is statistically certain to be destroyed before you’ve gotten your value out of it.

        Or as I always say, don’t build shit you want to keep on a coastal barrier island. Yes, I’m looking at you, Galveston.

    2. Of course, one of the major tactics of the flood insurance program is ‘buy-outs,’ where they simply purchase or condemn all properties in the flood plain. Even they are not dumb enough to sell insurance to the most risky homeowners.

    3. don’t fucking live there……..

      But they reeeeaaaalllllly wanna!

    4. People who live in flood plains get flooded regularly, so you can’t have a normal insurance market.

      Sure you can. Insurance spreads risk among the risk pool, so you can have insurance even if the odds that you will someday make a claim are very high.

      1. I think his point is that insurance only works well when the probability of a particular covered loss is very low. If the probability is high, the premiums will be a large fraction of the loss amount, and there’s not much point to having insurance since you’re guaranteed to lose as much money every few years even if you don’t have a loss.

  6. People who live in flood plains get flooded regularly, so you can’t have a normal insurance market, because insurance markets depend on people who buy insurance and never use it.

    are not complete fucking morons.

  7. The thing about these environmental regulations is that, left unchecked, what capitalism is going to do is build in places and ways that make short-term profits. You fill in wetlands. You build private sea walls that redirect surf and make it worse somewhere else. Government regulation puts a brake on that desire for short-term profits.

    *makes “but-but-but-but-but-but” motorboat sound*

  8. I punched up on the Occutards, but good on ’em for doing something worth a shit for once in their lives.

  9. I know two couples that got flooded out in the town I work 4 years ago.

    One of the couples lived in the 100 year flood plain, so their mortgage lender required flood insurance. They had water up to their second floor. The house was a total loss. Flood insurance payed out the value of the house and nothing more. They took the money and ran.

    The other couple lived in the 500 year flood plain. The lender didn’t require it, so they didn’t have insurance. They had water to waist high in the first floor. Their friends and families helped to gut the place. A combination of charity and loans allowed them to rebuild. They still live there and still don’t carry insurance. What an idiot.

    1. The city will use a combination local, state, and federal money to put in flood protection for some of the city. This guy’s house will not be in the protected part of the city. And this new protection will just making flooding where he lives much more likely because flood waters will have a lot less space to flow through.

    2. At one time in the late ’90s it was nearly impossible to purchase flood insurance if it wasn’t required. I mean, not only was it not offered by your agent, but if you asked them to work up a number they would probably check to see if you lived in the 100 year flood plain and tell you they didn’t sell it. I’m sure a sufficiently motivated individual could find it, but the insurance guys thought it was a bad risk. There wasn’t a clearing price because the potential claims were so ridiculously high compared to what the few people who wanted it were willing to pay.

      1. Continued:
        The reason there was no clearing price is that the Feds had capped the 100 year floodplain rates. Which was fine for the insurance guys because the Feds were guaranteeing those. But, if you can’t set the price based on market conditions in the bad spots, you can’t afford to insure at the market price in the low risk spots.

        Imagine if the Feds capped rates (but guaranteed the insurer for) for everyone with high cancer risk who contracted cancer, and you wanted to buy cancer insurance as an individual whose risk was just outside that zone. The insurer can’t offer you the medium rate because their high rate is capped at the medium rate. You’d have to pay more than the guys in the high group to get that insurance. A lot more.

        1. But, if you can’t set the price based on market conditions in the bad spots, you can’t afford to insure at the market price in the low risk spots.

          Winner.

          Math iz teh hard.

    3. You generally can’t buy flood insurance unless you’re within the designated flood zone on the FEMA maps.

      1. And your town/municipality states has chosen to participate in the NFIP program. Otherwise, you’re SoL.

        1. Well, I distinctly remember standing in the muck on his first floor and him telling me he made a choice not to buy. But, I could be senile.

  10. They still live there and still don’t carry insurance.

    If he continues to “self-insures” I have no problem. He can be as stupid as he likes. If he rolls snake eyes again and gets FEMA to cut him a check, that’s a problem.

  11. (“I might sound like a family-values Republican here”)

    I fucking hate these leftist assholes who are more concerned about stigmatizing religion (specifically religion white people like) than in doing math and hard stuff like that.

    While I’m pretty much irreligious myself, I see no value in dismissing whatever community benefit people may get from being religious. And I certainly see more value in being a part of a church than in having endless faith in government. Churches may do a great job in guilt-tripping you out of your money, but they generally don’t coerce you with guns and jail sentences if you don’t give to them.

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