The recent hurricanes took a heavy toll. The cost of rebuilding will be significant.
Politicians from the areas hit now want tens of billions of dollars in aid.
When disaster strikes, the federal government definitely has a role because the feds control resources like the military and other first responders. After Hurricane Harvey, FEMA housed 42,000 people in 692 shelters. After Irma, 13,000 National Guard soldiers helped rescue and evacuate people. That's the kind of emergency response we expect from the federal government.
But why is rebuilding afterwards the federal government's responsibility? Until recently, businesses and charities handled most disaster response.
In 1906, the massive San Francisco earthquake and fire that followed destroyed 80 percent of the city. The city was rapidly rebuilt because it was done by the private sector, not cumbersome bureaucracies. Companies like Johnson and Johnson shipped in rail cars full of donated medical supplies.
After the great flood of 1916, again, businesses immediately stepped in. The federal government did very little. The midwest recovered.
When massive tornadoes swept through Oklahoma a few years ago, volunteers from a charity, Oklahoma Baptist Disaster Relief, used bulldozers to clear tornado debris from more than a thousand homes. The charity's director, Sam Porter, said "I don't think there's any kind of disaster that can take place that the non-profit and faith-based groups cannot take care of."
Whether that's true or not, there's no doubt that the private sector does a better job than government. Federal rebuilding creates moral hazards that lead to expectations of even more government help.
Produced by Naomi Brockwell. Edited by Joshua Swain.