Monday, August 16, 2004

Hurricane Bush

In the wake of Hurricane Charley President Bush is visiting the devastation, lending support to the victims of the disaster.

And promising them our money.

CNN published a report citing the commissioner of the Florida Department of Law Enforcement, Guy Tunnel (whose name I wanted to mention mostly so I can point out that it sounds like a gay bar). Tunnel recalled the devastation, the lives lost from the hurricane, the massive undertaking that’s required to survey the damage. So it’s no wonder that President Bush stated the federal government is on its way to help pick up the tab estimated to be as much as $11 billion.

Correct me if I’m wrong but Florida isn’t known for its hurricanes? In fact, didn’t a little thing called Hurricane Andrew come through twelve years ago? In fact, don’t hurricanes occur in that area every year at around the same time? I believe there’s a whole season named after them. It’s called hurricane season.

The point is the victims of the tragedy shouldn’t make everyone else in the country pay for the flaws of their real estate. Hurricanes are a real, proven threat to the area; inhabitants should just buy insurance. If they can’t afford it, they should move. Everyone can’t live any where.


Chris said...

HAHA! "Guy Tunnel: The Best New Bar in South Beach"

But seriously, you're correct. While the costs of this hurricane are estimated at 11 billion dollars, the reports seem to indicate that most of the damage that this hurricane caused was to mobile home parks. Now, it seems to me that a mobile home is NOT the best place to be during a hurricane, so anyone that wants to live in a mobile home park in Florida of all places had better have a pretty good insurance policy. Furthermore, from the reports that I have seen some of these people in Punta Gorda, FL have been saying that apparently "hurricanes don't normally hit this part of Florida." SAY WHAT? Hello, the whole state is pretty much ground zero for hurricanes and most of it is almost underwater anyways and yet you expect US to pick up the tab for wanting to live in a mobile home park in a state that is PRONE to hurricanes and yet you dribble on about how "hurricanes don't hit 'your' part of Florida." Crikey! I swear, there is something in the water in Florida, literally!

Mike said...

It seems to me that if the likelihood of hurricanes in a certain area is lower, then the insurance premiums in that area should be lower.

A question for both of you: which is worse, that we pay for them to rebuild, or leave them homeless and pay for the government services they receive that way? David, you can probably quote prices for each. You tend to know that type of stuff.

-Ron said...

I think that one of the central questions about this $11B is “how will it be dispersed?” FEMA aid is often in the form of low-interest loans, sometimes even dispersed through local banks (which, admittedly, are less and less local). Now, I do not pretend that this is not government largesse, but I cannot help thinking that this is less harmful than direct payouts. First, the recipient has to repay the loan, or risk future tax refunds, student and other loan eligibility (such as Fannie Mae), a bad credit report, and possible foreclosure. So from the homeowner’s point of view, there is an incentive to take the aid only if your insurance is insufficient to cover the repairs to your home, and then only in that remaining amount, or to cover a high deductible. The vast majority of folks will not seek aid under this system because either their insurance does cover the repairs, or they don’t have the means to repay the loan. It’s still tax money down the drain, but at least some of the down-sides of welfare are avoided.

David said...

Careful Ron and ask yourself the tough questions: what would the market set the interest rate at? And if it's a loan, not a gift, why can't the banks do pull these loans off themselves? After all, they had plenty of time to free up the assets. I agree, it's far better than a gift (aka a subsidy for stupidity) but don't think there's no welfare involved.

The real interesting question is if the Florida government allow out-of-state contractors to help fix the damages. I seem to remember in the aftermath of another hurricane, Florida construction interest groups made it illegal for "outsiders" to help repair the damages. My memory's a little shaky on the details but I seem to recall people loading up their trucks from all over the East Coast only to be denied business when they got down to the disaster site.

As for Mike's question, I don't know. Not yet, anyway. I do know that as they rebuild, they are homeless so we are really doing both (as least for a few months).