Re: Flood Relief (formerly Re:Overriding the S-Chip Veto)


"George Z. Bush" <georgezbush@xxxxxxxxxxxxxxxxxx> wrote in message
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John Galt wrote:
"George Z. Bush" <georgezbush@xxxxxxxxxxxxxxxxxx> wrote in message
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Islander wrote:
John Galt wrote:
"Islander" <nospam@xxxxxxxxxxx> wrote in message
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John Galt wrote:
"Rita" <Rita@xxxxxxxxxxx> wrote in message
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On Thu, 18 Oct 2007 09:19:27 -0700, Islander <nospam@xxxxxxxxxxx>

(Snip)

John Stossl goes into this in detail in one of his books, using his
own
pricey oceanfront property as an example (which he no longer owns, it
should
be mentioned.) IIRC, the area is prone to flooding every decade or so.
Years
of losses back in the 90's had led insurance companies either to stop
insuring the properties or kicked up the premiums to stratospheric
levels.
(It should be added here that for the people who owned property in
this
area, the premiums were painfully expensive, but the people were rich
enough
to afford them.)

Along comes FEMA with low cost insurance, indemnifying rich people
against
the risk of building fancy houses on a flood plain. Moral hazard.
Building
boom ensues in the area. Area still floods, government takes a bath
(pun
intended) financially every time a flood occurs. You and I pay what is
essentially welfare to the rich.

I don't know who made the above nonsensical statement, but I'd like to
interject a clarification for the benefit of those who are misinformed
but
insist on speaking as if they know what they're talking about.

I did, and there's nothing nonsensical about it. It's verbatim from a
published property owner on the topic. The fact that your experience
differs
is neither surprising nor relevant to the point.

Oh, I see....his experience is relevent because he had it published in a
book and mine isn't because I didn't. Very logical and sensible thinking
for a six year old. One and one equals three.....exactly!

Your conclusion, not mine.

The core issue here is that a well-meaning program can have unintended
consequences that create moral hazard. Obviously.

Evidently this doesn't bother you. It bothers me.

JG




I've had a little personal experience with this particular topic, living
on the Atlantic coast and having been flooded out during two hurricanes
during the 90s. First of all, FEMA did NOT invent flood insurance.

Nobody said it was.

Somebody (presumably you) said these words "Along comes FEMA with low cost
insurance, indemnifying rich people against the risk of building fancy
houses on a flood plain." You'll find them a couple of paragraphs above,
and that statement clearly infers that FEMA has something to do with
insurance, which it does not. FEMA does not indemnify anyone for
anything.....their mandate always has been since their inception to
provide emergency relief to victims of disasters. The agency that manages
the National Flood Insurance Program is the Federal Insurance & Mitigation
Administration (FIMA), which was established in 1968 to manage the program
and is still doing it. FEMA did not show up on the scene until it was
established in 1979, 11 years after the National Flood Insurance Program
was established.


Flood insurance was a federal program that was instituted to help people
from the economic ravages of flooding long before FEMA came into
existence.

Didnt' say anything to the contrary. It now, however, is managed by FEMA.

......both of whom are now managed by the Department of Homeland Security.
So what? All of the heavy insurance lifting is still done by FIMA.


When it
was first devised, its impetus came from a need to help victims of
repetitive spring flooding that occurred in the Mississippi, Missouri,
Ohio, Snake, Monongahela and numerous other River valleys. The number
of
people it potentially applies to in those and other valleys every spring
after the winter snow and ice melts equals and probably far exceeds the
number of property owners residing on the Atlantic and Gulf coasts who
are
exposed to water damage from hurricanes once or twice every ten years.

Granted. The issue is whether it is rightly applied to affulent owners of
beachfront property.

That is not the issue. There is no earnings prerequisite for the receipt
of emergency relief by victims of natural disasters. When the roads are
cut off and partially or totally destroyed and the supply of safe drinking
water and electricity has been interrupted sometimes for days on end or
longer, one's wealth cannot buy relief.....it's only available through
federal agencies whose business it is to provide it to those in need.

Instead of letting myself get into a full fledged rant on the subject,
I'd
simply like to say that I've had flood insurance for the 30 years I've
lived on the Atlantic coast, the premiums are not cheap and are
continually being revised upward based upon actuarial tables, and I'm
nowhere near being what anybody would consider wealthy these days nor
are
most of my friends and neighbors.

Again, this does not contest the example given.

We have about five weeks left in this year's hurricane season and, with
fingers and toes crossed, we have so far dodged the bullet and may get
through yet another such season without being struck by any hurricane
that
produced damage from flood water (as opposed to damage from high winds
and/or wind-driven rain water). I'm willing to bet you that by the time
next May 1st rolls around, you and I will have had to provide flood
relief out of the taxes we pay to thousands of ordinary Americans living
in river valley flood plains who either haven't bothered or can't afford
to purchase flood insurance and therefore didn't even try to help
themselves.

And who are not subject to the moral hazard outlined, nor were the
subject
of the example given.

Your entire moral hazard blather is more appropriate to a sophomoric
dormitory than to a discussion among adults who've been exposed to
reality. If you've ever been exposed to the kind of disaster I'm talking
about, you wouldn't waste your time arguing about the niceties of "moral
hazards"......survival trumps all of that garbage. I can tell from the
way that you argue that you've never been exposed to the kind of disaster
I've been referring to. Seems to me that when you have the opportunity to
learn something from someone who's been there and done that, you'd want to
take advantage of it instead of insisting on the last word by gratuitously
keeping the argument going.

However, I'm me and you're you, and the twain will never meet on that
twack. So be it. Enough arguing.....I've used up my week's supply. Have
a nice weekend.

George Z.



.

Relevant Pages

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