2007-09-05

Irrational Living Practices

Every year, some fairly predictable natural disaster occurs and devastates large areas of land creating human death and misery and property damage. Earthquakes, flooding, and hurricanes come to mind. After the disaster, affected regions usually prey upon the sympathy of others to rebuild their homes and cities through both charity and governmental subsidy. A notable example is the aftermath of Hurricanes Katrina and Rita. The Army Corps of Engineers was widely blamed for the failure of the levies and the subsequent flooding. 1) The inefficiencies of the legal code to deploy National Guard soldiers without the consent of a State Government combined with 2) the normal inefficiencies and ineffectiveness of government at all levels and 3) a general lack of psychological preparedness for infrequent devastating events resulted finally in an anarchistic, violent scenario of devastation and distress. The reconstruction efforts have basically followed in the same mode despite billions in subsidies and tax cuts.

The critical problem which is politically incorrect to address is who decided it was a good idea to build their house in a flood zone in the first place. In the case of New Orleans, the sad answer was everybody, but especially the poor. Since in economic terms the wealthy had far more to lose, it makes sense that the wealthiest areas of New Orleans were constructed on somewhat more secure ground. It is not fair to say, however, that the risks living below sea level next to one of the world's largest rivers which regularly changes course was properly priced into the housing market. Most people who build their houses in flood zones are either ignorant of the risks, risk loving and possibly irrational, a very high personal discount rate, or a very high preference for living in those areas. Unfortunately psyche of humans, like many pack or herd species, is far more prone to feel secure in a clearly irrational situation so long as everyone else does the same.

A related problem of course is the question of climate change. Far more people are in far greater danger than Katrina owing to probable climate change from human activity. Many major cities are rationally addressing the fallout by considering dikes and other technologies to ensure the cities survive intact. Others are intelligent and ambitious enough to build flood-proof houses.

Whenever possible, avoiding a confrontation with nature is the wisest course of action. Reducing greenhouse emissions and not constructing cheaply in a predictable future disaster area are good rules of thumb. In the event of an inevitable but unfortunate catastrophe, federal governments in all of their fiscal inefficiency ought not be expected to pay.

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