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Katrina

    What a mess… Rick and I watched the weather
channel the night before the hurricane hit. They interviewed some
people in Biloxi who were going to ride out the storm and we joked
about Katrina weeding out the gene pool in Mississippi. Sure was a lot
funnier when they were alive… I do hope that when people are rescued
from coastal devastation that the coast guard gives them a hearty “YOU
FUCKING MORON! You had 36 hours of notice that a category 5 hurricane
was headed towards you. Good thing you stuck around huh?” I realize
that some people along the coast had extenuating circumstances and
couldn’t leave, but most could have. Many of the residents of New
Orleans are just  too poor to go anywhere, but surely they could
have gone down to the Superdome, or at least higher ground. It’s
terrifying to think of the number of people that drowned in their
attics…
    The question that should come up is should New
Orleans be rebuilt? The result of this hurricane couldn’t have caught
anyone by surprise. A major metropolitan city that lies below sea level
and is surrounded by major bodies of water on three sides is never a
good idea. Not only was this completely predictable, but there is a
very real possibility of it happening any given year. Hell, it might
happen again next month. How many hundreds of billions of dollars will
it take to rebuild that city? I’m a little worried about the message
that it sends to people when they build in very dangerous places and
the federal government says, “Don’t worry, we’ll bail you out if
anything bad happens.” Don’t get me wrong, I think that if people want
to live and build in New Orleans they should, but they should also
insure against the inevitable in whatever way they can and not rely on
the rest of us to bail them out when they get flooded. Right now I think the government has a duty to rescue and get people out of harm’s way, but we gotta look at the future/
    Don’t worry, none of this will ever be mentioned.
Politicians are a spineless lot and none of them have the guts to even
voice this rather common sense question of whether or not this is a
good use of tax dollars. A great compromise would be subsidized loans,
make them responsible for paying for their own rebuilding. If they want
to live in an area that nature wants to be a swamp and/or a lake, have
at it, but you gotta pay for it yourself…

Isaac

7 replies on “Katrina”

Insurance bailouts…

First off. Send some money over there. Those folks are in great need.

Re: Insurance… I agree Isaac. We have the same sort of issues out here in LA where people insist on builing homes in high risk areas like overgrown forest areas or on bluffs overlooking the ocean. They expect federal insurance to bail them out when the inevitable mudslide or wildfire occurs. The thing is, most take the insurance money and rebuild in similar areas! Talk about not learning your lessons. Private insurance may be the answer but I can easily see the insurance industry claiming that any unforseen natural disasters, if claims are large and plentiful, risk bankrupting many firms and killing the industry. Guess what… it’s off to DC where they will lobby for a bailout. Kinda like the heavily subsidized air industry did after 911. Makes me wonder where all the money from subsidies and high profit margins go. When disaster strikes, these outfits sound like they are living from paycheck to paycheck with no “rainy day” money set aside. It doesn’t seem right… but I’m sure you’ll have some perfectly sane sounding answer for the phenomena. 😉

Randy

Re: Insurance bailouts…

Well, anything that lives on subsidies is, by definition, not worth it. If people are not willing to pay for the thing directly, then it really isn’t viable and should not be funded in other nondirect ways. It leads to reactions like you’ve mentioned. They build with no fear of consequences since the govenrment has their backs… No business that depends on subsidies deserves to be in business. No one has the “right” to build a home wherever they want at everyone else’s expense. Build where you want, but it’s your money and your decision. As far as insurence companies go, they should just refuse to insure dangerous places. Theat’s essentially what they do now. I think that the governement offers flood insurence to uninsurable places, but it’s noticably more expensive. The government should work just like a regular insurence company and charge outragous premiums or deny covrage outright to dangerous places. They should send the obvious signal that those people are on their own. I really wish that the feds would read the riot act to the people of New Orleans and the coastal gulf after the inevitable bailout. They should tell them, “Just this once, but NEVER AGAIN!” That’ll never happen though…

Isaac

Re: Insurance bailouts…

Insurence is a weird industry and I’ve never quite figured it out. It’s kind of like banking, but with higher risk. A bank weighs the risks of a loan going into default before it loans money. An insurer goes into writing covrage knowing full well that it will pay out a certain percentage of claims. They rely on the law of averages to make sure that they keep the payments in line, but big things happen… I am completely against government bailouts, but since they occur, the insurence companines don’t really have to worry about the worst case scenario. I think that they should operate like casinos do with high rollers. Even though the casinos always have an edge, there are some bets they won’t take because the negative consequences would be too much to bear (i.e. a 22 million dollar bet on a single number in roulette. The odds are heavily in favor of the casino, but they won’t take the bet because they are not willing to pay out 770 million dollars in the worst case scenario.) By limiting the amount of coverage an insurer is allowed to carry, they can insure that they are never overexposed to disasterous events. This would open up opprutunities for many new companies, so I’m sure we’ll never see this happen, it’ll be business as usual in DC…

Isaac

Re: Insurance bailouts…

Its nice to be of the same opinion as you on some thing for a change.
I should savor it while it lasts. :-]

Randy

Re: Insurance bailouts…

LOL! I always knew you were a free market type deep down:-) See, I’m not as crazy as you think I am! Doh, it’s late, gotta go to bed…

Isaac

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