Don't Force Taxpayers to Pay for Private Hurricane Damage

Our hearts automatically go out to the people of Florida, who are being battered by a series of hurricanes in rapid succession. But we have brains as well as hearts — and the time is long overdue to start using them.

Hurricanes come through Florida every year about this time. And, every year, politicians get to parade their compassion by showering the taxpayers’ money on the places that have been struck.

What would happen if they didn’t?

First of all, not as many people would build homes in the path of a well-known disaster that comes around like clockwork virtually every year. Those who did would buy insurance that covers the costs of the risks they choose to take.

That insurance would not be cheap — which would provide yet another reason for people to locate out of harm’s way. The net result would be fewer lives lost and less property damage. Is it not more compassionate to seek this result, even if it would deprive politicians of television time?

In ABC reporter John Stossel’s witty and insightful book Give Me A Break, he discusses how he built a beach house with only “a hundred feet of sand” between him and the ocean. It gave him a great view — and a great chance of disaster.

His father warned him of the danger but an architect pointed out that the government would pick up the tab if anything happened to his house. A few years later, storm-driven ocean waves came in and flooded the ground floor of Stossel’s home. The government paid to have it restored.

Still later, the waves came in again, and this time took out the whole house. The government paid again. Fortunately for the taxpayers, Stossel then decided that enough was enough.

In politics, throwing the taxpayers’ money at disasters is supposed to show your compassion. But robbing Peter to pay Paul is not compassion. It is politics.

The crucial fact is that a society does not have one dime more money to devote to the resources available to help victims of natural disasters by sending that money through government agencies. All that it does is change the incentives in such a way as to subsidize risky behavior.

The same money can just as well come through insurance companies. Even if most insurance companies are unwilling to insure people living in particularly vulnerable areas, or living in homes that are inadequate to withstand hurricane-force winds, there are always insurers who specialize in high risks — and who charge correspondingly higher premiums.

Lloyds of London, for example, has already been moving into the market for insurance for homes costing half a million dollars or more and located along coastal waters, whether in Florida or the Hamptons or elsewhere. If rich people want to put their mansions at risk, there is no reason why they shouldn’t pay the costs, instead of forcing the taxpayers to pay those costs.

What about “the poor”? As in so many other cases, the poor are the human shields behind which big-government advocates advance. If you are seriously concerned about the poor themselves, you can always subsidize them and avoid subsidizing others by having means tests.

Means tests are anathema to the political left because that puts an end to their game of hiding behind the poor. Compassion is a laudable feeling but it can also be a political racket.

As with so many government programs that people have come to rely on, phasing out state and federal disaster relief programs would not be easy. In an election year, it is impossible.

Fortunately, there are years in between elections, in which it is at least theoretically possible to talk sense. Whether the risks are hurricanes, earthquakes, floods or forest fires, people who have gotten themselves out on a limb by taking risks in the expectation that the government will bail them out can be gradually weaned away from that expectation by phasing out disaster relief.

The alternative is to keep on forcing taxpayers to be patsies forever, while politicians bask in the glow of the compassion racket by throwing the taxpayers’ money hither and yon, while the media applaud the courage of those who rebuild in the path of known disasters.