Here we go again


Now California wants government bailout after the flood
Now Northern California has been flooded, and the push is on for additional government funding for flood control measures.

Here's the telling paragraph.

But even the most ambitious projects will not eliminate the threat. As residents mop up from the latest flood, officials in the region plan to build tens of thousands of new homes in flood-prone areas.

At some point, you would think that someone would ask why build in flood prone areas?

The answer is surprisingly simple. Because government has assumed the cost of flood insurance, builders and developers face less liability and property owners have no disincentive.

In other words, government action directly affects marginal behaviors which increases risk.

We see it again and again.

Underwrite deposits and watch savings and loans give risky loans.

Pay unwed mothers and watch fewer mothers marry before having children.

Promise flood insurance and watch people build in flood plains.

It is a pattern repeated again and again.

I could say something about paving with good intentions, but I think I have made the point.

— NeoWayland

Posted: Sun - January 8, 2006 at 05:04 AM  Tag


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