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.
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