If you look at the facts of reality, chiefly that a massive federal government, with a ginormous centralized directive called the “Department of Homeland Security,” along with all the necessary funds, jurisdiction, and appurtenances thereto, whose fundamental responsibility is to keep safe the citizens of this great nation, and in the event of catastrophe, to act as a sort of clearing house, a command center for all things necessary to alleviate the problem, presided over what is quite probably the single biggest SNAFU in recorded history.

From the normally liberal Detroit News, albeit an editorial, someone is calling out the government for their tremendous mismanagement of the Katrina relief effort. Over at the Mises Institute William Anderson says that we shouldn’t be surprised, after all,
You can always expect government to behave exactly like government

Rough Ol’ Boy gets his digs in, too. — this one is pretty sweet.

Russ Roberts at GMU provided the link to this Washington Post article that details the extent to which funds were mismanaged.

The Agitator related two pieces from Fox News, you can read them here and here

And it all goes to the same end, which is the moral hazard that rears its head in situations like this, wherein the government allows an unwise behavior to continue, and as an acting accomplice, encourage the continuance of behavior that otherwise rational individuals would likely never engage in. This pretty much sums it up:

… For example, the extent to which an insurance policy holder increases his or her risky/unhealthy behavior when he or she acquires coverage is the extent of the moral hazard. Implicit in insurance coverage is the assumption of static behavior—people should not alter their behavior as a result of being covered… insurance is meant to cover people who are expected to behave as if they were not covered at all.

However, moral hazard can manifest itself in many other ways. It can occur …when the government provides low-cost flood insurance in such flood-prone areas in which private insurers would never offer coverage, for residents may decide to continue to put themselves at risk of ruin knowing that the government will take care of them.

That latter example is what applies to New Orleans, for much moral hazard has resulted and will result when the government rebuilds, pours billions into, and continues to insure in such a risky geographical area. Moral hazard is difficult to measure directly—it examines what would have happened. Nevertheless, it is a real problem, and to the extent that it played a role in New Orleans is the minimum at which the residents themselves are responsible for their predicament.
Vic | 09.14.05 – 2:16 am | #

I swear, unless there is some earth-shattering development, I won’t be posting any more about this hurricane.