Comment by iambateman | Hacker News Reader

Comment by iambateman | Hacker News Reader

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> "Cason, the Coral Gables mayor, said Congress ought to create what he called a “resilience fund” for homes threatened by the water—but he doesn’t think it will."

No. No no no no no. Absolutely not.

Mr. Cason made a crap ton of money, spent millions of dollars "investing" in property which would soon become worthless and now he's blaming CONGRESS?

Mr. Cason. Sea rise isn't your fault, but buying a gorgeous, lavish beach house where it will no longer exist is your responsibility.

Congress should create a resilience fund for kids at school who have no food. Congress should make a resilience fund for veterans who can't work. Congress should make a resilience fund for folks bankrupt because of medical debt. But Congress need not send a bucket to the millionaires of Miami.

Postscript: not everyone who lives in Miami is a millionaire. I've hung out with very poor folks in Miami. That said, The first homes to go are going to be the ones owned by the elites on the water.

It's a case of moral hazard. If we bail out those who built in areas which they knew at the time might eventually be submerged, it has the negative effect of leading to inefficiently high amounts of threatened homes being constructed in the future.

Same with bailing out areas that get wrecked by earthquakes or forest fires or any other natural disaster. Our natural inclination is to support people this happens to, and there is a positive in that we achieve a wealth transfer to people that just had a big hit in their well being, but if it becomes policy then going forward resources will be inefficiently allocated.

The somewhat depressing thing is we probably find ourselves bailing out people who (whether they knew it or not) were only engaged in the risky behavior that lead to them needing to be bailed out because of the social norm of the government bailing out people in that type of situation.

But where do you draw the line on risk? Pretty much everywhere you live has some form of risk. If it's not earthquakes, or flooding, it's tornadoes, or drought, or hurricanes, etc.

Part of the point of having civilization is as a kind of insurance. If you live in a once-in-every-two-hundred-years-massive-flood-plain, are you saying living there is risky and the government should not have emergency disaster relief?

Most of the coastal cities in the US including Manhattan, could be under water from global warming in the future. Are we saying that people who move to New York city should be aware of increased potential for damage from global warming?

And if they should be aware of these things, perhaps we should stop ignoring global warming in our political system. It'll be cheaper to mitigate it earlier, than way 50 years for flooding to massively increase.

I think the solution is that people and cities buy insurance. Disaster insurance for a place that only floods once every fifty years will be much cheaper than for places that get yearly hurricanes or earthquakes, for example.

It makes sense that the cost of living in dangerous places be built into the cost of living there, instead of being actually encouraged with free government money.

No insurance company will offer it because it is too risky. Also you would need a mandate for everyone to buy it. It'll be a FEMA thing if anything and yes I would guess that Congress will authorize bailouts especially for wealthy landowners who donate to their campaigns.

John Stossel of ABC (and later Fox News) has waged a crusade over the years against government flood "insurance" and coastal housing bailouts: http://abcnews.go.com/Business/Insurance/story?id=94181

He'd have more credibility if he canceled his government flood insurance.

http://crooksandliars.com/news-hound-ellen/john-stossel-just...

That's similar to the criticism that Ayn Rand collected at Social Security check. I think you can stand for a principle while still participating in the current system that you're paying for.

My gut idealist wants to disagree with you, but the rational economist in my head is telling me you're correct.

We shouldn't hold individually rational (net benefit) decisions against someone's principles.

Maybe so, but they can certainly be ignored - and I say that thinking Stossel is correct in his opinion on this matter.

I think the term you are looking for is "hypocrite".

Yeah, if you want to change the definition of the word to suit whatever meaning you intended the insult to have, sure.

Not meant as an insult to anyone... it's just the definition of hypocrisy. If you espouse some belief but act otherwise (e.g. want to eliminate social benefits but then claim them because it is rational or because of the system).. then you are a hypocrite.

No it's not at all.

If you believe drugs should be legalised but you won't sell them in public are you a hypocrite?

You can want system change and also work within it as it exists.

Your example doesn't make sense. If you believe drugs should be illegal but you use them then you would be a hypocrite. If you believe drugs should be legal and you sell them (in private or public) or even use them then you are not being hypocritical. If you sell then privately but not publically you're not being hypocritical either.

It does make you look unprincipled and inconsistent however.

Disagree. If you think somebody (in this case the government) is mispricing something, it's not hypocritical to say "this is mispriced" and still take advantage of it.

Is it objectively mispriced? Probably. But we would have to have access to all of the premium received and payouts made by FEMA. https://www.fema.gov/use-flood-insurance-study-data-availabl...

Of course it is mispriced... Large scale cataclysmic damage is just too expensive to insure, just as war is or an act of God is and that is why the government is the insurer of last resort. Ultimately, it will all come out of taxes. The government will bail people out, maybe not at full market value individually but definitely at the bank level. It will be the same dynamic as the 2008 housing crash.

Wealthy people getting tax dollars to pay for their risk mitigation. What else is new.

I do feel sorry for older, poorer communities that may have their homes and assets wiped out. To the extent they haven't already been replaced by newer, wealth-targeted construction. I hear it's increasingly difficult to even find an "old style" Florida community directly on the coast. About... 20 years ago (yikes!), I got to spend a couple of weeks in one that was in the process of having its beach front turned into high-rises. I understand that is complete, now.

Alot of the Florida east coast has "sandbars" to the east of it. It's basically like a long vertical island. You have to be very wealthy to purchase a home here. These are the people who are the most threatened by hurricane and the like. Miami's sandbar consists exclusively of wealthy people.

I'm not sure what being rich has to do with this? If we understand the causes correctly, then this is just a negative externality. Negative externalities aren't bad only when the affected party is poor, they're bad because the affected party didn't have any choice in incurring the cost of someone else's behavior.

I agree with you in theory, but if I drive a car straight into the ocean, do I deserve a government bailout? If I land a helicopter in a marsh, and it is ruined, should I be bailed out?

This is the same thing, but just much slower. Tons of that coastal housing is new, the idea of rising sea levels is certainly not new, and we've seen this coming for a long time. This is basically choosing to drive your house into the sea, and then demanding a handout.

I do think we should subsidize moving buildings farther inland, or putting them on stilts like they did in the Rockaways post Sandy, but just straight buyout? Forget about it.

OK, so after the homes of the elites are gone, then is it okay to do something about this? Like, what is the cutoff point where it's okay to help people who lost their homes? To me this just seems like "not our problem", and not just a refusal to subsidize elites. Which I suppose is a fine position to take except all the other ways we as a nation are comfortable bailing out businesses and individuals. It is... interesting to observe the times people support that and the times they don't.

Can't speak for other people obviously, but my take on it is utilitarian. Houston, we bail out if needed. Because we need Houston. New Orleans, we bail out if needed. Because we need New Orleans. There are several ports on the East, West and Gulf coasts that fall into the "we need them" category. The rest we don't need, so we would not subsidize their rescue unless extra money was available from somewhere.

Myrtle Beach and Miami are just not as important as NIT (Norfolk) and Portland. And higher up the urgency ladder are places like Houston and New Orleans, that must be saved and held at any cost.

Are you saying we need Houston and New Orleans because of their importance to the energy industry? The same energy industry that's causing global warming.

Most of the Midwestern agricultural products exported overseas get transshipped from river barges or trains to oceangoing ships at New Orleans. Likewise, Houston is a major container port for finished goods. We need these ports for their value as ports. Condemning these ports over some moral judgement for a portion of their throughput shouldn't have any bearing on this kind of cost-benefit analysis.

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