Reply To: Hurricane Sandy [Govt Intervention in Natural Disasters]


Unfortunately, the media has created a false argument based on the assertion that only the government can do certain things. We find the same is true of monetary issues. Despite the fact that private money has existed throughout history and successfully so, we are led to believe that only the government can issue currency. In the case of natural disasters, the media buttresses this argument by portraying those of us who argue against government intervention as callous and heartless.

There is a lot wrong with this argument, some of which involves the “unseen.” For instance, we hear the debate about flood insurance. Flood insurance is such a great thing because the government will pay for something private insurers won’t. Of course, the obvious question is: why won’t the private insurers cover this particular thing. It’s because they know that they will lose money since floods will inevitably occur. If left up to the market, no one would build in flood areas (or, at least those who could not afford the loss) since you would probably lose vast amounts of money. Instead, the loss is transferred to the taxpayers. Meanwhile, the politicians get to act as saviors.

The situation with Sandy is somewhat different, but I would argue that some of the same incentives apply. I just watched a video on of a lady pleading with Chuck Schumer that President Obama had to send help because they were “dying there.” “When is the government going to do something!!” The learned helplessness that our Leviathan state has engendered is absolutely frightening. Folks no longer see it as their responsibility to take cares of themselves because the State is always supposed to be there to take care of them instead.

Then we have the stories of electrical workers from the South being turned back because they don’t belong to a union. We all heard how in Katrina, private relief efforts from organizations like the Red Cross (which is a quasi-government organization) and Wal-Mart were denied entry into New Orleans by FEMA.

The fact is that civil society is quite capable of responding to natural disasters, but, much like in economics, it is either prohibited from doing so or crowded out by the State.