The Private Economy and Government Intervention

It was reported in today's business section of the Arkansas Democrat-Gazette that insurers are showing some concern over how they will be able to pay for all these hurricane-related claims without some help from the government. Aside from the refineries, pipelines, and off-loading facilities that benefit the entire nation's economy, how much government help can reasonably be expected?

Too many are concerned that FEMA fell flat on its face in response to Hurricane Katrina. So if this is government response at its best (??), how can we expect that another government agency or two will do any better? Perhaps it is that the US government is trying to be all things to all people, and the natural order of economics is suggesting that this is not possible. It is not unlike churches that try a hand in as many ministries as it can possibly get involved in. They soon discover that they should focus on the one or two things they can do well, and stick to these.

When it comes to rebuilding the city of New Orleans, regardless of what is finally decided to be the best solution overall, the government will no doubt be involved. However, the coast lines are composed of a few public beaches; the rest is made up of high-dollar hotels, condos, and casinos. How much concern should the government show? How will millions of government dollars spent in southern Mississippi benefit the taxpayers of, say, Michigan? Those who own property on the Gulf Coast know perfectly well that Katrina and Rita were not the first hurricanes to hit them, nor will they be the last. And lest we forget, those who own property on the Gulf Coast - whether private or commercial - are generally on the higher end of the economic scale. They are in a better position to pay for their own insurance and losses based on their own actuarial tables than the rank-and-file folks who lost their homes in the inner city areas of New Orleans. You can't buy flood insurance in certain areas? Then don't build there. And if you choose to build there, do so at your own risk.

I have no problem with the US government helping folks who can prove they lost everything they own. In many instances, folks also lost their jobs when their places of work got leveled or severely damaged. These folks lost everything including the means with which to rebuild. Insurance, however, should not be subsidized by the US government. One can either afford it, or one cannot. It is sort of like a working person who is on the market to buy a new car and must consider the operating and insurance costs associated with a particular model; some will require more than others for several reasons, not the least of which will be repair/replacement costs associated with a particular model. We do not, or should not, expect the government to subsidize our new sports car/luxury car/SUV purchase because we have somehow come to believe that we are entitled to that particular model.

Government can force us to purchase insurance, such as auto liability, but such is the responsibility that comes with owning PRIVATE property. Long before Katrina and well after Rita, the government cannot be all things to all people. It is high time we stop expecting someone - or something - else to pay for our own mistakes or misfortune. Things happen. It does not mean that someone is somehow responsible and must therefore pay.