Chevies, Levees, and Bevies of Levies

For the past few days, beginning while Katrina was still at sea, I have been engaged in an e-mail discussion with Kip Esquire [A Stitch in Haste] and Phil Miller [Market Power] about the appropriate role of the federal gubmnt in disaster relief for New Orleans.

When the risk of a natural disaster can reasonably be anticipated, I would hope for two things:

1. Individuals would choose how much risk to accept themselves and how much to insure.
2. Should a disaster strike, private charity would look after the victims.

This view says that there is little reason to require, through the tax system, that people elsewhere contribute to disaster relief. It is similar to that of Dave Friedman (who has a superb defence of this position) and this posting by Kip Esquire last October. Also, see this well-worded editorial, which raises similar issues while asking whether New Orleans should even be rebuilt (a question raised several days earlier by Rebekah K).

Before Katrina hit, I was ready to post something lambasting FEMA and federal insurance programmes. After all, people choose to live in areas that they know are high risk. After all, people have advance warnings about hurricanes. Surely they should be expected to bear or insure against the risks involved with their choices (and the risks in New Orleans were much easier to approximate than the risks of being hit by a tsunami).

And then the levees broke.

Judging from this, the breaking of the levees and the flooding of New Orleans was a foreseeable risk. So why should people outside New Orleans or outside Louisiana be forced by the tax system to contribute to the disaster relief? The people living there (and their elected representatives) chose to live there and chose to take the risks involved with not building stronger levees.

Kip and Phil both argued that because the levees are part of the US federal waterways system, the federal gubmnt built the levees and had the responsibility. I'm not persuaded by the economics of this argument.

And yet...

In my gut, this is one time I'm glad FEMA is there. Not for the looters. Not for the folks who refused to heed warnings and leave. But for those who left and have nothing to return to, even if they bought flood insurance.

I guess this makes me not a very good Libertarian.