Subsidizing What?

Subsidizing Catastrophe: Aid Programs Sow The Seeds Of Future Disasters Typically, this phase is referred to as "disaster recovery." What it ought to be called is "disaster facilitation," for in seeking to soothe the pain of one catastrophe, institutions of public aid all but guarantee its repetition by rewarding the bad decisions that helped make it possible in the first place. ... Yet despite the evident risk of fire in the areas that recently have burned — and the statistical certainty that they will burn again — vast sums of money soon will be poured into reconstruction of homes in the danger zone. Although well-meaning, this assistance amounts to public subsidy of recurring disaster. And subsidy it is. The difference in price between FEMA's low-interest loans and the commercial lending rate represents a cost borne by U.S. taxpayers. Building and permit fees waived to expedite reconstruction of fire-ruined homes are a financial drain on local government and, by extension, all the local residents who rely on its services.

There are certainly nits to be picked in this article. For starters, there's Krist's (the author) assumption that the "event" side of the fire hazard is entirely natural, overlooking the way human management of the landscape shapes the size and intensity of a fire, in addition to determining whether anyone will be in harm's way. His belief that people can simply not live in fire-prone areas is also questionable -- after all, nearly every part of the Earth burns eventually. Further, residents of the damaged areas are not all millionaires with their suburban "testosterhomes" and thus the ability to live anywhere they choose -- they may be people driven out of the city by astronomical land and rent prices, and attracted by the good deals that developers' political and economic power allow them to offer. Ceasing aid to these people would have to be accompanied by structural changes that would make relocating realistic for them.

A response might be that people can live in fire-prone areas, but they must bear the risks of it themselves. This is a sort of community autarky model, in which the activities at a place must be supported by local resources. The alternative, according to Krist (and this is where I want to go with this post), is "subsidizing disaster." A "spatial insurance" model of society* -- in which multiple areas are linked, allowing ones not hit by disaster to help out those that are -- prevents disasters from driving people out of disaster-prone areas. (A similar argument could be made with reference to vulnerability-enhancing behaviors.) Generous aid decreases the motivation to avoid future disaster, thus setting society up to bear the burden of aid again. Krist's complaint is that this is an avoidable cost.

The thing is, we're not just subsidizing disaster. We're subsidizing a certain lifestyle and method of interacting with the environment. There's an ideology of private property, of the right to live wherever one wants and do with one's land as one pleases. These rights are threatened by fire, which doesn't get along with certain residential and landscaping choices. Disaster aid promotes not only the recurrence of the disaster, but also the continuance of this freedom, which our society values. Krist probably does not value this (and I'm somewhat sympathetic to that position), but it's important to recognize that the subsidy is more than just a shortsighted waste of money.

*The alternatives are a "temporal insurance" model, in which you save during the good times to tide you over in the bad, and a "low needs" model, in which your resource demands are so low that bad periods aren't bad enough to hurt you.