Sunday, February 25, 2007

Subsidizing disaster

This is utter insanity: faced with the fact that the market rate for insurance in the more hurricane-prone areas of Florida is making people less willing to live there, the government of Florida has decided to back hurricane insurance with state money in order to lower insurance costs, and thus the cost of living in dangerous areas.

In other words, the state of Florida is actively encouraging people to live in more dangerous conditions than they would subject themselves to under free market conditions. Insurance costs provide a nice way of getting people to weigh risks and benefits, but it only works if the government doesn't have its finger on the scale.

Usually, state interference in the economy is damaging because it makes us poorer. This will do that, but it will do more; people who would otherwise have lived in safer areas may very well die because the government has needlessly urged them into harm's way. And for what gain? None, except to give some state legislators a chance to buy votes, and most likely benefit some developers and building contractors.

Can you imagine the uproar if anyone from the private sector recklessly endangered lives in this fashion? They'd be lucky to stay out of prison.

One of statism's chief legitimizing myths is the claim that it protects us from harm. Think about this the next time you hear that.

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