There's a term in economics called full-cost accounting. It's basically academic-speak for the idea that when you buy something, you should pay not only the sticker price, but also for environmental damage in shipping or manufacture, the cost of disposal or recycling, etc. Since it's kind of a geeky economics term, it was fascinating to see an entire editorial this week devoted to the idea that people who live near water should perhaps be prepared to pay the full price.
It'd be pretty hard not to feel bad for the sufferers from Hurricane Katrina, especially as they're about to receive a double-dose with Hurricane Rita. Obviously, every measure should be taken to ensure their safety, reunite them with their loved ones, and help them rebuild their lives. But maybe not exactly as they were.
See, the federal government, via your pocketbook and mine, subsidizes these folks in New Orleans and elsewhere that like living near water. That's because flood insurance is socialized. Private insurers offer it - but it's administered and subsidized by the federal government. So instead of preparing for floods by paying realistic premiums or living away from flood-prone areas, we wait for perfectly predictable disaster to strike. Then, with mind-numbing monotony, we collectively foot the bill for people living below sea-level or in a floodplain to rebuild in exactly the same place. Again and again and again.
Here's an idea - let's make flood insurance a private cost. Let the folks who like beachfront housing be aware that they have to pay for their house when the pretty ocean decides to spawn a hellish hurricane. We could keep rebuilding on the coasts and in the floodplains, but that just encourages people to live there. So let's try something new. Let's allow Trent Lott to pay for his own coastal home - since neither you nor I will be sitting on the porch any time soon.
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