pageok
pageok
pageok
A Modest Proposal to Deal With the Financial Crisis:

Underlying the financial crisis is bad mortgages. There are bad mortgages because housing prices have plunged, especially in South Florida, California, Arizona, and Nevada, and Rust Belt cities.

My thinking is that instead of simply spending taxpayer resources to bail out the financial industry, let's find a way to move a long-term liability off the books at the same time.

One major federal liability is having to pay for damage from floods. The government is spending billions to reconstruct New Orleans and other Gulf areas, and the money will just have to spent again when a Category 5 storm hits, as it will eventually. And it seems like every decade or so, the Mississippi floods and the government winds up paying for that, too. Not to mention the homeowners with beach houses all along the hurricane-prone East Coast.

So the government could use the money it would otherwise use to bail out the financial industry instead to pay people to abandon their flood-prone communities. The condition would be that they have to buy a new house in one of the markets noted above. The taxpayers get off the long-term hook for New Orleans and the like, the newfound demand props up the housing market, and the government doesn't get any more involved in the financial market than writing checks to migrants from flood-prone areas.

I'm sure that Obama and McCain will jump on this proposal immediately.

Happyshooter:
Detroit is down to $1,500 homes.

The problem is that you have to spend $15,000 upgrading all doors and barring the windows. You also have to spend $125 for a CCW license for each adult, $150 for the CCW class, and between $250 and $500 for each pistol to be able to walk out to your garage and drive the car (depneding on whether you like the Ruger LCP or a Glock).
9.19.2008 12:36pm
pete (mail) (www):
A large number of those displaced by the hurricanes are too poor to buy the houses that you are talking about. The people who could afford the beach houses could work with your plan, but the demographics of a place like Galvaston are people rich enough to afford a beach front house and the very poor. I do not know if you have visited Galveston but it is basically nice tourist areas and a lot of poor people. I also suspect a good number of the people who left New Orleans after Katrina ended up there or in other places in the Houston area that were hit hardest by Ike.

I agree that it is a bad idea to overbuild areas that are vulnerable to hurricanes, but good luck convincing people not to live there.
9.19.2008 12:38pm
J. F. Thomas (mail):
You don't have the foggiest idea about what the national flood insurance program involves, how it operates, or the complexities involved in Federal flood control policy, do you? Although the flood insurance program does lead to some risky behavior (e.g., building expensive vacation homes on barrier islands), overall the flood control program significantly reduces the risks and damage from flooding throughout the nation. Where there has been catastrophic flooding (e.g., New Orleans after Katrina), it is mostly because the flood control features did not work as designed because of poor construction or lack of funding prevented proper maintenance or construction of all authorized flood control features. In Louisiana in particular much (up to 60%) of the immediate cause of wetland loss (which is the cause of flooding in many instances) is directly the cause of oil extraction and exploration. The oil industry has not had to pay a penny to repair the damages they have caused in southern Louisiana.
9.19.2008 12:39pm
Milhouse (www):

A large number of those displaced by the hurricanes are too poor to buy the houses that you are talking about.

Hence the payments. Or did you miss that part?
9.19.2008 12:41pm
Angus:
I'm pretty sure that Bernstein is being sarcastic. Or, at least, I hope he is.
9.19.2008 12:45pm
Profane (mail) (www):
Its a MODEST PROPOSAL folks. In other words, you are taking it far too seriously.
9.19.2008 12:46pm
common sense (www):
A Modest Proposal is a literary reference, and it indicates that the proposal could not possibly be serious.
9.19.2008 12:47pm
pete (mail) (www):

Hence the payments. Or did you miss that part?


When did Bernstein say that they would buy the houses for them? he was very vague about the details. If he means that the government buys these people houses and then requires that they live them for X number of years fine.

Here is what he said:


So the government could use the money it would otherwise use to bail out the financial industry instead to pay people to abandon their flood-prone communities. The condition would be that they have to buy a new house in one of the markets noted above.


If he means that he would give these people a check for lets say $250,000 and they have to spend it on a house in a state like california, arizona, or michigan, fine. That is different from saying that each person gets some money ($10,000, $50,000, $500,000?) and that they have to buy a house. $50,000 isn't going to be enough to help someone on foodstamps buy a $200,000 house.
9.19.2008 12:51pm
pete (mail) (www):

A Modest Proposal is a literary reference, and it indicates that the proposal could not possibly be serious.


I am aware of the literary reference. I assume Berstein doesn't think the federal government should do much of anything to help either the financial crisis or the reconstruction effort other than to get out of the way, which as a libertarian is a definsible stance.
9.19.2008 12:55pm
J. F. Thomas (mail):
For Bernstein to assume the mantle of Jonathon Swift, he must at least have a working knowledge of the subject matter. That is the minimum requirement for effective satire. He merely criticizes a program he knows nothing about as a solution to another problem.

Hence the harshness of my post.
9.19.2008 12:58pm
davidbernstein (mail):
In a truly rational world, something like this might actually work. But in the real world, no politician in their right mind would ever suggest anything like this, hence it's a "Modest Proposal" (see Swift) and not to be taken seriously, which is why I didn't flesh out the details. It is fun to show the multiple levels of government irrationality, though.
9.19.2008 12:58pm
deepthought:
Ia agree with the proposal. And we should relocate people from tornado prone areas, earthquake prone areas, and fire prone areas (California, with two out of the three, would be depopulated.) Why limit it to disasters, how about people who make bad political decisions? I would also depopulate Republican prone aress.
9.19.2008 1:01pm
davidbernstein (mail):
JF Thomas either works for the Army Corps of Engineers or he neglected to sell his shorts Wednesday afternoon.

I'm glad to hear, though, that the tens of billions of dollars we're shelling out to rebuild the Katrina damage isn't really a problem, because it's only a result of political failures by the government, and our government is, of course, working perfectly now as we speak.
9.19.2008 1:01pm
Mike& (mail):
This comment thread is a Class 5 hurricane of ignorance.

How quick the illiterate are to strike.
9.19.2008 1:05pm
A.C.:
If anyone can figure out how to get employers back into rust belt cities, I'm sure the employees would happily by houses there. That's the main problem in those places.

Florida plus California and the neighboring states have no excuse. All that activity there was just stupid. As stupid as building in a flood zone, really.
9.19.2008 1:08pm
J. F. Thomas (mail):
JF Thomas either works for the Army Corps of Engineers or he neglected to sell his shorts Wednesday afternoon.

Really, the self-loathing at George Mason must be astounding, especially on pay day. How can you stand to take money from the state every two weeks? Shouldn't you guys be actively plotting to put yourselves out of a job. The existence of your department (and the economics department over there) is something only Jonathon Swift couldn't even make up.
9.19.2008 1:17pm
Aultimer:
An alternative modest proposal would be to federalize property law enough to eliminate non-recourse mortgage as the default in Cali and a couple other states (if it takes a constitutional amendment, self interest of the 40-some other states should suffice). That would fix the bulk of the defaulting mess, no thanks to the dopey loan officers who didn't price the non-recourse risk very well.
9.19.2008 1:19pm
Curt Fischer:
My favorite modest proposal is from a 2003 issue of Nature. It says that the deep subsurface, mantle, and core of the Earth is understudied compared to the entirety of outer space. The remedy? Using a nuclear bomb to blast a fissure in the ocean floor, in order to sink a molten iron probe weighing between 100,000 and 10,000,000 tons so that it can relay back information about what's going on down there.
9.19.2008 1:19pm
ASlyJD (mail):
To repeat a popular meme in this crisis, disaster relief is yet another example of privatizing the benefits and socializing the risks. The wealthy who build the expensive beach houses or mountain retreats in fire prone mountains get the benefits of the highly desirable location and the ensuing high resale value.

If the housing market was not distorted by disaster bailouts, the hurricane and fire prone land would be discounted to account for the additional risk of rebuilding expenses.

In this more rational world, low income disaster victims would understand that in exchange for the cheap land, they are taking on the risk of losing everything. (How's that for law student naivete?)
9.19.2008 1:27pm
ChrisIowa (mail):

I'm sure that Obama and McCain will jump on this proposal immediately.


Are you saying they should act Swiftly?
9.19.2008 1:28pm
J. F. Thomas (mail):
I'm glad to hear, though, that the tens of billions of dollars we're shelling out to rebuild the Katrina damage isn't really a problem, because it's only a result of political failures by the government, and our government is, of course, working perfectly now as we speak.

Whether or not the government spends tens of billions of dollars for Katrina repairs, the fact is that the Gulf coast is vital to the economy of the United States, producing a quarter of domestic oil (more than Alaska), much of the port facilities for imported oil (and the only facility to handle super tankers), much of the refinery capacity of the country (as well as the pipelines that serve inland refineries), 3/4 of the seafood. Not only that, the Mississippi and the port of New Orleans and Baton Rouge is the conduit for much of the grain and produce that is exported to the rest of the world.

People don't just live in hurricane and flood prone areas because they like the beach, but because such areas are vital to commerce and industry. With proper investment in infrastructure, building standards, and restrictions on where things are built (much of which is an anathema to you libertarians), much of the damage caused by hurricanes and floods can be mitigated.
9.19.2008 1:30pm
Mad Max:
How can you stand to take money from the state every two weeks?

GMU gets about 60% of its funding from the state, so he only hates himself three days a week, and loves himself the other two.
9.19.2008 1:30pm
J. F. Thomas (mail):
An alternative modest proposal would be to federalize property law enough to eliminate non-recourse mortgage as the default in Cali and a couple other states (if it takes a constitutional amendment, self interest of the 40-some other states should suffice).

So you are saying that bankers are being victimized by homeowners and need to be protected from them? That is rich!
9.19.2008 1:34pm
Mad Max:
So you are saying that bankers are being victimized by homeowners and need to be protected from them?

Yes, just like credit card companies need protection from the greedy bums who declare bankruptcy out of the criminal desire to get out of paying their credit card bill!
9.19.2008 1:37pm
Ken Arromdee:
How can you stand to take money from the state every two weeks?

To actually answer this question seriously in a way probably like how he'd answer: He can't stop paying taxes, and you're not demanding that he do so. In other words, you're not really demanding that he avoid the government--rather, you're demanding that he avoid the beneficial effects of the government while continuing to accept the harmful ones.

If it was possible to avoid both tax-funded programs and taxes, he would have to do so to avoid being inconsistent. But it's not.
9.19.2008 1:40pm
loki13 (mail):
Ken,

I think that is, well, a supreme amount of rationalization. It's sort of like the cop who finds out that others in his department are stealing drugs from the evidence room and selling them; so why shouldn't he?

DB could work at a thinktank, or a corporation, or any of a number of other libertarian-approved entities. He chooses not to. Personally, I think it is no big deal (I happen to think that government expenditures in higher education have been great for America) but I think your rationalization, um, justification is pretty silly.
9.19.2008 1:56pm
J. F. Thomas (mail):
In other words, you're not really demanding that he avoid the government--rather, you're demanding that he avoid the beneficial effects of the government while continuing to accept the harmful ones.

No, I would imagine that the self-loathing comes from the fact that the government is always incompetent and always produces and inferior product from that produced by the free market. Ergo, anyone who works for the government must do so because they can't hack it in the "real" world and must be an incompetent themselves. So David must consider himself a failure that he must work at a public school offering an inferior product to a bunch of morons who couldn't get into a private institution (after all, who would attend a public school if a private one always offers a superior education since public education--indeed anything offered by the government is by definition inferior).
9.19.2008 2:01pm
DiverDan (mail):
J.F. Thomas stated:


In Louisiana in particular much (up to 60%) of the immediate cause of wetland loss (which is the cause of flooding in many instances) is directly the cause of oil extraction and exploration. The oil industry has not had to pay a penny to repair the damages they have caused in southern Louisiana.


Actually, J.F., the extraction of oil and gas has little or nothing to do with the loss of wetlands or the subsidence of land in Louisiana. Unlike Coal mining, which has caused subsidence and sinkholes in places like West Virginia, Illinois &Pennsylvania, the oil &gas is being extracted from pockets that are deep, and covered with an impermeable top (usually a salt dome) which prevented the Oil &gas from escaping in the first place. Also, oil &gas removed is almost always replaced with saltwater injected into the field to maintain pressure. The loss of wetlands is in fact the result of natural erosion and compaction, when the natural cycle of replacement through periodic flooding (which deposits silt carried by the Mississippi)has not been allowed to occur. If you want to lay the blame for this loss on someone, try to be at least a little accurate -- blame the US Army Corp of Engineers, by channelizing the Mississippi in order to permit large amounts of commerce down the river (think thousands upon thousands of barges, filled with grain from the Corn Belt, along with many other commodities), has long interferred with the natural course of the Mississippi (which, if it were entirely left to its own devices would by now have bypassed both Baton Rouge and New Orleans while it moved to the west and followed the Atchafalaya River). You want the wetlands back to protect New Orleans? Then let the Mississippi go back to its natural course, let it flood at will to build up the wetlands with silt, stop channelizing the River and kill all the transportation business from Baton Rouge to New Orleans, and what is left of the river south of Baton Rouge to New Orleans will become a big muddy, shallow lake, much like Ponchatrain.
9.19.2008 2:02pm
Don Miller (mail) (www):

You don't have the foggiest idea about what the national flood insurance program involves, how it operates, or the complexities involved in Federal flood control policy, do you? Although the flood insurance program does lead to some risky behavior (e.g., building expensive vacation homes on barrier islands), overall the flood control program significantly reduces the risks and damage from flooding throughout the nation. Where there has been catastrophic flooding (e.g., New Orleans after Katrina), it is mostly because the flood control features did not work as designed because of poor construction or lack of funding prevented proper maintenance or construction of all authorized flood control features. In Louisiana in particular much (up to 60%) of the immediate cause of wetland loss (which is the cause of flooding in many instances) is directly the cause of oil extraction and exploration. The oil industry has not had to pay a penny to repair the damages they have caused in southern Louisiana.


Apparently you don't get the idea that the flood control measures IE Levees are the problem.

Levees are a short term fix to a long term problem. The land is below sea level and prone to flooding. Permanently and forever.

The Government screwed up by allowing the levees to be built in the first place. They screwed it up more by paying for them to be built. They really hosed it when the levees failed by not recognizing their hubris in challenging Mother Nature and are attempting to rebuild them. They will fail again and we will be stuck with the same problem all over again.

Anything built in a flood plain is temporary. The Government should not encourage flood plain building by providing "insurance" or building flood control measures.

Your 60% wetland loss blamed on oil and gas exploration sounds like a made up statistic. You might not have made it up but someone did. I could find historical wetland loss caused by the construction of levees in floodplains. IE the whole 9th ward in NO is former wetland.
9.19.2008 2:05pm
Happyshooter:
An alternative modest proposal would be to federalize property law enough to eliminate non-recourse mortgage as the default in Cali and a couple other states (if it takes a constitutional amendment, self interest of the 40-some other states should suffice). That would fix the bulk of the defaulting mess, no thanks to the dopey loan officers who didn't price the non-recourse risk very well.

Good reasoning, but...

I practice partly in this area of law in a recourse state.

Because of the assembly line nature of foreclosures, 99% of them are done via a process that is quick, cheap, and easy, and results in getting the property under vested lender ownership and quickly marketable.

The downside is that using that method, and getting the property moved as quickly as possible from the default (bad) catagory of the bank books into a marketable asset for sale (good) catagory means the debt is transformed into non-recourse.

I have done work in the other 1% method, which takes 4-6 times as long (many many times the legal fees) but results in the property and a judgment for the left over debt after the sale. It is only used in very special circumstances, almost never in home loan defaults.

In recourse states most of the time the mortgage ends up being non-recourse. It is not really a factor.
9.19.2008 2:09pm
SpenceB:
["There are bad mortgages because housing prices have plunged.."]

___________

...and why have housing prices plunged ?

Because housing 'Demand' dropped, but 'Supply' remained high. {Economics 101}

Market "Prices" communicate reality and truth... which are very good things for everyone.

Why are lower prices a bad thing (??) Certainly, lower prices are good for buyers.


Many financial institutions/investors made bad decisions lending money to vast numbers of people who could not pay it back -- resulting in huge over-demand for houses/condos & speculative over-supply by developers. When that enormous error was painfully realized -- lending/credit was sharply curtailed & supposed book-keeping 'assets' were correctly revealed as 'losses'. The mess rippled throughout world financial institutions.

Why should average citizens like you & I cover their foolish losses... or trust the gigantic, failed Federal regulatory bureaucracy to fix anything ??

+++

Government (taxpayer) buys of houses in natural-disaster areas is just more foolishness-- covering the losses of people who made bad economic decisions.

Might as well set up a Federal office in Las Vegas to pay back all the people with losses -- the Vegas industry would love such a setup... as Wall Street fat-cats now adore the Bernake/Paulson bailouts.
9.19.2008 2:10pm
NickM (mail) (www):
Food prices have gone up dramatically. I have a modest proposal to deal with that and the flood disasters.
Eat the refugees.

Oh, and ChrisIowa wins the thread.

Nick
9.19.2008 2:16pm
pete (mail) (www):

People don't just live in hurricane and flood prone areas because they like the beach, but because such areas are vital to commerce and industry. With proper investment in infrastructure, building standards, and restrictions on where things are built (much of which is an anathema to you libertarians), much of the damage caused by hurricanes and floods can be mitigated.


And a lot of people live there because that is where they are born or because they can't afford to live anywhere else. That is the case in places like New Orleans, Galveston and Mississippi. And these are often the same people who refuse/are not easily able to leave when a hurricane is coming.

New Orleans is a lot more important to the nation's economy than Galveston, but Galveston used to be the biggest city in Texas and the center of Texas commerce before the Hurricane of 1900. Except for tourism and the med school, there is not that good of a reason to keep rebuilding Galveston since the shipping has moved to Houston and Galveston is a lot more vulnerable to hurricanes than Houston is.
9.19.2008 2:19pm
ejo:
you have no idea how flood insurance works-is this another thread about how flood insurance, like fannie mae and freddie mac, are cost free? and building homes in areas prone to wildfires is risk free as well.
9.19.2008 2:23pm
CB55 (mail):


1) Stop or limit the growing influence of small, rival banks/investment houses and ensure that control over the nation's financial resources remain in the hands of a few major investment groups.
2) Ensure that that consumers feel empowered with creative bad debt.
3) Pool the meager reserves of the nation's major investors into one large reserve so that all investors are motivated to follow some formula of loan-to-deposit ratios while engaging in risky investments; this protects at least some of them from currency drains and bank runs.
4) Should this cartelization approach lead ultimately to collapse of the whole banking system, shift the losses from the owners and major investors to the taxpayers.
5) Create conditions of a national crisis, but offer up the only financial solutions that is more pleasing to investors than to taxpayers. Since these decesions are made in secret there is no public record and no outside public input. Congressional hearing are made after the fact.
6) Place all solutions on the fast as to law, regulation and precident so that no one has the time for debate, hearing or reading of the fine print.
7)Create a universal system of capitalism with out failure for those too big to fail at the cost to tax payers (the system punishes taxpayers with the high cost of debt and higher taxes)
8) Create the conditions of boom bust cycles - if you liked the S&L, Mexican and the 2008 bailouts you will like the next one
9) Reward corporate executives with hypercompensation even if their companies fail, but tell their workers that they need more education/training, experience for their next job if they can find one and if they do 30-40% of them will find that they are underpaid and or under employed
10) Convince consumers that outsourcing is good for them and is for the greater good.
11) Lie and undereport the bad news about the economy even as the Ghost Economy of High Finance and Investment grows bigger and more secreative than the economy we think we know
12) Create one single and universal banking and finance system with one monetary policy. Replace nationalism with trade and money
9.19.2008 2:23pm
Ben P (mail):

I could find historical wetland loss caused by the construction of levees in floodplains. IE the whole 9th ward in NO is former wetland.


So is 90% of the land DC is built on?

I don't really care about Oil Exploration, but there is a larger point here in that People Tend to live in wetland/floodplain areas because they tend to be useful.

People live in Midwest floodplains because they're very agriculturally rich. New Orleans is a port city on a river delta, there's not really a place to build in the general area that wont' be flooded every so often.

Yes, I suppose government mandated flood insurance is "encouraging" development in those areas, but the causation primarily flows the other way. People built in those areas because of their intrinsic usefulness, and the floods occured, so the government adopted a policy to attempt to retain the usefulness of those areas while socializing the dangers.
9.19.2008 2:27pm
Mad Max:
Anything built in a flood plain is temporary.

But farms there produce four food and one commerce! Five food if you have Civil Service!
9.19.2008 2:32pm
dew:
J. F. Thomas : the fact is that the Gulf coast is vital to the economy of the United States, producing ... 3/4 of the seafood.

Not even close. Try "15%" of US seafood. By weight or $$$, take your pick.

J. F. Thomas : You don't have the foggiest idea...

People in glass houses and all that.
9.19.2008 2:32pm
Ben P (mail):

But farms there produce four food and one commerce! Five food if you have Civil Service!


I'm not sure if it's more sad that this came up here, or that I understood this and laughed at it.
9.19.2008 2:47pm
CB55 (mail):
Today we learn what Bush, Obama, McCain could not do together or alone. Paulson, Bernanke, and Geithner did in 2 days what the former 3 could not do for 2 months on a walk thru Wall Street and the world's economic market. Build calm and return confidence in the system.
9.19.2008 2:50pm
ejo:
shouldn't we wait for more than a one day rally before declaring victory?
9.19.2008 2:57pm
J. F. Thomas (mail):
Actually, J.F., the extraction of oil and gas has little or nothing to do with the loss of wetlands or the subsidence of land in Louisiana. Unlike Coal mining, which has caused subsidence and sinkholes in places like West Virginia, Illinois &Pennsylvania, the oil &gas is being extracted from pockets that are deep, and covered with an impermeable top (usually a salt dome) which prevented the Oil &gas from escaping in the first place.

Actually you are wrong. It is a hotly debated question whether the extraction of oil and gas causes subsidence or not, but there is good evidence indicating that it does. The subsidence rate is greater in areas where onshore oil and gas extraction has taken place and there is evidence that the continental shelf is actually fracture and tilting downwards because of the oil and gas extraction.

Aside from that, there is no doubt that the canals the oil companies cut in the wetlands to service both the fields and the pipelines have led directly to massive wetlands losses--especially when these canals are cut through the natural levees created by bayous.

It is true that the flood control and navigation features of the Mississippi have significantly starved the wetlands and maintaining the current navigation channel does result in much of the remaining sediment being deposited into the deep ocean, but the oil industry is at least partly to blame for the sorry state of the wetlands in Louisiana (estimates range from 30--60% of the damage)
9.19.2008 2:59pm
dew:
DiverDan : Actually, J.F., the extraction of oil and gas has little or nothing to do with the loss of wetlands

Unlike some folks, I won't pretend to be an expert, but:
(a) I have seen it claimed a few times before that extraction of huge volumes of oil/gas, especially natural gas, is probably connected to accelerated loss/sinking of wetlands in recent decades. The most recent was a prominent National Geographic article in a "Katrina" edition (OK, not quite scholarly, but I consider it probably more reliable than anonymous blog comments). If you have a good source disputing this, I for one would be happy to read it.
(b) thousands of channels dredged for oil/gas pipelines around the coast have been blamed for accelerating the erosion of the LA marshes.
9.19.2008 3:01pm
CB55 (mail):
ejo:

This is not victory and no one has said so. I stated here that the plans, details and the real costs will remain secret to mortals like you and I just as they were for Iraq War I and II and the S&L and the current bail outs. You and I know who will be the ultimate payers of these debts
9.19.2008 3:05pm
Visitor Again:
Underlying the financial crisis is bad mortgages.

My pedantry having been stirred, would you say or write, "Bad mortgages is underlying the financial crisis?" No, you wouldn't. So, here: Underlying the financial crisis are bad mortgages.
9.19.2008 3:13pm
CB55 (mail):
So basically because the Bush and Clinton Administration and FED and SEC enabled banks/investment/insurance houses to be stupid at a time of cheap money, and allowed new "products" to run rampant without any adult supervision from regulators or the Fed, the American taxpayers now must pony up for it, and allow the banks to get off the hook.

But allowing government to intervene and substitute public policy choices for market-driven ones in health care and energy is bad? It appears that those who preach the gospel of free markets, free trade, less government and free enterprise do so only during good times, but during bad times they want the healing powers of tax payer money with socialism.
9.19.2008 3:22pm
CB55 (mail):
Right now the Subprime Loan business is the defacto fall guy but the governing and business elites know that this crisis is much bigger and the cause is deeper than subprime loans.
9.19.2008 3:41pm
Spitzer:
Gosh, never expected this thread to get so nasty. Frankly, the modest proposal sounds eminently reasonable to me - if the government is going to end up holding a bagful of bad loans, why not just convert the property to parkland/wetland in flood-prone areas instead of (a) selling the property at foreclosure prices while (b) continuing to subsidize the flood insurance for flood-prone properties? Looks like an opportunity to take flood liabilities off of the federal government's books, once and for all. If some towns end up smaller, well, so be it - change happens, and don't we all support wetland conservation nowadays?
9.19.2008 3:47pm
Dissenter:
This is one of the worst and least practical ideas I've ever come across.
9.19.2008 3:47pm
Dissenter:
I would add that, although it's called a "Modest Proposal" I actually believe Prof. Bernstein thinks it's a clever idea.
9.19.2008 3:48pm
subpatre (mail):
A.C. said "If anyone can figure out how to get employers back into rust belt cities, I'm sure the employees would happily by houses there."

Vote out your local government and repeal the rackets of non-essential regulation. Lather, rinse and repeat at the state level.


'Dissenter' - Predictably, you wrote one of the worst and least practical ideas comments I've ever come across. That's because it was unreasoned invective, as warned against in the comment policy below.
9.19.2008 4:24pm
Tony Tutins (mail):

pay people to abandon their flood-prone communities. The condition would be that they have to buy a new house in [South Florida]

db forgot the South Florida devastation caused in 1992 by Hurricane Andrew, which was the "Costliest U.S. Hurricane 1900-2004 (unadjusted)" according to NOAA, at $26.5 billion (or roughly 1/3 AIG bailout).

Note that the SE Texas floodplain reaches as far inland as Houston, which may still be recovering from the storm.
9.19.2008 4:24pm
Ben P (mail):

I would add that, although it's called a "Modest Proposal" I actually believe Prof. Bernstein thinks it's a clever idea.


Please at least read the comments first.

I think, in fact, I'm almost certain, that Professor Bernstein thinks this is a clever satire, not a clever idea, except in that the latter may also be the former.

Then again, the Internet is a transmission method notorious for letting sarcasm and satire slip away from the unaware.
9.19.2008 4:24pm
Soronel Haetir (mail):
Leaving everything else aside, what absolutely burns me is the way people skip even bothering with flood insurance at all and then still expect los federales to swoop in and save them.
9.19.2008 4:55pm
TomH (mail):
Dissnter - The reationale for your dissent is, I presume, unspeakable. (or more likely so obvious that I may be considered beneath contempt for even asking what it might be)
9.19.2008 4:57pm
Steve2:

I don't really care about Oil Exploration, but there is a larger point here in that People Tend to live in wetland/floodplain areas because they tend to be useful.

People live in Midwest floodplains because they're very agriculturally rich. New Orleans is a port city on a river delta, there's not really a place to build in the general area that wont' be flooded every so often.

Yes, I suppose government mandated flood insurance is "encouraging" development in those areas, but the causation primarily flows the other way. People built in those areas because of their intrinsic usefulness, and the floods occured, so the government adopted a policy to attempt to retain the usefulness of those areas while socializing the dangers.


That doesn't explain why people who aren't involved in the exploitation of that usefulness or the immediate provision of services to them have any business living or building there. The Midwest floodplains are prime agricultural land and have a relatively high probability of flooding. Ergo, the Midwest floodplains should be solely agricultural land, with no more than the minimum number of non-farm enterprises and people to provide the bare necessities of life to the farml population and land.
9.19.2008 5:24pm
Bruce Hayden (mail) (www):
That doesn't explain why people who aren't involved in the exploitation of that usefulness or the immediate provision of services to them have any business living or building there. The Midwest floodplains are prime agricultural land and have a relatively high probability of flooding. Ergo, the Midwest floodplains should be solely agricultural land, with no more than the minimum number of non-farm enterprises and people to provide the bare necessities of life to the farml population and land.
Ditto for NOLA. There is no reason that the U.S. taxpayers should have to subsidize people living in that floodplain. Rather, what is important there are the ports, etc. It would apparently be far cheaper to just build high quality high speed mass transit to the ports, etc. than it would be to maintain all those levies and rebuild whenever they are breached. Then, JF could have his wetlands as nature takes its course.
9.19.2008 5:38pm
Toby:
NOLA has been an economic sinkhole since container shipping eliminated the longshoreman jobs that used to do transhipment of cargo case by case....Not only did this eliminate 100s of thousands of jobs directly, but it eliminated the jobs of the community that supported them. One might mention that it also eliminated the large number of things that "fell of the boat", a not insignificant portion of the bon temps that rolled down to the big easy.

NO has never fully adjusted to it new economic size. THat a lot of high paying unskilled labor jobs that will never come back. Ever. 1980's estimates by the US Department of Labor as to the new size of NO supported by its actual economic events indicated a size very similar to <drum roll> the population of NO one year after Katrina.

Strangely, this suggests that Bernsteins proposal would be just about right...
9.19.2008 5:51pm
SG:
If anyone can figure out how to get employers back into rust belt cities, I'm sure the employees would happily by houses there. That's the main problem in those places.

This is easy. Lower state taxes and pas right to work laws. That's why those jobs left in the first place.
9.19.2008 9:56pm
Toby:
Replace "Ever. 1980's estimates by" with "Even 1980's estimates by"
9.20.2008 12:19pm
David Warner:
Sounds like a plan. After that's done, we can move the state of Israel to some federally owned land in Nevada.
9.20.2008 5:15pm