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Complete Forecast for  Sep 08 2008

TOP JOBS

Americans are deeply compassionate people, and we were moved by the images of massive flooding in the Midwest in June. And now, predictably, additional governmental spending is being suggested.

But the Competitive Enterprise Institute’s Eli Lehrer says that’s the wrong response.

“Already, the news of the flooding has disappeared from most newspaper front pages,” Lehrer says. “And, indeed, the worst is probably over: hydrologists believe that the Mississippi River crested on June 22 and 23 and probably will not flood again in 2008.”

We were lucky, he says.

“An extra foot or so of water would have inundated towns, caused billions in damage, and killed many more,” Lehrer says. “Despite billions in subsidies for breakwaters, flood barriers, relief, and flood insurance, there’s little hope of solving America’s flooding problem anytime soon. Unless the nation wants to go on risking massive loss of life from flooding every decade, we need a fundamentally different policy based on one simple principle: the government should not subsidize any new development in areas likely to flood.”

There are clear reasons for a change in policy.

“To begin with, using tax dollars to build new breakwaters — a practice many conservatives show a strange attraction for — is almost always a bad idea,” Lehrer says. “Environmentalists are mostly right when they say that wetlands do a better job controlling floods than government-built rock-piles. And longstanding Army Corps of Engineers policies — beginning with 1936’s National Flood Control Act — have encouraged plenty of development in places that probably should have been left wild.”

But he points to the National Flood Insurance Program as the real culprit.

“Although changes that both houses of Congress have passed will correct its most obvious absurdities — insuring second homes against flood and rebuilding properties dozens of times — NFIP remains deeply troubled,” Lehrer says. “Each year, it requires massive subsidies.”

Those subsidies hide the serious flaws in the program.

For example, “the fundamental standard that the program sets — homes can be built on areas likely to flood every 100 years but not more often than that — encourages development,” Lehrer says. “A home on a 100-year flood plain has more than a one in four chance of flooding during a typical 30-year mortgage. This is simply too often.”

Adding wind damage to the flood program, as such in the House of Representatives favor, would make matters worse, he adds.

“Although there’s no way to terminate flood insurance tomorrow, Congress needs to spend the next few years looking over the program very carefully,” Lehrer says. “In the long run, the United States needs a strategy that will result in private, self-sustaining flood insurance.”

Individuals who wish to build in flood-prone areas should be relatively free to do so, he contends.

“But they shouldn’t expect a dime for subsidized insurance, roads, breakwaters, schools, or anything else that taxpayers will pay for rebuilding,” Lehrer says.