"Capitalism is The One True Path that will tell us if and when we need to pay attention to issues or change our behavior! The Invisible Hand of the market is all-knowing!"
It is fun to see how much power the government can wield when it wants to. Insurance companies aren't juggernaughts like Exxon or Dupont or BlackRock, but I bet that until about 5-10 years ago they were very used to getting exactly what they wanted from the random PTA weirdos and landscape company inheritors who make up state legislatures.
It might not be used in a smart way, or to get anything the left wants, but it should be an object lesson to shove in the face of any centrist giving you the Better Things Aren't Possible treatment.
If we can limit insurance rates we can limit rents. And when Blackrock pulls out of states, liquidating millions of square feet of housing, crashing the market and taking every over-leveraged Property Brother and Sister who chased the dream of 'passive income' with them, oh well, good riddance to bad rubbish, looks like housing (owning or renting) can be had for a middle class income again.
Clearly yeah the govt's appetite for regulation is a political matter not something rooted in some abstract timeless economic principles. Rent control, like the stuff discussed above, has to be part of a complete package of housing reforms in order to really be effective (ie you have to address the housing shortage at the same time), but in that context it's not a bad idea.
In order to have a managed retreat, we need to legalize building new housing in the places where people could reasonably retreat to, without completely uprooting their lives and moving out of the entire metro area where the live.
So for instance, if people are going to retreat from the eroding cliffs of Pacifica, CA, we need a TON more housing in Daly City, San Francisco, and so on.
Option 3 is the same thing as retreat. You allow the subsidies for insurance in risky areas to gradually fade and let the market price out people to where the risk price is acceptable. This is managed retreat, with the option people retreat to where they want and can afford to.
We got in this bad situation in the first place because the government subsided development in risky areas with cheap insurance.
A big part of the problem are the poor. They typically live in rentals that are in the most disaster-prone areas (flood plains). They are also dependent on their local community as a safety net, and so to be moved should be moved as a group, maintaining their community ties. I know that some governments and NGO's have recognized this and are starting to chip away at the problem, but as you note, it will only get worse. And note that capitalism will not help these folks in the least.
"Capitalism is The One True Path that will tell us if and when we need to pay attention to issues or change our behavior! The Invisible Hand of the market is all-knowing!"
. . .
"Wait, no, not like that!"
It is fun to see how much power the government can wield when it wants to. Insurance companies aren't juggernaughts like Exxon or Dupont or BlackRock, but I bet that until about 5-10 years ago they were very used to getting exactly what they wanted from the random PTA weirdos and landscape company inheritors who make up state legislatures.
It might not be used in a smart way, or to get anything the left wants, but it should be an object lesson to shove in the face of any centrist giving you the Better Things Aren't Possible treatment.
If we can limit insurance rates we can limit rents. And when Blackrock pulls out of states, liquidating millions of square feet of housing, crashing the market and taking every over-leveraged Property Brother and Sister who chased the dream of 'passive income' with them, oh well, good riddance to bad rubbish, looks like housing (owning or renting) can be had for a middle class income again.
Clearly yeah the govt's appetite for regulation is a political matter not something rooted in some abstract timeless economic principles. Rent control, like the stuff discussed above, has to be part of a complete package of housing reforms in order to really be effective (ie you have to address the housing shortage at the same time), but in that context it's not a bad idea.
As usual, so agree.
Hi Hamilton, Excellent writing on the insurance/climate change link and human behavior. Better Minneapolis recommends your newsletter.
In order to have a managed retreat, we need to legalize building new housing in the places where people could reasonably retreat to, without completely uprooting their lives and moving out of the entire metro area where the live.
So for instance, if people are going to retreat from the eroding cliffs of Pacifica, CA, we need a TON more housing in Daly City, San Francisco, and so on.
Option 3 is the same thing as retreat. You allow the subsidies for insurance in risky areas to gradually fade and let the market price out people to where the risk price is acceptable. This is managed retreat, with the option people retreat to where they want and can afford to.
We got in this bad situation in the first place because the government subsided development in risky areas with cheap insurance.
I mean... leaving Florida IS the most sane option. I wouldn't recommend Michigan, per se, though, haha
A big part of the problem are the poor. They typically live in rentals that are in the most disaster-prone areas (flood plains). They are also dependent on their local community as a safety net, and so to be moved should be moved as a group, maintaining their community ties. I know that some governments and NGO's have recognized this and are starting to chip away at the problem, but as you note, it will only get worse. And note that capitalism will not help these folks in the least.