The Role Of Government In Rebuilding After Disasters

by |August 22, 2016

People are losing their homes to floods in Louisiana and the Midwest and forest fires in California. It is not just heartbreaking to see people have their homes and life savings destroyed in an instant; it is a problem that calls out for a government response. I have written many times about the need for dedicated federal funds for the reconstruction of homes and communities destroyed by nature or terror. This will require a dedicated revenue stream, or what we used to call a tax, to generate these funds. The facts are that our population is growing, we live in places we never lived before, and we depend on energy, transport, water and waste infrastructure to live a modern lifestyle. We are more vulnerable to the impact of a storm than we were before our homes became hosts to the technology of comfort. Everyone watches the disasters on TV, feels bad, figures it can’t happen here, and use their remotes to switch to the Olympics. But many can’t flip the channel; they are living with the disaster and are desperately trying to find a new \home for their family.

The fundamental job of government is to provide security and safety for its people. Natural disasters may be predictable to some degree, but they are unavoidable. What is avoidable is the sense of economic hopelessness that follows these events. The community can’t replace the memories and mementos of the past, but it can rebuild homes, schools, libraries, roads and other institutions. It’s too bad that government can’t support religious institutions because they are so valuable in the aftermath of loss, but the constitution really does forbid it.

In last week’s New York Times, Campbell Robertson and Alan Blinde reported that:

“In Louisiana, severe weather can often seem a trauma visited and revisited. But the disaster unfolding here this week fits into a recent and staggering pattern in more than half-dozen states, where floods have rolled out at such a scale that scientists say they might be a once-every-500-or-1,000-year occurrence. The cumulative, increasingly grim toll, from Maryland to South Carolina to Louisiana to Texas, includes scores of lives and billions of dollars in economic losses.”

What were once rare occurrences have become commonplace. You could argue that we should build out communities in places less prone to flooding, but there are no such places. Even deserts occasionally get hit with sudden downpours. In addition to the flooding, we see growing impact from forest fires. California’s Blue Cut fire has caused 80,000 people to evacuate their homes. According to Nick Strayer of the New York Times:

“The size of wildfires has grown steadily for more than 30 years. In 1982, the average fire covered less than 25 acres. Today, the average wildfire burns about 100 acres…The federal government spent $202.8 million to fight fires in 1986. Last year, it spent $2.1 billion. One cause of the longer seasons is environmental: The warming climate has melted snowpacks earlier, increasing the length of time that forests dry out and become vulnerable to burning.”

There is no question that with 39 million or so people living in California, many are living in places that were unpopulated a generation ago, and so a fire might have burned in some remote location 50 years ago but would had little impact on human communities. That increases the probability that people might be in the pathway of destruction, but frankly, that’s the point. More and more extreme weather events are taking place, and we are more likely to suffer damage form those events.

It’s time for a policy response that provides reconstruction insurance, so that along with a federal disaster declaration, funds become immediately available to rebuild homes, facilities and infrastructure. There are a lot of ways to generate revenue for such a trust fund. There are even more ways to create a lock-box system that ensure the money can’t be diverted or influenced by political considerations. I would tax gasoline to fund this. Our federal gasoline tax is quite low when compared to other parts of the world, and a disaster surcharge could be set annually based on the needs of the previous year. We get lucky, the tax goes down; we get hit a lot, the tax goes up. But with a dedicated trust fund in place, when a twister carries your home to the Land of Oz, the state of Kansas shows up the next day with a check for you to rebuild your home. They also provide another check for temporary housing. If you’re a landlord with renters, the same deal applies.

The disaster will be just as miserable, but the aftermath can be made predictable and less wrenching by a national insurance system that cleanly and efficiently funds reconstruction. Here in the northeast, we continue to live through the horrific follow-up of Superstorm Sandy. First, our congressional delegation had to beg their colleagues for funding. Then began a long and complex process to determine who was eligible for aid and to ensure there was no fraud in the process. Years later, people have still not returned to their homes.

Observing this failure of government response after Sandy and seeing the representatives in the Midwest and South resisting funding reconstruction, I warned that they would be next. And now they are. The ideology of a do-nothing government is an obstacle to taking the action needed. There are plenty of reasons to be cautious when designing a big new federal program—I get that. But how many more miserable people will we need to see before we act? How many lives and family savings are we willing to sacrifice before we design an approach to fund reconstruction?

The American dream of hard work and reward is under siege. That is part of what is fueling the political insurgencies of this presidential year. Reconstruction funding is an appropriate role for government because pricing disaster insurance is nearly impossible and no private firm will take this risk. But our community is stuck with somehow paying for the cost of reconstruction.

The news media covers the drama of first response to disasters, and our capacity to predict and respond to disasters has improved over the past several decades. But once the cameras depart and the media trucks have driven away, the devastated communities are left on their own. As the number, severity, and impact of these storms grow, the ad hoc response to them will become increasingly unacceptable. I can’t say that I expect any of our elected officials or presidential candidates to advocate for a reconstruction trust fund, but some form of creative response by government is desperately needed.


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