North Carolina attracts some attention in Marvin Olasky’s new examination of the built-in flaws in federal disaster programs.
North Carolina resident Betty Minchew, whose oceanfront rental house blew away during Hurricane Hugo in 1989, … made use of cheap federal flood insurance — first using government money to rebuild her house and then building two other beachfront rental houses in the same hazardous area. She said, “Hugo was good to me…. We had a lot of little shacks out here. Hugo got rid of those, and people built nicer, prettier places.” When hurricanes are good to people economically, something is awry.
Later, Olasky generalizes the theme:
Just as welfare for the poor brought about multigenerational dependency on government, so welfare for the rich has also birthed a moral hazard: act irresponsibly and the government will still provide a stipend.
