As for flood insurance, the federal government is pretty much the only place to get it. The National Flood Insurance Program has written 5.5 million policies in more than 21,000 communities covering $1.2 trillion worth of property. As for the vaunted private market, for-profit insurance companies write between 180,000 and 200,000 policies in a given year. In other words, that is less than 5% of all flood insurance in the United States. This federally subsidized program underwrites the other 95%. Without such insurance, it's not complicated: many waterlogged victims of 2011, whether from record Midwestern floods or Hurricane Irene, would simply have no money to rebuild.
Or consider sweltering Texas. In 2011, firefighters responded to 23,519 fires. In all, 2,742 homes were destroyed by out-of-control wildfires. But government action saved 34,756 other homes. So you decide: Was this another case of wasteful government intervention in the marketplace, or an extremely efficient use of resources?
Facing Snowpocalypse Without Plows
The early years of this century have already offered a number of examples of how disastrous too little government can be in the face of natural disaster, Katrina-inundated New Orleans in 2005 being perhaps the quintessential case.
There are, however, other less noted examples that nonetheless helped concentrate the minds of government planners. For example, in the early spring of 2011, a massive blizzard hit New York City. Dubbed "Snowmageddon" and "Snowpocalypse," the storm arrived in the midst of tense statewide budget negotiations, and a nationwide assault on state workers (and their pensions).
In New York, Mayor Mike Bloomberg was pushing for cuts to the sanitation department budget. As the snow piled up, the people tasked with removing it -- sanitation workers -- failed to appear in sufficient numbers. As the city ground to a halt, New Yorkers were left to fend for themselves with nothing but shovels, their cars, doorways, stores, roads all hopelessly buried. Chaos ensued. Though nowhere near as destructive as Katrina, the storm became a case study in too little governance and the all-too-distinct limits of "self-reliance" when nature runs amuck. In the week that followed, even the rich were stranded amid the mounting heaps of snow and uncollected garbage.
Mayor Bloomberg emerged from the debacle chastened, even though he accused the union of staging a soft strike, a work-to-rule-style slowdown that held the snowbound city hostage. The union denied engaging in any such illegal actions. Whatever the case, the blizzard focused thinking locally on the nature of public workers. It suddenly made sanitation workers less invisible and forced a set of questions: Are public workers really "union fat cats" with "sinecures" gorging at the public trough? Or are they as essential to the basic functions of the city as white blood cells to the health of the human body? Clearly, in snowbound New York it was the latter. No sanitation workers and your city instantly turns chaotic and fills with garbage, leaving street after street lined with the stuff.
More broadly the question raised was: Can an individual, a town, a city, even a state really "go it alone" when the weather turns genuinely threatening? Briefly, all the union bashing and attacks on the public sector that had marked that year's state-level budget debates began to sound unhinged.
In the Big Apple at least, when Irene came calling that August, Mayor Bloomberg was ready. He wasn't dissing or scolding unions. He wasn't whining about the cost of running a government. He embraced planning, the public sector, public workers, and coordinated collective action. His administration took unprecedented steps like shutting down the subway and moving its trains to higher ground. Good thing they did. Several low-lying subway yards flooded. Had trains been parked there, many millions in public capital might have been lost or damaged.
The Secret History of Free Enterprise in America
When thinking about the forces of nature and the nature of infrastructure, a slightly longer view of history is instructive. And here's where to start: in the U.S., despite its official pro-market myths, government has always been the main force behind the development of a national infrastructure, and so of the country's overall economic prosperity.
One can trace the origins of state participation in the economy back to at least the founding of the republic: from Alexander Hamilton's First Bank of the United States, which refloated the entire post-revolutionary economy when it bought otherwise worthless colonial debts at face value; to Henry Clay's half-realized program of public investment and planning called the American System; to the New York State-funded Erie Canal, which made the future Big Apple the economic focus of the eastern seaboard; to the railroads, built on government land grants, that took the economy west and tied the nation together; to New Deal programs that helped pulled the country out of the Great Depression and built much of the infrastructure we still use like the Hoover Dam, scores of major bridges, hospitals, schools, and so on; to the government-funded and sponsored interstate highway system launched in the late 1950s; to the similarly funded space race, and beyond. It's simple enough: big government investments (and thus big government) has been central to the remarkable economic dynamism of the country.
Government has created roads, highways, railways, ports, the postal system, inland waterways, universities, and telecommunications systems. Government-funded R&D, as well as the buying patterns of government agencies -- (alas!) both often connected to war and war-making plans -- have driven innovation in everything from textiles and shipbuilding to telecoms, medicine, and high-tech breakthroughs of all sorts. Individuals invent technology, but in the United States it is almost always public money that brings the technology to scale, be it in aeronautics, medicine, computers, or agriculture.
Without constant government planning and subsidies, American capitalism simply could not have developed as it did, making ours the world's largest economy. Yes, the entrepreneurs we are taught to venerate have been key to all this, but dig a little deeper and you soon find that most of their oil was on public lands, their technology nurtured or invented thanks to government-sponsored R&D, or supported by excellent public infrastructure and the possibility of hiring well-educated workers produced by a heavily subsidized higher-education system. Just to cite one recent example, the now-familiar Siri voice-activated command system on the new iPhone is based on -- brace yourself -- government-developed technology.
And here's a curious thing: everybody more or less knows all this and yet it is almost never acknowledged. If one were to write the secret history of free enterprise in the United States, one would have to acknowledge that it has always been and remains at least a little bit socialist. However, it's not considered proper to discuss government planning in open, realistic, and mature terms, so we fail to talk about what government could -- or rather, must -- do to help us meet the future of climate change.
Storm Socialism
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