The Super Bowl in LA

by Jim Davies

There's something very peculiar about the disaster in New Orleans . News reports are full, of course, of vast numbers of homeless and hundreds of dead, and particularly of heroic action by rescue people, usually government employees. I mean no disrespect to any of those; on the contrary, I want only to point to the cause, so they need never be burdened thus again.

The odd thing is that somebody built a riverside city below sea level. That's really unusual, and I must confess that I did not know, before this week, that the Big Easy was a case in point. Now that that Bowl has been filled, the task of emptying it again and drying everything out may make the city's nickname the Big Hard.

That's not to say that cities should always be built above sea level, though that's what the French did when they settled the area. Seems good sense; note where the highest tide and river levels come to, note where the biggest storm surges have reached, and build only above that line.

But at some point in the history of New Orleans , LA , someone took the decision to drain a low-lying swamp, build levees around it to keep the water out, and make good use of previously wasted land. According to two Wall Street Journal reporters, that got into high gear around 1890, when a government body called "Orleans Levee District" was created; and that gives us the clue to this disaster--and to all previous, lesser floodings. Government often enters the picture when somebody wants something that is financially unsound--he gets someone else to pay for it, using the political process.

If the cost figures worked out well, I can buy the idea of building under the surrounding water level. When "buying" it, though, or rather when buying a property in the new land, I'd want (assuming a rational society) to make sure the levees were built high enough and strong enough. I dare say any property owner would want to make very sure about that; wouldn't you? And if one of us loved the low-price, low-lying lot so much that he forgot to ask that question, we can be rather sure that his homeowner insurance company would ask it--and would press the question very hard. Because if the right answers to those two questions are not obtained, the next time one of the frequent regional hurricanes happens to come ashore in New Orleans , someone is going to suffer a financial wipeout.

That's one nice thing about freedom; there's ample opportunity for profit, but it all comes with responsibility. The possibility of failure is real. That's why those levees would be built very high and very strong, for if they weren't, the buildings wouldn't get built because nobody would buy property they could not insure. Not in a free market, they wouldn't.

The same is true about the decades following construction. I'm no levee engineer, but suppose that like every other manmade structure, they need maintenance. In fact, since a single failure could be (and this week has been) catastrophic, they must need excellent and perhaps expensive maintenance. If I were an insurer underwriting buildings in that Bowl, I'd want to keep a close, constant watch on the quality of work being done to keep them 100.0% leak-proof. Wouldn't you? My reason would be that my financial survival would depend on it; and that's one of the strongest motivations known to man.

But something went terribly wrong, and it didn't start with the arrival of Katrina. The day before she swept ashore, the government "ordered" residents to evacuate (what arrogance!) because it appeared that this unusual storm might bring water surges over the tops of the levees. That order was a well-disguised confession that the levees had been built too low; that there was not enough safety margin in their height. If a private developer had done the job, the government would have heaped blame on him for that, possibly later arresting him for multiple manslaughter. But there was no such accusation; and that was because the levees had been designed, built, maintained and financed by the government itself.

Worse: a single day before the disaster, no government spokesman admitted that perhaps the levees were not strong enough, that they might be breached rather than over-run. From this we know that the government is incompetent as well as negligent and deceptive; for that's exactly what did take place. The water came terribly close to their top, so certainly there was too little margin--but the problem was that they gave way. They had been inadequately built, or at least inadequately maintained.

In a free society, in which all participants take their own financial risks under clear and explicit contracts, I propose that that could not happen. The watchfulness mentioned above, by parties with their own interests at stake, would prevent it. Once an insurer fingered the levee owner for inadequate maintenance, that owner would shape up or go broke--and someone would rapidly take over his business and fix the problem. But this is not a free society. It is a society infested by government, bemused by the fiction that money grows on a government tree, that "someone else" will be responsible. If a disaster happens, well, Uncle Sam will step in and mop up and will force taxpayers everywhere to foot the enormous bill. Uncle is not an insurance company, he is a massive thief! Insurers get revenue only from patrons who think the company wisely run. Uncle gets it the old fashioned way; he prints it. Result: nobody really cares, in the literal way of taking urgent action in good time and for good reason. So humans die, and huge numbers of others suffer massive disruption of their lives; and the reason is that the existence of government has prevented the operation of a free market.  

Some are already asking whether Louisiana 's Super Bowl will be rebuilt. I suppose it may, for the American Collective has strayed so far from the standard of a free market that it's most unlikely that a rational cost-benefit analysis will be done, by anyone with his own money at stake. The blame for it all belongs to the tens of millions of voters who have swallowed the obvious lie that government can work magic when the discipline of the market finds that a project is fundamentally unsound. And most of all, to the entire political class that encourages them in that patently absurd belief.