One of the themes of the new agenda on this blog is misallocation and malinvestment, as to how live with both.
One way housing developers socialize costs while keeping the profits is the Feds require people buy flood insurance. Well, once we have flood insurance, then developers can build on flood plains at prices below market costs, and when the plains flood, a disaster is declared, and the taxpayers have to pick up the tab. Same with building in fire zones, etc.
How about we stop doing that? How about if someone wants to build on a flood plain, they get real insurance from a real provider, who will in turn require the house withstand a flood before they will insure. For example, here is one such house... designed for the reality of the place, the floods.
Go ahead, let the waters get six feet high every 100 years... this house could take 100 years of six feet of water under it. It does not cost too much to design houses right, it only costs more. If developers can build for less, and keep the profits and socialize the losses, then this they will do. Why the rest of us agree to it is beyond me. Let markets work, and they will.
Feel free to forward this by email to three of your friends.
One way housing developers socialize costs while keeping the profits is the Feds require people buy flood insurance. Well, once we have flood insurance, then developers can build on flood plains at prices below market costs, and when the plains flood, a disaster is declared, and the taxpayers have to pick up the tab. Same with building in fire zones, etc.
How about we stop doing that? How about if someone wants to build on a flood plain, they get real insurance from a real provider, who will in turn require the house withstand a flood before they will insure. For example, here is one such house... designed for the reality of the place, the floods.
Go ahead, let the waters get six feet high every 100 years... this house could take 100 years of six feet of water under it. It does not cost too much to design houses right, it only costs more. If developers can build for less, and keep the profits and socialize the losses, then this they will do. Why the rest of us agree to it is beyond me. Let markets work, and they will.
Feel free to forward this by email to three of your friends.
3 comments:
Hi John
When can we expect your new book to be out.
Would love to read a book from you that is not necessarily about trade. Perhaps something on economics or politics.
What do think?
Regards,
James
I take it there is no book on the way then...
Actually, there is another book... I took six weeks off to compose it, now it is in editing, with the gift of ADD?ADHD I move things around... When? Soon, I hope...
But as to politics or economics... maybe someday....
John
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