Blog

A
A
Home | Blog | FEMA, Moral Hazard, and Devolution

FEMA, Moral Hazard, and Devolution

November 2, 2012
The Harvard Business Review on The Problem with FEMA No One Is Talking About: moral hazard. (H/T Peter Klein)
"For a minute, imagine that there was no FEMA and each geographic location was on its own, forced to use private insurance and state-level funds to rebuild after disasters. Such constraints would likely encourage less risk taking before a disaster."
This argument for devolution is lost on Gary Johnson, who recently said:
“I think (disaster relief) may come under the basic notion of the government protecting us. There are these natural catastrophies that without the federal government, states aren’t as well equipped.”
Bizarrely enough, Mitt Romney, of all people, has evinced more understanding of the devolution argument than the Libertarian Party candidate for the United States Presidency.  When asked about abolishing FEMA, Romney said:
"Every time you have an occasion to take something from the federal government and send it back to the states, that's the right direction. And if you can go even further, and send it back to the private sector, that's even better."
Also see FEMA Should Be Shut Down by Christopher Westley.

Follow Mises Institute

Add Comment