[ExI] Avoiding bad black swan events/was Re: extropy-chat Digest, Vol 111, Issue 15
rafal.smigrodzki at gmail.com
Fri Dec 21 11:39:11 UTC 2012
On Fri, Dec 14, 2012 at 12:56 PM, Adrian Tymes <atymes at gmail.com> wrote:
> On Fri, Dec 14, 2012 at 2:05 AM, Rafal Smigrodzki
> <rafal.smigrodzki at gmail.com> wrote:
>> Those who think the US government will
>> help them in a Black Swan, rather than being the main cause and focus
>> of the event, are fooling themselves.
> That is overstating things, I think. Look at, for instance,
> Hurricane Sandy. The US government was not the main
> cause of the event, and it demonstrably helped many of
> those harmed by the unusual weather.
### The government collected monies from various productive workers
and (slowly and haphazardly) disbursed them to some affected by the
storm. This does not mean that it helped us in general, in fact, the
opposite is true:
First of all, the expectation of government bailout funded by
involuntary contributions from workers leads to moral hazard, whether
in home-building or in banking. Most of the severely affected
homeowners chose to build homes in areas known to be afflicted by high
tides - and probably they would not have done it if they had to pay
competitive insurance premiums (reflecting the actual danger) or if
they knew they were on their own. Thus, the government encouraged
excessive private risk taking, letting some people enjoy the upside of
sunny beach living, while socializing the downside, forcing the rest
of us to pay up when the inevitable catastrophe came, just as in the
2008 banking crisis.
Furthermore, the "help" provided by FEMA was laughable, considering
the amount of money available to them. It took them weeks to even
begin cleaning things up, with FEMA employees actually huddled in
their trailers rather than doing something useful (they didn't even
have drinking water supplies).
In other words, while the government did not cause the hurricane, it
did encourage most of the exposure to harm and its attempts at
providing help were woefully inefficient.
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