My neighbors here in Cambridge, Massachusetts, which was only barely touched by Hurricane Sandy, are taking the post-storm cleanup as an occasion to celebrate how prescient they were in supporting ever-bigger government. “Imagine where we would have been without FEMA” is the refrain. “Look how helpful President Obama has been”. “This shows the value of insurance,” they add.
I’m a little confused as to why folks think that this could not have been handled without the federal government or why a state with millions of people would need insurance. To hear them talk, if not for President Obama and the gifts that he has bestowed upon us, we would not have electric power, roads clear of fallen trees, etc. Yet U.S. state and local governments have tax revenues, in the aggregate, roughly comparable to those of the federal government. And the populations and GDPs of U.S. states are similar to those of many standalone countries around the world. http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP shows that New York State, for example, has 19.4 million residents and a GDP of nearly $1.2 trillion (was $1.156 in 2010). New Jersey has a GDP of $0.5 trillion. The total damage from Sandy, in all U.S. states, is estimated at approximately $20 billion. If all of that cost were borne by the 28 million folks who live in New York and New Jersey (nearly the population of Canada), it would amount to 1 percent of their annual income. That would be equivalent to a $500 loss for a person earning $50,000 per year, i.e., more comparable to an insurance deductible than the face value of an insurance policy.
It would certainly seem to make sense for governors to use their national guard resources and to call on nearby active duty military personnel (if they are not all in Afghanistan!), but beyond that I am at a loss to understand why the federal government has unique powers to clean up after a storm such as Sandy. How does it save money to send dollars down to Washington, D.C. and then have a portion of them sent back when there is a storm? Isn’t New York State’s population of 19+ million already a big enough group for spreading risk? If a group of 19 million isn’t a big enough pool, does that means that 80 percent of the world’s countries (table) are too small to handle the risk of being alive? Should those countries tax themselves an additional 20 percent and send the money to Washington, D.C. so that they too can fall under the FEMA umbrella?
If this trend toward calling in FEMA continues… how many years before the U.S. President and FEMA start coming over to shovel out our driveways after every snowstorm?
[Separately, I would like to express my gratitude to all of the folks who kept things humming in Cambridge and Lincoln, Massachusetts during the storm. That especially includes Nstar, my electric utility, which brought crews in from the Midwest in preparation for the storm. Also to the police and fire department in Lincoln, Massachusetts, where every road, powerline, and house is under constant assault from trees.]
[Finally.. you might ask what it was like here in Massachusetts. Private businesses stayed open, in many cases for their standard hours. You could get your dog groomed at Petsmart during the height of the storm and then pick up a free range carrot at Whole Foods. Logan Airport was open the whole time, with jumbo jets from Asia landing on Monday morning. Desk-job government workers and public school teachers enjoyed either one or two days off. A lot of suburban roads were closed on the day after the storm so that trees could be cut up and chipped.]