A front-page story in today’s [March 14, 2006] New York Times, datelined Biloxi, Miss., reports,
The devastation of the coast here remains shocking to the uninitiated eye; towns where people have clearly worked night and day just to remove debris look as though they were hit by a hurricane six days ago, rather than six months.
However, just two paragraphs later we are told,
Biloxi is still a tangle of crumbling buildings, bent signs and silent streets. But all that changes in the parking lots of the three casinos that have opened on land, where drivers are lucky to find a space. Crowds appear within the casinos from seemingly nowhere, as if planted in place, with people holding cocktails and clutching room keys that double as casino entry cards in the cavernous, smoke-fogged halls.
Before hurricane Katrina, there were no casinos on land in Mississippi. They had all been on riverboats. The legislation authorizing them on land was enacted only after Katrina.
So how does it happen that brand new casinos spring up in months, while during the same period the rest of the region devastated by the hurricane simply continues to be devastated, showing hardly any signs of recovery?
Here’s a hypothesis to explain the disparity: The casinos are privately owned, profit-seeking business firms of a kind ineligible to receive government financial assistance. Thus, as soon it became legal to pursue an opportunity to make a good profit by opening casinos, their owners proceed to do just that, as quickly and as efficiently as possible.
In contrast, the rest of Biloxi and the Mississippi coast, and apparently most of New Orleans as well, are on hold, waiting for government money and busy doing whatever it may be that the government requires as a condition for receiving its money. Possibly, they are busy simply trying to learn what the government requires them to do as a condition for receiving its money. Possibly, the government itself is busy trying to figure out what it wants them to do as a condition for receiving its money.
If this line of explanation is correct, and I am confident that it is, then it follows that if one wants rapid recovery from large-scale disasters, the government should offer no financial assistance and offer absolutely no prospect of financial assistance.
Is there anything else the government might do, or not do, to speed recovery in such cases? Yes. It should suspend all requirements for obtaining permits of any kind relating to building and construction and the opening of new businesses, including, above all, requirements for environmental impact statements and their approval.
Further, the government should not wait for new disasters to strike. Legislation suspending permitting requirements during the aftermath of disasters should be enacted well before the next one occurs. That would permit banks and insurance companies to develop their own criteria for making loans and writing insurance policies in the absence of governmental requirements.
Given these changes, natural disasters would be followed by the most rapid possible recoveries. The freedom to respond to them would go a very long way in diminishing their character as disasters.
This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site www.capitalism.net is included. (Email notification is requested.) All other rights reserved.
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Great blog-post, Prof. Reisman! A detailed elaboration on this blog would probably make a great article
I concur, and would look forward to a more wide-ranging article. Am left wondering though, would the lobbyists who succeeded in geting the casinos to operate on land, be willing to lobby for the measures recommended by Prof. Reisman ‘for the greater good’? And is the Prof. expecting too much proactivity from Federal/State/local authorities?
I liked Prof. Reisman’s post very much. What role does time preference play in such matters? Doug French recently posted an article on lewrockwell.com, wherein he argued that Las Vegas is a high time-preference person’s (HTPP) mecca, and as such will weather the next recession very well, thank you. Could it be that all the folks hanging out at casinos find the momentary pleasure of craps and cocktails more rewarding than the deeper, and therefore harder to come by, pleasure of reconstruction? If the same storm had struck, say, a Hoppean paradise of low time preference folks living in a voluntary community under the protection of a benevolent monarch, would the streets be gleaming and the casinos a tad less busy?
Good point Happy-Lee, except where do get the impression that Hoppe is a monarchist? I think he makes it quite clear that a monarchy MAY BE better than a democracy, but anarchy is better than both. He does not have a low time preference fetish, but simply points out that the tendency prior to the 20th century has been in the direction of lower time preference, whereas the 20th century reversed this tendency.
Where do you get the impression that he’s a low time preference fetishist and monarchist?
George,
Your insight is almost clairvoyant. See this article about Amish rebuilding a neighbor’s house in a day after it was destroyed by a tornado: http://www.ozarksnow.com/apps/pbcs.dll/article?AID=/20060315/NEWS01/603150346
No welfare there, just private charity and hard work.
It is the oldest story in the world. Where there is stable private property there is order, where there is not there is a mess.
But I bet the New York Times would not print a letter of yours pointing out that this is what their own report shows.
Do not visit IP Casino in Biloxi. My car was recently damaged there and after filling reports and making several calls I was informed that the casino did not feel respinsible for the damage. I had proof that the car actually sat out in front of the casino for over 3 hours before it was brought into the garage. It also appears that someone put 17 miles on the car while I was in the casino. Thanks Biloxi!
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