In his Wall Street Journal ($) Business World column today, Holman Jenkins picks up on a theme of several previous posts (here, here, here and here) that point out that governmental policies that distort risk analysis virtually guarantees that natural disasters in hurricane-prone areas will be increasingly costly:

Louisiana’s Sen. Mary Landrieu offered a perfect expression on CNN on Sunday of where the new blank-check compassion is leading us: “Wolf, poor families were crushed. Middle-income families are staggering. And wealthy families have been just punched in the stomach. It is going to take a huge national effort for us to realize the importance of this Gulf Coast region.”
To wit, everyone must be restored to their previous status and possessions, or better, at taxpayer expense.

Nobody criticized the handouts to New York after 9/11, which ratcheted up expectations of unlimited federal payouts when bad things happen on a large scale. Victim families got seven-figure checks because their loved ones died in a televised tragedy, though similar bounties aren’t bestowed on families that lose loved ones in less visible tragedies.
This precedent has returned to haunt us on a giant scale in New Orleans and its hinterland. Why are such selective windfalls to the unfortunate necessary? The federal government already guarantees us retirement income and health care in old age; it provides insurance and health care for the poor. These commitments in excess of $70 trillion, if properly recognized, would have long ago brought the country up before a bankruptcy judge.
It would be insane, under the circumstances, to extend this safety net to subsidize entire regions that wish to build without making proper allowance for predictable geological and meteorological hazards. This is insurance not for life and health, but for “lifestyle,” with the biggest benefits flowing to the least needy.
Sen. Landrieu and her Louisiana colleague, Republican Sen. David Vitter, have drawn up a bill for $40 billion in Corps of Engineers projects to encourage southern Louisiana to imagine itself immune to the weather. With near certainty, such a boondoggle would be the best way to guarantee an even more expensive disaster in the future.