A Bit of Political & Economic Reality

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Stephen D. Poe" <sdpoe () acm org>
Date: September 5, 2005 12:58:14 AM EDT
To: Dave Farber <dave () farber net>
Subject: A Bit of Political & Economic Reality
Reply-To: sdpoe () acm org


Dave -

For IP, if you like.

Stephen
---

I think there are two salient points here:

1. You Can't Fund Everything
---
Regarding NOLA, levees & preparedness, it was decided 30-40 years ago  
(depending on which source you go by) to fortify NOLA for up to a  
Cat. III storm; this was believed to handle 99.5% of all potential  
hurricane threats NOLA would face (http://news.yahoo.com/s/latimests/ 
20050904/ts_latimes/ 
despitewarningswashingtonfailedtofundleveeprojects). Every few years  
since then the Corps of Engineers and/or New Orleans officials and/or  
Louisiana officials would ask the Feds for the money to ratchet this  
up; just as regularly, the House and/or the Senate would turn them  
down. From the 1 Sept. Chicago Tribune:

"WASHINGTON -- The U.S. Army Corps of Engineers said Thursday that a  
lack of funding for hurricane-protection projects around New Orleans  
did not contribute to the disastrous flooding that followed Hurricane  
Katrina.

In a telephone interview with reporters, corps officials said that  
although portions of the flood-protection levees remain incomplete,  
the levees near Lake Pontchartrain that gave way--inundating much of  
the city--were completed and in good condition before the hurricane.

However, they noted that the levees were designed for a Category 3  
hurricane and couldn't handle the ferocious winds and raging waters  
from Hurricane Katrina, which was a Category 4 storm when it hit the  
coastline. The decision to build levees for a Category 3 hurricane  
was made decades ago based on a cost-benefit analysis.

"I don't see that the level of funding was really a contributing  
factor in this case," said Lt. Gen. Carl Strock, chief of engineers  
for the corps. "Had this project been fully complete, it is my  
opinion that based on the intensity of this storm that the flooding  
of the business district and the French Quarter would have still  
taken place."

And from a US Corps of Engineers Press Release:
"Let me also address the issue of the general impact of the war in  
Iraq on civil works funding. We've seen some suggestions that our  
budget has been affected by the war. I can also say that I do not see  
that to be the case. If you look at the historical levels of funding  
for the Corps of Engineers from the pre-war levels back to 1992, '91,  
before we actually got into this, you'll see that the level of  
funding has been fairly stable throughout that period. So I think we  
would see that our funding levels would have dropped off if that were  
the case; so I do not see that as an issue that is relevant to the  
discussion of the flood protection of the City of New  
Orleans." (http://www.usace.army.mil/PA-09-01.pdf)


So, at first blush, you could blame every President and  
Congresscritter for the past 30 years, not just Bush Jr.

Given Katrina, it's easy to demonstrate how, in hindsight, the ROI  
would have been positive to spend the extra money.

The problem is the US is full of dozens if not hundreds of such  
"0.5%" events. Each one, if it happened, would be a monumental loss;  
each one, taken separately, has a favorable ROI if that event  
happened. For example, fortifying all of California to handle a  
Richter 9.0 earthquake. Or even a Richter 8.0. Fortifying the middle  
of the US to handle a Richter 8.0 if (when) the New Madrid fault lets  
loose again (http://quake.wr.usgs.gov/prepare/factsheets/NewMadrid/).  
Closer to (my) home, fortifying most of the Midwest to better  
withstand a Category 5 tornado. Fortifying the East Coast to  
withstand a tsunami of the magnitude of the last Indonesia tsunami  
(http://www.magazine.noaa.gov/stories/mag158.htm). And so on and so  
on and so on...

But the US can't afford to budget for each and every one of these  
events. As one pundit reported, politics is the sordid business of,  
however unfairly, setting priorities with limited funds in a world of  
unlimited projects.  We can't plan and build for every "once in every  
two centuries (99.5%) events" that might happen anywhere in the US.

2. Our Risks are Increasing
---
As the US population continues to grow, more and more people are  
moving into higher risk areas. Hurricane Andrew was a wake-up call as  
to exactly how many more people lived in Florida's "hurricane alley"  
in the 1990s than in previous years (and several insurance companies  
failed because of this lack of recognition). The great Midwest floods  
of 1993 showed how more heavily populated the midwest flood plains  
had become (http://www.ucowr.siu.edu/updates/130/14%20changnon.pdf).  
The fires in California show more and more people are building in  
previously uninhabited areas. As a country, we are increasing our  
exposure and our financial and human casualty liability on a day-to- 
day basis.

From an FDIC study:
"The disasters of hurricane Andrew and the Northridge earthquake  
alone cost the insurance industry more than the cumulative insured  
losses from catastrophes in the decade before those events. Losses  
from the two disasters totaled over $45 billion in 1997 dollars, with  
insured losses running about $30 billion. These insured losses  
compare with cumulative insured losses from natural catastrophes in  
the previous decade of only about $25 billion. <http://www.fdic.gov/ 
bank/analytical/banking/2003apr/footnotes1.html#1> Yet, although the  
Atlantic and Gulf coastal regions of Florida are exposed to  
hurricanes and much of California is vulnerable to earthquakes, the  
population in these states has grown at two or three times the  
national average for the last three decades. Given this population  
growth, scenarios constructed by catastrophe modelers now suggest the  
possibility of a $76 billion hurricane in Florida, a $72 billion  
earthquake in California, and even a $21 billion hurricane in the  
Northeast. " - http://www.fdic.gov/bank/analytical/banking/2003apr/ 
article1.html
And as Stratfor points out in their 1 September report "New Orleans:  
A Geopolitical Prize":
"The United States historically has depended on the Mississippi and  
its tributaries for transport...  There must be a facility to empower  
this exchange... Without this port, the river can't be used...

Katrina has taken out the port -- not by destroying the facilities,  
but by rendering the area uninhabited and potentially uninhabitable.  
That means that even if the Mississippi remains navigable, the  
absence of a port near the mouth of the river makes the Mississippi  
enormously less useful than it was...

It follows from this that the port will have to be revived and, one  
would assume, the city as well... New Orleans is where it is for a  
reason: The United States needs a city right there.

New Orleans is not optional for the United States' commercial  
infrastructure. It is a terrible place for a city to be located, but  
exactly the place where a city must exist. With that as a given, a  
city will return there because the alternatives are too devastating.  
The harvest is coming, and that means that the port will have to be  
opened soon. As in Iraq, premiums will be paid to people prepared to  
endure the hardships of working in New Orleans. But in the end, the  
city will return because it has to.

Geopolitics is the stuff of permanent geographical realities and the  
way they interact with political life. Geopolitics created New  
Orleans. Geopolitics caused American presidents to obsess over its  
safety. And geopolitics will force the city's resurrection, even if  
it is in the worst imaginable place."



So, perhaps, instead of blamestorming as to why this particular  
project, in hindsight, was not funded, don't we move on to something  
more useful - tactically, helping the survivors pick up the pieces  
and move on; and strategically, planning how to help the US weather  
the occasional "once every two centuries"  event even as the number  
and scope of such events increases with our increasing population.

These would be far better exercises, IMHO, than more red-vs-blue free- 
for-alls.






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