Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [78]
18
The Peculiar Politics of American Disaster Policy
How Television Has Changed Federal Relief
DAVID MOSS
Particularly since the 1960s, the federal government has played a significant role in financing disaster losses in the United States.1 The federal government may thus be thought of as providing an implicit form of public disaster insurance. However, unlike many long-standing public insurance programs, which collect premiums to cover expected losses, federal disaster “insurance” collects no premiums other than for flood risk.2 And even here, in the case of the National Flood Insurance Program, premiums have traditionally been subsidized.
Why doesn’t the federal government administer its disaster expenditures in line with conventional insurance principles, instead of funding them mainly ex post out of general revenues (and borrowing) and typically on the basis of emergency supplemental appropriations? More concretely, why is public disaster relief financed differently from other forms of public insurance, such as unemployment insurance and deposit insurance?
Although there are many possible explanations for this puzzle, one that deserves particular attention relates to the peculiar politics of disaster policy at the federal level and the special role that the news media appear to play in driving policy outcomes. As is well known, media coverage surges upward in the immediate aftermath of a disaster, throwing a bright spotlight on the victims, and then quickly dissipates. As a result, although the accumulated costs of disaster relief are quite high, the politics are typically played out one disaster at a time, in line with the media coverage. This dynamic appears to focus public attention more on the immediate benefits of emergency disaster assistance than on the long-term costs. Unless and until the public discussion can be reframed to look across disasters, rather than focusing on one disaster at a time, insurance-based policy reform may remain exceedingly difficult to achieve.
A BRIEF HISTORY OF FEDERAL DISASTER RELIEF
Although Americans have always faced the scourge of natural disasters, attitudes about the proper role of government in addressing disaster losses have changed dramatically over time. The change has been particularly striking with regard to the federal government.
Congress provided assistance to the victims of a major fire in New Hampshire as early as 1803, and historians have counted 128 specific acts of Congress providing ad hoc relief for the victims of various disasters over the years 1803 to 1947. Nevertheless, disaster relief was not generally viewed as an ongoing federal responsibility in the United States until well into the twentieth century.3 In 1887, for example, President Grover Cleveland vetoed a bill that would have provided $10,000 in assistance to the victims of a drought in Texas. “I can find no warrant for such an appropriation in the Constitution,” Cleveland declared, “and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering. . . . [T]hough the people support the Government, the Government should not support the people. . . . Federal aid in [cases of misfortune] encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character.”4
Forty years later, in 1927, a massive flood on the Mississippi prompted a new level of engagement from the federal government—and especially from President Calvin Coolidge’s activist secretary of commerce, Herbert Hoover. Hoover took charge of the federal relief and rescue