With the Senate about to come back into session, it’s high time to think about reforms of the flood insurance program. The House has passed a good bill—certainly the best reform that the House has ever approved—and the Senate can make it better. If it wants to do this, there are four things that it could do: take out the new coverage categories that the House added, add Sen. Wicker’s COASTAL Act, further restrict the areas in which it sells flood insurance, and increase private participation.
First off, the Business Interruption and Additional Living Expenses coverage that the House added need to go. The program is already in deep trouble and doesn’t need to grow. Whatever promises about “adequacy” are made, there’s plenty of reason not to believe them: NFIP has never kept them in the past and new coverage, even for reasonably minor item, will inevitably make things worse.
Sen. Wicker’s COASTAL Act (which I’ve worked on and praised in the past), is a common sense solution to one of the biggest problems bedeviling the national flood program. Passing it would solve a real problem for consumers, put insurers in a better position to write coastal area coverage, and help move all rates towards actuarial adequacy. It’s a solid idea and deserves very strong consideration.
Third, the Senate should consider legislation that will further restrict the areas in which flood insurance is available. Already, the Coastal Barrier Resources Act makes flood insurance unavailable in barrier islands and on barrier beaches. If it’s serious about saving money and protecting the environment, Congress should go further and restrict the government’s ability to write flood insurance in all wetland areas that aren’t currently developed. “No net loss” is a poor substitute for actually preserving natural wetlands and ending flood insurance would, in many cases, end the development of wetlands.
Finally, the Senate should look for more ways it can increase private participation in the flood insurance program. Amongst other things, it might investigate a “takeout” program to allow private carriers (voluntarily) to underwrite any policy on which they can beat NFIP rates for identical coverage. Initially, such a program would probably attract only a very small number of participants, but its existence could serve as a useful barometer of overall interest in assuming private risk for flood insurance. Increasing the size of the private insurance market should be the long-term goal of the flood program as a whole.
The crop insurance program is even worse than the flood insurance program, a $6.5 billion waste of taxpayer money. While flood insurance, at minimum, meets a real demand that the market wasn’t meeting, the federal crop insurance program has displaced a private market for the benefit of industrialized agriculture and insurance agents. (I basically like both “factory farms” and insurance agents; but I don’t think either of them deserves special government handouts.) One of the main defenses in favor crop insurance is that it “saved” the American farm. And a quick glance at the statistics seems to offer some proof. The every-five-year agriculture censuses shows that there were 1.91 million American farms in 1997, compared to 2.2 million today, about the same number as there were before the “farm crisis” of the 1980s.
A look at the actual facts, however, reveals something else: the number of people who would classify themselves as farmers or derive more than a tiny portion of their income from growing food and fiber is in decline, as is the family farm.
First, the number of farms organized by a “family or individual” actually declined slightly between 2002 and 2007 (although it’s higher than it was in the late 1980s.)
More importantly, all of the net growth in the number of farms since the 1980s comes from enterprises with annual sales of less than $10,000. In fact, such enterprises represent now half of all American farms. While some of these may be Amish and other “plain” communities that are largely self-sufficient and may not have much cash income, it’s probably fair to assume that most of them are hobbies run by people who have other jobs. Since a full-time, 50-week minimum wage job, $14,500 a year, brings in more money than about half of all American farms, hardly anybody operating one of these farms can really be making a living off of it.
The main consequence of current agriculture policy as a whole—crop insurance included—seems to be to be encouraging “hobby” and large-scale farming. Crop insurance sure hasn’t saved the family farm.
The Martin Luther King Memorial, the newest in a city that sometimes seems to have too many, was certainly worth building. It isn’t quite finished yet (dedication is next week) and you can’t walk around it. My early review: it’s a good addition to the city’s monumental landscape. My favorite element is probably the one that will get the most criticism: the giant white statute of King carved out of stone in a standing pose.
Only one of D.C.’s other monuments—the Jefferson Memorial—depicts its central subject standing and, off hand, I can’t think of any prominent stone-built American memorials with their central subject standing up. So it’s new and different. On the other hand, it respects tradition. The statute’s gleaming white surface harmonizes well with the nearby Jefferson memorial and Lincoln memorials while its landscaped features, in my mind, seem likely to give it a more human scale than the slightly inhuman World War II and Vietnam memorials. In all, I suspect it’s a place that D.C. will—and should—come to value and enjoy.