Isaac to test berm decision, reliance on gouging law
So, seven years after the last hurricane to strike southeast Louisiana took its epic toll, Isaac has rolled onto its land and will test a couple of policy decisions made since.
Among other casualties of Katrina, it had accelerated loss of coastal land. Unfortunately, only the federal government had the wherewithal to start immediately with restoration, and a deal legislatively struck shortly after the event would not start providing Louisiana with significant funds to accomplish this until 2016. But out of bad luck came the potential for good with the Macondo well explosion in the Gulf of Mexico in 2010. Obviously negative was the oil spill that hit Louisiana shores, but an opportunity for one positive outcome was possible when the company for whom the drilling was done, BP, said it would pay for all reasonable damages.
Gov. Bobby Jindal seized the opportunity by getting the firm to pay for berms to catch oil, but cleverly planned their deployment in a way that they could be leveraged into full-blown coastal restoration infrastructure. At no cost to any taxpayer, Louisiana quickly got years ahead in preserving the coast.
Knee-jerk critics of Jindal, of the kind that if Jindal declared 2+2=4 immediately would dispute him, from the start declared the operation a failure, opining that the berms would not last. Joining in for partisan reasons was the Pres. Barack Obama Administration. In retrospective, they did not have to catch much oil. But a couple of years later they were still here and it became clear, as aids to coastal restoration, they were working as intended – at least until Isaac came ashore not far from where much of the building of them had occurred. Thus, this event will determine whether implementation of Jindal’s vision occurred properly, or whether that kind of strategy just will not hold off Mother Nature and man’s alterations of coastal topography.
Another decision in the aftermath of Katrina, then of Gustav in 2008, was to keep and tweak the state’s law regarding price gouging, specifically naming gasoline as an item subject to it. The flaw in this kind of law is that it disrupts incentives for optimal decision-making in times of crisis. Its nebulous nature discourages retailers from setting prices that reflect accurately supply considerations, where under-pricing leads to use by consumers not as parsimoniously as they should and also to a shortage so that some in need and able to pay cannot get any. The market will suppress “gouging” because retailers know ill will caused by prices seen as outrageous by frequent consumers will make them turn elsewhere when the crisis abates.
Posted by Jeff Sadow at 11:35