Problem: What was once considered prime real estate has lately proven to be nothing more than a giant hurricane magnet.
Obvious solution: Don't live there, move away, build somewhere else.
In recent months, Florida's insurance crisis has mushroomed, spreading quickly from homeowners unable to cope with soaring rates to businesses facing policy cancellations, dwindling coverage and out-of-this-world costs if they can find insurance at all.
We brought together a group of lawmakers, a regulator, insurance agents and business and consumer leaders, including Marks, for a roundtable discussion on the crisis, its impact and possible solutions.
Florida already regulates what insurance companies can charge for a particular policy. You know, Florida, the place that's been hit by, what, five major hurricanes in the past three years? The result was typical, shortages. The surprised reaction was also unsurprising, "You're a a bunch of greedy awful corporations taking advantage of us little guys! We won't let you charge what you think it'll take to cover your costs and make a profit. This is what you can charge! Ha! Take that! Wait! Wait! Come back! Hey, Mr. Congressman, pass a tax or something so we can have our condo/beach business back!"
People will only live where it's affordable. But they want to live wherever they please. When markets are allowed to work, the cost of building or living in a hurricane zone, flood plain, fault line, or tornado alley rapidly exceeds what most people can afford, and so the population in those areas falls all by itself. Unfortunately, human nature means people do whatever they can to distort and control those markets so they can build expensive things in the paths of forces which will readily destroy them. They'll then use the levers of government to make us pay to rebuild it all again. And again. And again.
And that's when we all lose.
Profits are not greed. They're a measure of how efficient it is to do something. The prices they generate provide a powerful and effective method of modifying human behavior so it becomes less wasteful over time. Mistaking profits for greed and then trying to legislate your way out of a problem allows people to ignore the obvious and continue their wasteful ways.
The popular response is not to trust the market, it's to legislate some more. After all, it's working so well right now. That it doesn't work, never has worked, and never will work is immaterial. It's not our approach that's the problem, it's that we haven't found the right set of rules, or the people are too stupid to follow them. Pass some more laws! Put the kulaks against the wall! It'll eventually get better! Keep trying!
It's not greed. It's a direct and extremely effective measure of the price of doing business somewhere. The kind of people who ignore this are the kind of people who'll live in a hurricane zone.