Jackie Danicki

I’m taking a break from Twitter of late, for one reason: There are too many otherwise intelligent people proclaiming there that free market capitalism has “failed”. I can’t spare the time or energy to get so pissed off so many times per day, so I’m pretty much ignoring Twitter until after all of this hysteria and retardation has died down. (I don’t hold out a lot of hope that it will, not before the upcoming election.)

So of course I liked this, from Reason, which is a good case in point about this supposed unfettered free market we’ve got on our hands:

The fact that insurance companies refused to insure property located on storm-wracked coasts is not an instance of market failure. A market failure supposedly occurs when the price of goods and services do not reflect the true costs of producing and consuming those goods and services. That’s clearly not what happened here. The market is practically shouting at people, “Don’t build something you can’t afford to lose where hurricanes periodically crash ashore.”

Instead the state “insurance” scheme is an example of government failure which occurs when a government intervention causes a more inefficient allocation of goods and resources than would occur without that intervention. In this case, it’s the government that’s telling people that it’s OK to build in dangerous areas and then not charging them enough for the “insurance.”

via Brian

Filed under: Life