Earlier today, the office of New York City Mayor Michael Bloomberg announced the anticipated economic impact of superstorm Sandy.
We estimate total losses to NYC from #Sandy to be $19billion. We're asking fed govt for $9.8billion for costs not covered by insurance/FEMA.
— NYC Mayor's Office (@NYCMayorsOffice) November 26, 2012
Disaster cleanup is a lousy way to spend $19 billion, even if it creates thousands of temporary jobs. A much better way is to spend money to prevent the worst effects from happening at all. So far, Americans have shown little interest in such foresight. From The New Yorker's James Surowiecki:
[F]or the most part, the U.S. has shown a marked bias toward relieving victims of disaster, while underinvesting in prevention. A study by the economist Andrew Healy and the political scientist Neil Malhotra showed that, between 1985 and 2004, the government spent annually, on average, fifteen times as much on disaster relief as on preparedness.
Politically speaking, it’s always easier to shell out money for a disaster that has already happened, with clearly identifiable victims, than to invest money in protecting against something that may or may not happen in the future. Healy and Malhotra found that voters reward politicians for spending money on post-disaster cleanup, but not for investing in disaster prevention, and it’s only natural that politicians respond to this incentive.
Surowiecki notes another political roadblock: the federal government's ongoing indifference to broad infrastructure spending. Combine the two, and the prospect of preventative investment seems daunting.
Map of post-Sandy flooding.