 Welcome to a discussion of radical, fundamental principles of freedom, rational self-interest, laissez-faire capitalism, and individual rights. The Yaron Brooks Show starts now. All right. We are talking about Hurricane Harvey and the devastation in Houston. I just was looking during the break at some pictures of semi-trucks basically under water and highways closed because of the flooding. It looks like it's a major, major disaster. During the break, I also had a Jordan Peterson moment. Some of you might know who that is, but with regard to the relationship between guilt and weather, I think that if you think about it, this goes way back. This goes back to the Old Testament, right? There is an Old Testament story that connects guilt, human action with bad weather. It's a myth. It's a part of our mythology. It's part of our culture. It's part of the stories that we grow up with. It's easy then, if you will, for the environmentalists to latch on to that and capitalize on it. Of course, I'm talking about Noah's Ark and the story of Noah's Ark, right? God basically says to Noah, humanity is hopeless, the pathetic, the awful, awful people. I have to punish them and I have to destroy them. You are a good guy, so I'm going to save you and your family, but everybody else is going to die because they've been bad people and how they're going to die, I'm going to pour rain all over them, right? It's going to rain for 40 days and 40 nights. It's going to flood everybody, so build an ark and you can save yourself. Think about that as a story at the heart of our culture, at the heart of our religion, at the heart of the last 2000 plus years of Western civilization and it basically says, when a natural disaster happens, when the weather is really, really, really bad, it could just be God punishing us and we probably did something bad to deserve that punishment. Now I haven't heard, Jordan Peterson has a whole lecture on Noah's Ark. I need to listen to that in terms of mythology, but it strikes me that this is deep and my guess is Noah's Ark, by the way, is a story that is repeated in many ancient civilizations, mythologies, it's not unique to Judaism, it's not unique to the Bible, it's in many other places, so this relationship between how we act and the weather has a long, long history in our mythology and therefore in our psyche and therefore in our culture and it's not surprising that the climate change people can leverage that, can use that fact to say you're misbehaving, you're boning fossil fuels, you're living well, you're reducing your risk of dying because of the weather and God or nature or Mother Earth or whatever it is is now penalizing you for that fact. I never thought about the connection with Noah, so that's a new thought coming out of today's radio show. All right, hopefully a valuable one, all right, we're going to go to one other point I wanted to make, actually let's go to Skyler and I'll make the point answering Skyler's comment. Hey Skyler, how's it going? Good afternoon doctor, how are you? I'm good, I'm good, how about you? I'm well, I just want to know on your list of the myriad of agencies of the government that need to be dismantled and eliminated, where does FEMA place? Well it certainly places as one of the agencies that needs to go, you know whether it places very high or not, I don't know, I mean it probably is not one of my first things that I would do, although it's one of the easier ones to eliminate, you know there's a whole slew of them from the Department of Education to FDA, FDA literally kills people, FEMA does too but on a much smaller scale, so yeah FEMA should be gone and FEMA's easy, easy to replace and you know so FEMA would be relatively easy to get rid of, but let's talk a little bit about that, let's talk about the government response to crises that somebody asked earlier about this and I think the important point to make here is that the essence of government as George Washington told us I think in his second inaugural address, the essence of government is force, the essence of government is a gun and as such it has no place in disaster relief, it has a place when disasters happen, right? You should see cops everywhere keeping the peace, you should see, you know you should make sure there's no looting like happens sometimes, you know saving lives, if lives are in danger immediately so kind of the emergency aspect of it, so you can see government where force and the equipment of force, helicopters, things like that are necessary and security is necessary then I can see government has a role, but given the government is force, given the government is a gun it shouldn't be in the business of insurance, it shouldn't be in the business of rebuilding, it shouldn't be a business of telling people how and where to live or how and you know it shouldn't be in that business at all, it just shouldn't be there, so you don't need FEMA, what you need is the National Guard out in the streets, I agree completely with that, you need the police full in force and you need maybe the Coast Guard making sure that people are not drowning and can be saved, you know can be saved safely when they're in trouble, but other than that government just doesn't have a role to play when natural disasters hit and I want to explore the ways in which government intervention actually makes these crises worse and that's where I'm heading, is that what you want to talk about Skyler or any other questions? Yes, you answered my question sufficiently, yes sir. Good, good, well thanks for the call, appreciate your listening, so let's talk a little bit about this issue of flood insurance because one of the interesting things that's going to happen out of this politically is that the law that created federal, you know the federal government provides most of the flood insurance in the United States, the federal government has issued insurance, I don't even like to call it insurance because government can't do insurance, but it's a welfare fund for people who get into, you know, whose homes are flooded, they have three trillion dollars worth of coverage, that's what they're liable for by total, five million policy holders, by far the largest insurers of flood is the government. Now some interesting things about this, this agency, the national flood insurance program is in the hole, it's in the red for 24 billion dollars, so it's basically borrowed money from the Treasury, so it works supposedly like insurance, people pay in a premiums and then when a flood happens it gets paid out to them, but since the premiums are nowhere near high enough to cover the actual damages, then since this is a federal agency and it has a printing press in a sense, then what the government does is it borrows money from the Treasury, it borrows money from itself to fund the liabilities, so when a flood happens like now in Houston, the national flood insurance program does not have enough money to pay off even the people who have policies with them and they're going to have to take a loan from the Treasury, now they already owe the Treasury 24 billion dollars, 24 billion dollars, so they are constantly contributing to the increased debt that the federal government has because, you know, imagine if this was a private company, they would have been bankrupt decades ago, this is an agency that's existed since, a program that's existed since 68, they would have been toast a long, long, long time ago, so here's an example of government force, a gun, trying to provide a market service insurance and it's bankrupt, it's been bankrupt forever and it's going to be even more bankrupt after these floods, they're still going to pay out because they'll just borrow money from the Treasury, but they are going to be bankrupt, what makes it interesting right now is that the so-called mandate runs out in September and Congress is debating right now reforming the program before reauthorizing it and it's going to be fascinating to see and you will see how all these so-called, not so-called, all these Republicans who are so-called free market types are going to embrace socialism when it comes to a natural, national flood insurance program in September in order to reauthorize this and recapitalize it with more of your hard-earned tax money. All right, you're listening to the Iran book show on the Blaze radio network, we're going to take a quick break and we get back, I want to talk more about this flood insurance, the incentives it provides and why it's bankrupt, we'll be right back. We're the author, media contributor, this is the Iran book show, the Blaze radio network. You're listening to the Iran book show on the Blaze radio network. All right, we're back and we're talking about flood insurance in the context of what's going on in Houston right now and just awful devastation that is going on over there and look, I mean it's easy to dismiss flood insurance but I think it's interesting to look at the history and look at what it actually does and how damaging, how destructive, how stupid this policy really is. I mean at the end of the day this is massive redistribution of wealth but it's redistribution of wealth in kind of weird directions and it provides very bad incentives and that's what I want to talk about. So the federal flood insurance program was established in 1968, turns out in the 1960s there were a lot of floods and it turned out that a lot of people were flooded in the Midwest and in the Gulf area did not have insurance because they did not buy private insurance and in some cases because private insurance was not available to them and at this point what you saw on television or what you heard in stories is people whose lives have been devastated, whose property had been destroyed by floods, by rain, by you know through flooding and they had no recourse. There was no FEMA in those days, there was no flood insurance granted by the federal government, there was only private insurance and many of these people just didn't have that private insurance whether it's because they didn't buy it or in many cases because it just wasn't available because no private insurance companies would insure them. Why? Why wouldn't an insurance company insure somebody? Well maybe because the risk was too high, maybe because the risk was too high and part of the problem with insurance is, with flood insurance is that the risk is geographically concentrated so to really do flood insurance in a private sector properly you need to be able to do it across state lines in a variety of different geographies, there are regulations that make this difficult but it just is difficult because people who want flood insurance are people who live in flood plains, people who are exposed to flood risk. I don't buy flood insurance in California where I live because I need fire insurance, I need earthquake insurance, I need maybe mudslide insurance but I don't need flood insurance because I'm not going to flood. People with, I'm going to flood, I'm going to want it at the same time and it's going to be a certain concentration of them and you need some good diversification, you need some modeling. Also if you flood all the time, I can't give you insurance. Insurance is not for something that happens every day. Once a year insurance is something for things that are unusual, extraordinary. So instead of saying, huh, if private markets don't provide insurance here, maybe it's because people shouldn't live here because the risks are too high. Instead of that, what government decided and what I'm sure at the time the press and academics said, no, no, this is market failure. Why is it market failure? This is typical of how they use market failure. There's a need, people need insurance and the market's not providing the need. And therefore it's a failure of the market. Yeah, there's a need, but it's an irrational need because the risk is too high and that's why the market's not providing it and nobody should provide it. If somebody wants to live there, let them bear the risk, let them suffer the consequences. But you see, we can't do that, just can't do that. We can't say to somebody, bear the risk, suffer the consequences. Not in a world in which altruism, a morality that says that I'm all responsibilities to take care of our brothers and sisters and neighbors and all Americans really globally, every human being on the planet, you should take care of. A morality that says, no, no, you need to protect them. You need to take care of them. And if they're not going to move, you can't tell them to move. They're going to live their life. Who are you to tell somebody to move? And they're going to suffer. Then you need to remedy the suffering. And the way to remedy the suffering is to have the federal government step in and to tax us to take our money so that these people can have it when they suffer. So the solution is a federal program to ensure people that the private market would not insure. And originally that was a certain size population, not a massive population because not a lot of people want to live in very risky areas when they can buy insurance. So when the program is first instituted, very few people are part of the program because it's only those people who are really risk takers and building on these things or people who didn't know how risky their property was. And they're the ones who buy this insurance. Imagine what happens over time. Now I look at that coastal islands in North Carolina and I say, oh my God, there's some beautiful property over there. Yeah, it's on this island that's barely above sea level, but I can build the house a little high. And yeah, it might flood once in a while, but I can now buy insurance from the federal government. And it's actually pretty cheap. And so why not build my home there? And particularly if it's a vacation home and I actually don't live there most of the year. So when the hurricane hits, I'm not going to be there anyway. And what you've seen is massive amounts of growth, massive amounts of buildings in high risk areas for flooding, high risk areas for flooding, primarily by relatively wealthy people who are buying a second home and who then insure it with the federal government. Now you would say some of these homes are uninsurable because they flood the water. Two minutes. But it turns out that it turns out that the federal agency has to provide these insurance policies. They can't say no. I didn't realize this until I started reading up on this. But it turns out that one of the differences between this federal program and real insurance is that they cannot deny coverage to especially risky properties with histories of repeated, extensive floods. So there you go. They have to provide you with insurance. You could buy, build a house. Anyway, right? Some of your floods every year. You can still get insurance and every year that we covered and every year you rebuild and it's completely subsidized. It's unbelievable. This is fraud. This is redistribution of wealth. This is a scam on massive proposal. And so the government is so what's happened is we've seen large increases in the population now living or at least that have homes in places that have massive exposure to flooding. Which is the exact opposite of what you actually want. And the exact opposite of what private insurance would actually do. Because private insurance would not ensure certain homes. And therefore provide them a distance center from building there. And insurance premiums would be very high on homes that had a very high probability of flooding. And that would provide a distance center for building there. So you've got all the incentives screwed up. All right. We've got a hard break coming up here. You're listening to your own book show. We're talking about flood insurance. And we are going to take a quick break. This is your own book show on Blaze Radio Network. You're on Brooke. All right. We're talking about flood insurance and, you know, the devastation of the flood in Houston and its consequences at least when it comes to insurance. And we'll talk about FEMA in a little while. So, I mean, this flood insurance makes no sense. Now, I want to make something clear when I emphasize something. I don't blame politicians for this, although, you know, they obviously share in the blame for this. This is us. This is the voters. This is us demanding something be done. And I'm sure in the 60s when the flood happened and the government did nothing because the government had no role at the time. There was no FEMA and there was no, there was no federal flood insurance. I'm sure there was a huge outcry. Oh, my God. People are suffering. Somebody has to do something. And instead of people actually going and writing a check and helping their fellow man out, they demanded federal programs. They demanded the government do something. And I bet you Republicans and Democrats voted for this. This is probably passed with a big majority. This is the morality of altruism. This is the idea that when something bad happens to somebody else, it's your moral responsibility to do something. And since we all know that most of us are too selfish to do anything, we just delegate it to the government to do it for us. Delegate it to the government to force us, to curse us, to take care of the situation. That's how all these programs coming to being time and time and time again. And again, we'll get to how FEMA works in a minute if we have time. So the flood insurance, right? Not only they have to provide it to whoever wants it, but in addition to that, about 20% of all policies are subsidized, explicitly subsidized. There's a government subsidy because there's some rule that says that FEMA is required to subsidize policies for properties constructed or substantially renovated before 1975. And if you have an old place, you get a government subsidy. Instead of telling you to knock it down, or the fact that you have an old place that doesn't meet standards, we can't insure it. No, we do the opposite, exact opposite of what a market would do. We tell you, oh no, you're going to get a subsidy because I don't know why, because. Also, there's all these issues about maps, flood maps, flood zones that FEMA puts out. And where you fall in these maps determines the riskiness for floods, which will determine the rate that you get. And again, this is FEMA doing its own market. It's not insurance companies, so you know the rates are all going to be screwed up. But the idea is because FEMA didn't have these maps before 1975, then it's not your fault and therefore we need to take care of you and therefore we're going to subsidize you. So we're talking about a system that makes no sense. By the way, wealthy of households benefit disproportionately from this program. They own many of the homes that insured. And by the way, for example, in Houston right now, over 80% of the homes are not insured through this program are not insured at all. And part of the reason for that in my view is because of FEMA, which steps in and helps you out after disaster and therefore your incentive to even buy insurance goes down. So this program is bankrupt. It makes no sense. It provides the wrong incentives. It's distorted. And everybody knows this. This is not a secret. You can look it up online. And there's a bunch of stories just before the hurricane in Houston. And now this program is completely already in bankruptcy. And this is going to make it so much worse and the Congress is debating what to do about it. And of course, who's stopping real reform or privatization? Real privatization would be the solution, right? Just give it to private insurance markets. Make sure they're not heavily regulated, that they can function freely and let them determine the insurance rates for all these properties and provide the right rational incentives because that's what markets do. Who's objecting to this? Well, of course, it's Marco Rubio. Marco Rubio, the free market guy, right? From the state of Florida because a lot of these homes are in the state of Florida and God forbid he should vote for free markets. If it's to expense in quotes of some of his voters. Elizabeth Warren, who just wants government to control everything. Why stop at insurance? I don't know. If she's here in this article, it says she's a coastal senator. I don't think Massachusetts gets much flooding. Maybe I'm wrong, but it doesn't strike me as that. Anyway, and because a lot of the beneficiaries of the subsidy and because of the beneficiaries of the insurance are wealthy, they lobby heavily. There's a massive lobby to not reform this program, to not make it market based, to not privatize it. And that's why it ain't going to happen. It ain't going to happen. Add to that the altruism. Add to that that we've got a catastrophe right now where they're going to be pictures of people suffering all over the media for weeks. No way, no way is this program going to be reformed. I don't care who's in the White House. Right? I mean, and Trump, not exactly a free market guy anyway. All right, let's quickly take a call from Jennifer in Michigan. Hey, Jennifer. Hi. Hey, you've got an interesting question about disasters. Yes, about evacuation. I was wondering, do the authorities, do you think they have the right to ask the force you to evacuate? And if you refuse, are they then obligated to rescue you if you get in trouble? Yeah, good question. So my view is no, they do not have the right to force you to evacuate. They certainly should encourage you to evacuate, but not to force you to evacuate. But if they warn you and they say you should evacuate, if there's a so-called mandatory evacuation notice, and you don't evacuate, then you're on your own. No firefighter should risk his life to save you if you were told to evacuate and you did not. No Coast Guard should risk their life to try to save you off of a roof if you were told to evacuate and you did not. So no duty on the contrary. I would say they should focus on those places where they didn't warn them or where people's lives are threatened, but not protect the people who didn't listen to them. Now, sometimes authorities screw up, like it's not clear what people in Houston were told. The governor said evacuate and then the mayor said don't evacuate. So, you know, when the government is that confused and that unclear, then I don't think you can blame people for not having evacuated. So, but if there's a, in California, you call it mandatory evacuation order because of a fire. If that, if they deliver that and you don't evacuate, tough, tough. Yes, I agree. All right, good. Thanks, Jennifer. Thanks for calling. Thanks for listening. And you guys listening to, you're listening to your own book show. This is the Blaze Radio Network. We're going to take a quick break here and I want to when I come back, wrap this up. Talk about FEMA, talk about the rotten incentives they provide, talk about what the alternative to FEMA is. We know what the alternative to government mandate, to government provided flood insurance, but what's the alternative to, you know, marching to the rescue once catastrophe has done? What could replace FEMA? All right. Listening to your own book show will be right back after this. These messages. Clear. This is the Iran Brooks show. The Blaze Radio Network. This is the Iran Brooks show. All right. Listen to your own book show. We're talking about the hurricane that hits Houston, the flooding, the disaster that's happening there and the added disaster, which is the federal government intervening in the whole process through flood insurance and through FEMA. And of course the question is, and remember FEMA by providing assistance after the fact and providing loans and loan guarantees and just outright cash to people. Disincentivizes people from seeking out insurance. And we have the same thing here in California where earthquake insurance is expensive as it should be because it's earthquakes, but part of and part of the problem again is is diversification. You you if you're an insurance company, you can't have all your customers in California because one major earthquake happens in California. It could be a real disaster to a big part of your paying base. So you have to you have to be able to be a national entity. You have to be able to sell earthquake insurance in other parts of the country. Other parts of the country don't have as much earthquake risk. So it's it's it's difficult because it's so highly correlated. So instead the government steps in it takes over earthquake insurance. Most people just don't buy it because they figure FEMA will bail them out. So why even buy it? Now, the government has the earthquake insurance. They haven't gotten enough premiums to pay out. So as soon as the next earthquake happens, they're going to be completely bankrupt, completely bankrupt. And they're going to pay us, but they're going to pay us by taking on debt at the state level. So just wait until the next big earthquake in California could bankrupt the state. The next hurricane in Florida could bankrupt the state of Florida. Because Florida has I think Florida has insured all the insurance companies. So it's just a mess. Come and just stay out of it. Don't regulate. Don't control. Just stay out of it. Markets can handle this beautifully. And this relates to this issue of FEMA. What happens when you have a disaster like this? Who would help people? I mean, people need help. I'm not denying that people really need help. Who would help them if there wasn't a fee or if there wasn't a federal government? Well, a good example of this is the 1906 San Francisco earthquake and fire. The fire followed the earthquake where about 30,000, sorry, 3,000 people died. And about 80% of the city of San Francisco was destroyed. 1906, 3,000 people died. 80% of the city was destroyed. One of the worst natural disasters in American history. I think the worst is the Galveston hurricane that we talked about earlier in the show. And what happened? There was no federal programs. There was no state federal insurance schemes. There was some insurance but not well-developed insurance markets. So what happened? Well, there was a massive private response. A lot of the very wealthy industrialists of the time, those horrible people that we like to call rubber barons, stepped in and wrote big checks to help. So they funded relief efforts provided by organizations like the Red Cross, my private charity. The railroads. Railroads stepped in and landed up evacuating over 200,000 people from the disaster area, free of charge. Johnson and Johnson, which was even then was a big consumer products company relatively new at that time, rushed in with supplies, far faster, far more efficient than anything FEMA can do, because they were in the business of logistical supplies. And in those days, logistics was, whoa, right, horse and carriage. Maybe, oh, well, those railroads, railroads, right? But still, hard stuff, hard stuff. And private charity, Red Cross and other private charities stepped in and helped out. And people helped rebuild the city. Private businesses came in and rebuilt the city because of the value that San Francisco represented, the ports, the location, and it was all rebuilt in spite of the danger of a future earthquake happening again. Without federal help, without billions of dollars, without flood insurance or earthquake insurance for that matter. Right? So in today's dollars, people estimate the property damage from the San Francisco earthquake to be $10.7 billion. Insured losses at the time. So I guess there was a lot of insurance. So I'm wrong. There was a lot of insurance. Insurance industry, socials, tallies, the equivalent of $6.26 billion. Right? So there was. So a lot of it was covered by insurance. And people stepped in and San Francisco is built in one of the most magnificent cities in the world today. So private enterprise, private insurance. All the government has to do is get out of the way and ensure security, what they didn't do in New Orleans, ensure safety. Allow for the Walmart to be able to get there and make sure that they're safe in opening up the stores after a disaster. After Katrina, the first supplies to get to New Orleans. Two minutes. Work from Walmart. So get the government out. The government gun, government force, government coercion. And that's what government is. I'm not attacking government. I believe government is a necessary good, good for what it does well, which is protect us. Protect us from physical force, not protect us from nature. Protect us from physical force. Do the policing, the military and the arbitration of disputes. And there would be a lot of disputes after Hurricane earthquake. I'm sure. But stay out of insurance markets. Stay out of humanitarian relief. Stay out of things that voluntary markets do. Are the only ways and really which we can deal with stick to protecting individual rights. All right. We're about to wrap up here. We're about to run out of time. I want to make this point. The central problem that we face, the original sin from a Noah's Ark perspective is altruism. Altruism makes it possible for government to intervene here. Altruism demands that government intervene here. It's the morality of altruism that creates the demand for big, intrusive, unlimited government. And government can only grow and will only grow. Republicans, Democrats doesn't matter. Right left doesn't matter. 30. As long as altruism is the morality of the land. And altruism is dominant both on left and on right. Right another way in which I am different from left and right. I'm an egoist. I believe in rational long-term egoism. All right. The only place in the world you'll hear this stuff. You're listening to your own book show on the blaze radio network. We'll be back next Sunday at 11 a.m. Pacific time. See you then. Clear? Applying the principles of rational self-interest and individual rights on your radio. Right. On Brooks Show. On the blaze radio network.