It seems almost every time I attend an emergency management meeting that is open to the public, someone uses the event as an opportunity to provide political commentary about whether the federal government ought to continue to provide assistance to citizens at all.
At a meeting I attended yesterday, a gentleman raised his voice and interrupted the speaker by yelling about the moral hazard of providing disaster relief rather than forcing citizens to carry insurance for their disaster-related damages. The moral hazard argument is becoming a common criticism of disaster relief by some.
A recent New York Times piece (titled “Moral Hazard: A Tempest-Tossed Idea”) explains that moral hazard is “the undue risks that people are apt to take if they don’t have to bear the consequences.” When applied to disaster relief, the argument is that citizens who are provided with assistance are lulled into complacency and will return to the same lifestyle they enjoyed prior to calamity–thus continuing the cycle of victimization followed by disaster relief. Some conservatives even go so far as to harshly criticize rebuilding campaigns in New Orleans with statements like “they haven’t learned their lesson” and labeling the expenditure of resources in New Orleans as “stubbornness“.
As the NY Times article points out, even the term “moral hazard” is somewhat of a political construct, since “Economists have long complained that moral hazard could easily be described in more neutral language, like “misaligned incentives.” But the term, with its implied judgment, has stuck.” In fact, the term was used to describe reports of misuse of FEMA funds for things like “$438 rooms in New York City and beachfront condominiums in Panama City, Florida, at $375 a night.”
Misuse of FEMA funds is clearly abhorrent but the numbers speak for themselves, and the majority of survivors used their FEMA debit cards for appropriate expenditures. As the GAO reported “debit cards were used predominantly to obtain cash, food, clothing, and personal necessities”.
While some amount of fraud is sadly inevitable, I strongly believe that there is a moral imperative to provide robust disaster relief. As Benjamin Franklin wrote in 1875, “it is better [one hundred] guilty Persons should escape than that one innocent Person should suffer”. Also known as Blackstone’s ratio, justice in the United States is built upon the philosophy that it’s better for a guilty person to go free rather than an innocent person be falsely imprisoned. Applied to disaster relief, it is better for a few impostors to receive disaster assistance fraudulently than for one survivor to go without.
In my opinion, the moral responsibility to our fellow citizens doesn’t end there. I think we are our brother’s keeper. A recent speech by President Obama after Hurricane Irene demonstrates the good that comes out of disaster. The President explained, “the past few days have been a shining example of how Americans open our homes and our hearts to those in need and pull together in tough times to help our fellow citizens prepare for and respond to, as well as recover from, extraordinary challenges, whether natural disasters or economic difficulties. That’s what makes the United States of America a strong and resilient nation, a strong and resilient people.”
As Kant explains in his writings about the categorical imperative: “Each of us has a moral duty to act not simply ‘in accordance’ with what is right but ‘according to’ it. That is, we should act morally for the sake of acting morally, not, for example, because it will make people like us or get us to heaven.” Applied to disaster relief, as a country, we shouldn’t only provide forms of disaster relief because it generates good publicity or has positive political repercussions. There’s a moral duty to act that supersedes fear of misaligned incentive.
When faced with the chance of inertia due to concerns about moral hazard, the moral imperative to support our citizens in a moment of need ought to prevail every time.