Wednesday, September 14, 2005

Lessons from Katrina on government intervention

Reason makes some observations.

Had there been a futures market on buses in New Orleans, the value of the buses would have skyrocketed as Katrina approached, signaling their increased utility in the emergency. But even without such an overt market signal, any private owner of the vehicles would have exhausted all opportunities to save his or her property. Nobody who owned such a potentially valuable product would have done what New Orleans Mayor Ray Nagin did: let it all go to waste on the assumption that drivers would be impossible to find. Greyhound, after all, did not leave hundreds of its buses to be destroyed.

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