Tuesday, September 2, 2008

Gustav, Katrina, and what needs to be understood.

Four years ago, one of the worst natural disasters in the history of the United States occurred when Hurricane Katrina hit the New Orleans area. This terrible natural event caused endless amounts of damage, and took the lives of countless people. There is no question that the devastation seen after the fact will surely be imprinted in the minds of all feeling Americans for years to come. It was a risk management nightmare.

Today, New Orleans is facing another similar threat in the form of Hurricane Gustav. While Gustav is a less severe storm, it poses many of the same dangers as Katrina. Unlike Katrina, though, this storm presents us with a chance for risk management excellence.

Gustav presents the nation with the challenge of responding reasonably, and not excessively. We must ask ourselves how we correctly understand risk and how to best respond to it as a society. Risk is the essence of any situation, whether it is a hurricane or the operation of a motor vehicle. It is an unavoidable matter and one that we must come to terms with.

In the days leading up to Gustav there has been a tremendous amount of discussion relating to the risks and threats posed by the storm and how to best respond to them. These dialogues are important and should continue. However if we are ever to actually come to a conclusion on how to best handle these types of situations, we must stop framing the problem in terms of people and feelings. We must start to look at these situations instead more rationally from a risk management standpoint.

The people in the affected areas did choose to live and work in this location. They are aware of the fact that this region is prone to dangerous weather events. As a result, from a risk management standpoint, they need to realize that if they cannot afford to address the risk presented by their current location, they should not live there. Otherwise, they are free to purchase insurance and other means of security to deal with the risks presented by their chosen location. This is how they can exercise good risk management.

There is no question that at this time our thoughts and prayers should be with the people who stand in the line of this dangerous weather event. At the same time, we must remember that many of the threats they now face are ones that they surely have been on notice of for years. As a result, I hope that as we begin considering how to put things back together, we remember how risk should be responsibly allocated. Taxpayers are not an insurance company, and never should be.

By U.S. Grant

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