Thursday 7 January 2016

Transitioning - Floods and Money

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Below is my comment on Fixing the Floods - A Modern Money Approach.
Thank you for the interesting post. It makes a lot of sense to me. However, I just wonder: where do you draw the line? At what point do you transition into a planned economy? How do you contain a political dynamics that finds people competing for the right to determine, like a central planner, what "the only sensible thing to do" is?

I am not suggesting such a transition is inevitable, I just fail to have a sharp picture before me of how excesses can be avoided. A state that can act as you suggest will likely be the object of intense political greediness, which may lead to a gradual or even sudden demolition of constitutional barriers to governmental arbitrariness.

It is terrible what you and your friends are going through at the moment - I hope you are well and reasonably protected from the catastrophe - and I do not wish to belittle your suggestions for improvement, yet, stepping back a little to see a larger picture, I feel ambivalent: freedom is not a free lunch. She has her benefits, and she has her costs. Could it be that failing to achieve perfect outcomes in situations such as described by you, counts among the costs of freedom? But, of course, I do not feel this consideration is taking me closer to a solution or a clear stance on the matter. I am left with - ambivalence.
Somehow my comment never got published - I am almost certain I did not follow the publishing procedure correctly. At any rate, in the meantime Matt Ridley has offered these observations on the flood in Northern England, revealing many of the problems that I allude to above concerning the trade-offs between private and public approaches to social and economic challenges:

Make sure to read Ridley's entire piece, from which I excerpt the following:
But if this were a private company, chartered to manage rivers, it would lose the contract. After York was inundated in 2000, Carlisle in 2005 and Cockermouth in 2009, the least we could expect is that the agency responsible for flood management would either prevent a re-occurrence, or publicly admit that this was impossible. Instead, it spent a fortune on measures that it said would work and didn’t. This is what an EA spokesman told the BBC in January last year: “You can never say never to flooding happening, but what we can say is Carlisle is a well-protected city. The flood defences we have put in place would accommodate and defend against the flooding of 2005. The city would be safe from flooding.”
As for budget cuts, I hope you will challenge the idea, all too common in the public sector, that success is measured by the amount of money spent. The EA was proud that it had spent £38 million on flood defences in Carlisle since 2005, but was it well spent? It’s well known in my part of the world that contractors adore the Environment Agency. Jobs that a local digger driver would do in a couple of days in exchange for a bottle of whisky and a few hundred quid end up getting discussed by committees for months and costing the taxpayer six-figure sums.
While thinking about budgets, please have a really good look at the change in priorities that came with this country’s gold-plated implementation in 2000 of the EU Water Framework Directive. In my experience, the EA talks of little else, and explicitly admits that it and other directives changed its incentive from river management to biodiversity and water quality. Here’s what the National Flood Risk Management Strategy says: “In all instances, flood and coastal risk management should avoid damaging the environment . . . and wherever possible work with natural processes and always seek to provide environmental benefit, as required by the Habitats, Birds and Water Framework Directives.”
The directive was one of the first times the European Union invited the big green environmental organisations to get directly involved in policymaking. As one study of the episode concluded: “The environmental lobby was swift to capitalise on recent changes, and is in as strong a position as it has ever been to shape European water policy.”
Lord De Ramsey, who was the first chairman of the EA and retired in 1999, has this week criticised John Prescott’s decision to appoint the head of the RSPB as chief executive of the EA after he left, since she — Barbara Young — “put environmental concerns before timely maintenance”. This is a serious charge.

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