Catastrophic catastrophic flood insurance

I’ve often written about situations where free markets don’t work. This time, for a change, I’m writing about a situation where government caused disasters by interfering with a free market. In 1965, Hurricane Betsy struck the Gulf Coast, causing massive damage. At the time, no companies offered flood insurance. So in 1968, Congress created the National Flood Insurance Program (NFIP), which is managed by FEMA. Although flood data allowed some commercial insurers to start offering flood insurance over the following decades, there was a problem: NFIP insurance was really affordable.

The spam problem part 3: Objections to attention bonds

In part 1, I enumerated the approaches to spam eradication I was aware of, and explained my conclusion that the only approach which will work is an economic approach. In part 2 I discussed various options for tackling spam economically, ending with the one I think would actually be acceptable and useful: attention bonds.

Now I’ll run through (and shoot down) a few of the objections commonly brought up when the possibility of involving actual cash in e-mail sending is raised.

Katrina and the waves

So it’s a total disaster in New Orleans. Three levees are breached, one of them has a hole over 150 meters across. 80% of the city is under water up to 6 meters deep. The entire city is without electrical power or water supply. It’s estimated that it will be 9–12 weeks before they can even get rid of the water, much less get the city habitable. Interstate 10 is broken chunks of floating concrete; there’s no route into the city for trucks and other major vehicles.

Separation anxiety

The story so far: some unknown git cracked the rear drivers-side light assembly on the Prius, scraped the upper surface of the bumper at truck height, and disappeared quietly without leaving any insurance details. So, the car is in for repairs. While they fix it, the insurance company (GEICO) are paying for a rental car. The temporary car is a Chevrolet Cavalier, the sedan model which starts at $15,175. We’ve got a deluxe one, with the optional CD player and automatic transmission.


Our MA car insurance premium, per year: $2,839. Our TX car insurance premium, per year: $780. And that’s with less than half as much actual coverage on the MA insurance.

Now it can be told

My Prius arrived! Three days ahead of the most optimistic estimate! Now it’s purchased, time to tell the whole story… I started the search on September 16th. Calling the local Massachusetts Toyota dealers quickly established that they all had ridiculous wait lists; the best wait time I was quoted was a year. However, the situation wasn’t completely hopeless—according to the online forums like and, dealers often get cars that are a color or a package that nobody on their wait list wants, or nobody on the list who wants the car can get financed at that particular moment in time.