The Broken Trailer Fallacy: Seeing the Unseen Effects of Government Policies in Post-Katrina New Orleans

International Journal of Social Economics, Vol.35, No. 7, pp. 480-489, 2008

10 Pages Posted: 9 Sep 2010 Last revised: 28 Dec 2010

See all articles by Edward Peter Stringham

Edward Peter Stringham

Trinity College; American Institute for Economic Research

Nicholas A. Snow

Wabash College - Economics

Date Written: 2008

Abstract

Purpose – The purpose of this paper is to analyze some of the unseen negative effects of the post-Katrina government policies dealing with housing in New Orleans.

Design/methodology/approach – Since Hurricane Katrina, the government, along with private for profit and not-for-profit organizations, has worked to rebuild the city of New Orleans. This effort is most evident in the response to the housing crisis that followed the storm. The government has spent billions of dollars and brought thousands of people in to rebuild homes and other infrastructure in the long run and to provide stopgap measures in the short run. The approximately 120,000 Federal Emergency Management Agency (FEMA) trailers in the region are one of the most visible examples of government efforts.

Findings – The paper finds that while the trailers did provide benefits to those who received them, it could be argued that the government’s policies aimed toward solving the housing crisis suffer from Fre´de´ric Bastiat’s broken window fallacy. FEMA trailers and the multitude of workers brought in are examples of what is seen, and, as Bastiat showed, we must also look at what is unseen.

Originality/value – The paper is of value in showing that the trailer problem, among many others, has weakened the relief effort.

Keywords: United States of America, Natural Disasters, Man-Made Disasters, Floods, Economic Theory

Suggested Citation

Stringham, Edward Peter and Snow, Nicholas A., The Broken Trailer Fallacy: Seeing the Unseen Effects of Government Policies in Post-Katrina New Orleans (2008). International Journal of Social Economics, Vol.35, No. 7, pp. 480-489, 2008, Available at SSRN: https://ssrn.com/abstract=1674463

Edward Peter Stringham (Contact Author)

Trinity College ( email )

Hartford, CT 06106
United States

American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States

Nicholas A. Snow

Wabash College - Economics ( email )

P.O. Box 352
Crawfordsville, IN 47933-0352
United States

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