Prepping for natural or man made disasters should be common practice for most people but, unfortunately it is not. In fact, the people that need to take simple steps to prepare themselves in case of a natural disaster are usually the least prepared. For example, in rural areas, most people have a decent amount of extra food stored compared to those who live in urban areas even though people that live in urban areas will be the most threatened in any kind of disaster scenario. I think that their are a number of reasons for this. People that live in cities have much shorter time preferences in general compared to people who live in rural areas. People living in urban areas are used to having stores with fully stocked shelves and think that these will always be there. This is not always true as we have seen when natural disaster strikes in the form of hurricanes whether in New Orleans or other areas. Shelves of all grocery stores are cleaned out in a manner of hours with massive amounts of people all rushing to get supplies. We might not have hurricanes in the Midwest but there is nothing to say that a tornado might not take out the local power plant.
Man made disasters are even more dangerous as we have seen with the breaking of a major water main in Boston that left millions without water. We have also seen how one guy accidentally shut down the power grid to millions of people in Southern California. This power outage also led to multiple sewage plants all over southern California going down making much of the water unsafe to drink (authorities told people to boil water before drinking, hopefully they did not have electric stoves!). Luckily, these events were repaired rather quickly but, what would happen if this went on for a week? Or a month? These cities would have completely broken down and would have made the looting and violence in New Orleans look mild in comparison. Having a well stocked pantry that can last you a month or more could mean the difference between living comfortably or being in a very dangerous situation.
A final Note: Whenever these events have happened, the local and national authorities have done the completely wrong thing. They immediately institute price controls because they do not want “price gougers” to take advantage of people during a crisis. This guarantees empty storeroom shelves and shortages of life’s most essential items. The very people that are willing to pay extra money because they need life saving items are bared, by law, from doing so. The price system is thrown into chaos and the market is not allowed to provide resources to people that need them most. This is very well understood by economists from every different spectrum. Price controls always lead to shortages because the market is not allowed to clear as can be seen here, here, here, here, here, here, here, and here. Unfortunately politicians never listen and institute price controls every single time. Remember, price gouging saves lives contrary to what most people believe. This is why politicians don’t care what every economist from all corners of the earth say. Simply put, they don’t have the votes.
Also, when we look at Katrina, the government was totally unable to provide basic necessities while at the same time preventing private firms from bringing in needed supplies. FEMA turned away Wal-Mart trucks bringing in thousands of gallons of water while the people in the Super Dome had none for days. Another man was arrested for trying to sell generators after Hurricane Katrina. FEMA often makes a moderate crisis into a life and death situation. Let us not forget how local police became looters and killers themselves after Katrina, all the while harassing citizens and confiscating legal firearms.
In conclusion you should take moderate steps to prepare yourself for a potential disaster, natural or otherwise. Remember, you can not depend on the government agencies in a crisis. The government’s own agencies admit this.
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