2/3rds chance of a Loma Prieta+ class quake in 30 years
deafbox at hotmail.com
Wed Apr 23 18:26:51 PDT 2003
Gregory Alan Bolcer:
>I like to avoid the blame the victim mentality. ..
I'm not blaming the victim. I feel sorry for
anyone who loses their home to flood, fire,
earthquake, or hurricane.
Buying a house is a financial investment, just
like buying stock, loaning money to your brother's
business, investing in a real estate deal, buying
shares in an oil well, or trading derivatives. Now
yeah, I'm real sorry that you learned about your
stock loss when seeing the CTO led away in hand-
cuffs, that your brother turned out to be a bad
businessman, and that the well came up a dry hole.
(If I add up my losses in some of these kinds of
investments, I'm sure I'm well into the six digits
worth of sorry!)
The question is: should the government insure
against such investment losses? And that has a
simple and economic answer: absolutely not. That
would encourage risky investment, and put the tax
payer on the hook for people's bad investment
decisions. Earthquakes, fires, floods, and
hurricanes are common events. Investors have to
plan for them, or accept the risks.
Now yes, I understand that a house isn't just an
investment, but also a place to live. I'm quite
happy for the government to provide temporary
shelter and emergency help to people who have
lost the roof over their head. In this respect,
the renter and the home owner are in the same
That is a separate issue from the investment
aspect. If anyone is not ready to think about
home ownership as a financial investment, to
identify and evaluate the risks, to plan and
maintain insurance where they think it is
necessary, and to take their lumps where they
fail to do so, then THEY SHOULD RENT. That's the
difference between a renter and a property owner.
The first is purchasing shelter, month by month.
The second is investing in real estate.
I'm happy for people to invest. I'll cry with
them when their investments go sour. But I
don't like it when they expect me, as taxpayer,
to cover their losses. It's hard enough for me
to cover my own!
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