Friday Rant: Hurricane Irene, Local Authorities & Opportunity Costs

The anticipation of Hurricane Irene's arrival on the East Coast has been excruciating. As of yesterday afternoon, Irene was tracking -- and still is -- to make a direct hit on Absecon Island in Southern New Jersey where I happen to share a family vacation home and boat. In fact, the arrival of just such a hurricane as Irene has been a constant topic of conversation on Absecon Island for decades.

The island has been uniquely insulated from severe storm damage for the past 100+ years -- the last catastrophic storm leveling occurred in 1903. And on any stormy day, the bar, café and bait shop banter has inevitably turned to when, not if, the "big one" will arrive. Short of a meteorological miracle, it would appear that the wait is almost over.

Mother nature is fickle and our modern forecasters, even more so. Dire predictions of a direct hit on Absecon Island started surfacing yesterday afternoon and by 7:00 PM last evening a mandatory evacuation was slated for 6:00 AM this morning, despite the fact that the hurricane would not strike before Sunday morning. Prior to this notice, I scheduled a boat lift to reasonably safe ground for this AM and had planned to spend the balance of today and Saturday AM securing my house. Upon contacting the local police force last evening I was told it was too late and that everyone would be vacated beginning at 6:00 AM. Since I like to do the right the thing and consider myself law abiding, I figured oh well, that's that. Only to hear today that property owner's were still being admitted to the island as of this afternoon.

The opportunity costs associated with such pre-emptive declarations are immense -- to say nothing of the further exacerbation perpetuated by selective enforcement. Opportunity cost, as defined by Wikipedia "is the cost of any activity measured in terms of the best alternative forgone. It is the sacrifice related to the second best choice available to someone who has picked among several mutually exclusive choices. Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice." The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs."

I'm anti-litigious by nature, but if my shared house and boat sustain damage that would have been otherwise abated via routine pre-cautionary measures officially prevented, I'm jumping into civil procedure with both hands and feet with flippers. Maybe this unfolding debacle will be good for the economy -- so long as the off-shore reinsurance companies don't go bankrupt.

Looks like we may have come almost full circle in the Hurricane alphabet from Katrina to Irene and learned little. Any ideas for the next hurricane beginning with "J"?

- William Busch

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