Tough Love for California - by Arnold Kling - In My Tribe
On Wednesday, I met a woman whose house had burned down in the Eaton fire 1 in Altadena. We were at a layover on the way to California. She had been on vacation, and she was flying to Burbank to be with relatives, some of whom also have had fire damage.
I imagine that this woman is going to suffer terribly for many years. She will spend months or years without a new permanent home, waiting for an insurance claim to be processed. When she finally has a new permanent residence, she will have to go about trying to replace all of her lost possessions.
Private insurance companies have limited obligations to cover losses. Instead, they are reinsured by a state fund. But the state reinsurance fund has less than $1 billion, and the cost of damages from the fires is going to be on the order of $50 billion or more.
In order to receive a bailout, I would require that California pass legislation ceding sovereignty to the Federal government to manage three areas: public employees; water; and forests.
