The broken trailer fallacy

Edward Stringham and Nicholas Snow ()

International Journal of Social Economics, 2008, vol. 35, issue 7, 480-489

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 Frédéric 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 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:v:35:y:2008:i:7:p:480-489

DOI: 10.1108/03068290810886885

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