Green Diamond and the Moral Hazard

In 2005 Columbia Ventures, LLC, the Myrtle Beach-based developers pushing the Green Diamond (now called Vista Farms) development won a suit in federal district court to throw out the current FEMA flood map that placed the Green Diamond area within the 100-year flood plain. Columbia Ventures' beef with the map was that FEMA did not factor in the existence of levees in the area in making its determinations for the flood map. The Southern Environmental Law Center, on behalf of FEMA and a Cayce neighborhood association that opposes the project, argued that the existence of the levees were not, and should not have been taken into account by FEMA because they failed to meet the regulatory specifications that levees must meet in order to be effective enough to alter flood plains in such a way as to justify alteration of the map. Their argument can be found here Columbia Ventures won the case, but it has been appealed and is awaiting a hearing.

It is notable that the levees in controversy existed in 1976, the last time a major flood event inundated the area and failures in both their structure, construction, and placement were cited as root causes of over $4 million dollars worth of damage (and the property was not even developed at the time). At that time, and in every flood map since, the Green Diamond tract has been included in the Congaree River's 100-year flood plain. Many people interpret the "100-year" flood plain to mean that a flood can be expected in the area about once every 100 years. That is wrong. Actually the 100-year flood plain experiences about a 1% chance of flooding each year. Thus it is possible to have a 100-year flood each year for any number of years until we give up on developing the place and just call it a lake.

This brings me to the point of this post. That the NFIP exists, and that courts are willing to toss out flood maps and essentially green light the development of proven flood plains leads companies such as Columbia Ventures into what the risk-assessment industry refers to as "moral hazard"- the phenomenon that occurs when people are insured from a risk and because of that fact fail to take measures to mitigate any damage that might arise from the risk. Thus, as the moral hazard occurs in the pool of insureds, the overall cost of insurance goes up. So then, when someone like Columbia Ventures decides to develop such a risky property, the cost of insurance for all who need flood insurance rises. The problem is that flood insurance is subsidized by the federal government and any losses that are incurred by the NFIP are passed on to taxpayers. Furthermore, the problem is exacerbated by the fact that subsidized rates, by definition, are not actuarially sound- that is, they do not reflect the actual risk they insure, thus compounding the moral hazard for developers of flood-prone lands.

The Green Diamond Should Stay in the Rough

Recently, the City of Cayce decided to annex the Green Diamond flood plain, located in lower Richland County for development. The timing, and hurried nature, of the decision is related to a window of time in which the area will be legally amenable to development. As part of an effort to modernize and make sustainable the National Flood Insurance Program (NFIP), FEMA, who is in charge of administering the NFIP, has been updating flood maps. The most recent map of the Green Diamond area has been thrown out by a federal court, not due to inaccuracy, but rather to administrative miscues in creating the map (imagine that, administrative miscues from FEMA).

The result of the court's decision to throw out the recent flood map is a window of opportunity for developers who have been salivating over the Green Diamond tract for some time now. They now have a limbo period in which development of the Green Diamond flood plain is not restricted by its flood map status. As FEMA works to put out a new flood map of the area, which will undoubtedly render the Green Diamond flood plain uninsurable, the developers, apparently in conjunction with Cayce's mayor and city council, are working to build on the flood plain.

One major facet of the project will be flood "protection" afforded the area by a levee system. One might think that only 2 years after the devastation caused by the breech of New Orleans' levees, that our collective memory might dissuade the development of flood-prone areas. But no, the technological hubris that has characterized our great nation for so long still prevails. Development of the flood plain moves forward.

The aforementioned "window of opportunity" for the development has little to do with federal property controls (at least overtly) and everything to do with insurance. Long ago the NFIP was created by the federal government because private insurers would not insure properties in flood prone areas. The private insurers cited essentially market-based concerns as to why they would not insure the properties. In order for the insurance companies to retain the ability to deal financially with a catastrophic flood event, the actuarially sound rate that would be passed to the homeowner would be unaffordable.

Enter the NFIP, the insurer of the uninsurable. The effect of providing flood insurance to low-lying, flood prone areas has been marked. Development of coastal areas and river flood plains has increased exponentially. In the process populations in those areas have grown rapidly. The result is an unsustainable insurance time bomb on nearly every beach that is susceptible to hurricane events and riverbanks around the country. Because of the federal policy of encouraging development of flood prone areas the NFIP has become a money pit. Congress has expressly admitted (see H.R. 3121, pending legislation entitled "The National Flood Insurance Program Reform and Modernization Act") that the NFIP, in its current form, is completely unsustainable and unable to deal with catastrophic events such as the 2004 and 2005 hurricane seasons. The pending legislation proposes to phase-in actuarially sound rates for some (mostly commercial properties and second homes) properties in flood plains and to add wind damage to the federally subsidized insurance coverage. The list of criticisms of the NFIP and the proposed reform is too long and complicated to post here, but I have an extensively researched academic paper for any who are interested.

The point of this post is to expose the true nature of Cayce's hurried annexation of the Green Diamond flood plain. If the development occurs between flood maps, then all of those properties will be insurable at the discount NFIP rates. The problem for those of us who will not benefit from the Green Diamond development is that when the area eventually floods, an event that would be severely exacerbated by a levee system and subsequent breech thereof, the cost of insuring the losses incurred will be passed directly to the taxpayer. In the meantime, the cost of bearing the risk of flood for the Green Diamond area will be borne by the insured (those people with property interests in the development) and the insurer (the federal government and, by extension, the taxpayer).

There are more criticisms of the Green Diamond development, which I plan to post when I have the time, but the biggest issue by far, as evinced by the rush to annex and develop the area, is insurance.

"Lindsey Graham is Too Liberal" (Seriously, It's a Quote)

So I'm driving through West Columbia yesterday and, prominently placed among the plethora of political signs is one that reads "Buddy Witherspoon for Senate. Because Lindsey Graham is too liberal!" Seriously, I'm not making this up. Apparently Lindsey Graham is too liberal and this new guy, Buddy Witherspoon (a dentist by trade) is working to replace Graham in the US Senate on an anti-abortion, anti-illegal immigration, anti-"death" tax, pro- Iraq war, pro-individual liberty platform. He can be found online here. So, if you are one of the five or six insane South Carolinians who agrees with Mr. Witherspoon that Lindsey Graham is, indeed, too liberal, then here's your man.

Backpackgeartest.org

I am growing a bit weary of politics, so I thought I'd blog on something I actually like for a change. I have recently found a website, backpackgeartest.org, that allows ordinary people to submit reviews of backpacking gear that they own and to become testers of gear that is sent to them to review. The site also has an archive of all of the gear reviews that can be extremely helpful to people looking for an honest opinion about a piece of gear they're considering buying.

I have been going through the process of becoming a gear tester and I have to say that the group has really structured the experience so that it is easy and relatively painless, yet it is tough enough to weed out those who are not serious about it. I'm impressed with the site, its standards, and its member reviews which are almost always informative. If you're into backpacking, I would highly recommend the site.

This post gives me another opportunity to show off a camping picture too. The picture for this post was taken on my recent trip to Cold Mountain. We are camped just off the Art Loeb trail about a mile and a half from Deep Gap.

In(dividualist)to the Wild

A couple of days ago I read the first book since I started law school that did not have to do with some aspect of the law. The book was Jon Krakauer's Into the Wild, the story of Chris McCandless, a self-styled and controversial intrepid wanderer who walked into the Alaskan wilderness and, after 114 days, starved to death in an abandoned bus that sat by the Sushana River. The story of McCandless has come to prominence recently because of Sean Penn's movie based on the book. i have read many reactions to the McCandless story, and have found that many people express resentment toward him and his death. Indeed, Krakauer even chronicles some of the criticisms of McCandless that surfaced after the article that led to the book was published in Outside Magazine. The overriding theme of McCandless' critics seems to be that he was selfish, hubric, and under-prepared. People say that he ought not be made into a hero, that he should have thought more about his parents and others who cared for him, that he sets a bad example for people considering setting off into the wilderness to find themselves. I however, think these people have missed the nuance of the story. Chris McCandless was never meant to be heroic, his story was chronicled because it represents the convergence of tragedy, American mythology, and that aspect of humanity that makes us distinctly human and frail- that existence between extremes that is at the same time mundane and austere, yet, when it surfaces in people like McCandless, seems so very extraordinary.

I find myself comparing the story of McCandless to that of Aron Ralston, whom we all remember for being the guy who did what it took to survive, who challenged our self-perceptions and forced us to ask- could I do that? Ralston, of course, is the hiker whose arm was pinned by a boulder and who, after several days of suffering with little food and water, was forced to cut his own arm off to free himself. I bring up Ralston's story not in juxtaposition to McCandless', but rather peoples' reactions to the stories in juxtaposition. No one decried Ralston for being unprepared, or for possessing only that youthful hubris that would lead him into such a precarious position. Even though Ralston was hiking alone, had told no one where he was going or when to expect him back, and made the classic mistake of trusting his weight to a precariously perched boulder that had wedged itself into a canyon, a well-known canyoneering hazard. Yet Ralston has written a book about his travails, and now works as a public speaker, thus capitalizing on his brush with death. McCandless, on the other hand, made many of the same type of mistakes as Ralston, but perhaps his downfall is simply that he died, thus never allowing him the chance to make money from his story.

But the purpose of this post is not to point out the hypocrisy of McCandless' critics, but rather their ignorance as to what it really means to be American and human. When McCandless' body was found, there was a stack of books, many bearing notes and highlights from McCandless. One of the authors featured prominently in the collection was Henry David Thoreau, another American made famous for going "into the wild". The influence of Thoreau is perhaps one of the most vexing aspects of McCandless' story. When Thoreau wrote so vividly in celebration of the rugged individualism (not his term, but descriptive of the notion nonetheless), he was not describing what should have been, but what he saw all around him. That is the American ethos, the lifeblood of this country, and, at least during its formative years, what it meant to be an American. That, as Booker T. Washington so eloquently put it, a man can pull himself up by his own bootstraps. Self-reliance was how Emerson put it. Individualism is at the heart of American law, politics, philosophy, and life. Individualist notions permeate our Constitution the writings of the Enlightenment thinkers who gave us our own brand of democracy. And yet when someone who personifies that ethos so well dies in the process of adhering to the principle, people decry him as selfish and full of hubris.

True, McCandless is also exemplary of the dark and unattainable side of individualism. McCandless shows us that humans have socialized to the point that we can no longer survive the pinnacle of individualism. The state of nature is no longer hospitable to the civilized man. Perhaps this is the root of the criticisms of McCandless. It is not his own fault that worries people so much, but his exposure of the weakness in all of us. The book picks up on this theme in an aside about another individual who tried, and failed, to live off the land- Carl McCunn. McCunn's experiment with individualism was couched in terms of anthropological self-experimentation. McCunn wanted to see if a civilized man could survive using only the tools of the caveman. McCunn did well for a time, but eventually he died by his own hand, presumably after learning that his desired result was unacheivable.

Ultimately, though, the story of McCandless is one of a person who is distinctly human. He is at once both strong and frail, idealistic and pragmatic. McCandless is not the hero of stark proportions, who acts only according to virtuous principles and triumphs over evil. Nor are any of the rest of us. We lead a murky existence full of relativism, moments of weakness, and, should you view it the way that many seem to, the ultimate failure- death. This, is my theory as to why people react so differently to the stories of McCandless and Aron Ralston. Ralston lived, he cheated death, whereas McCandless committed the ultimate sin against life, he died, pitifully and alone. But the story of McCandless is much more real. We see McCandless in hospital beds, in churches, in ourselves. We see the repugnant reality that is death and, perhaps, just how maddeningly pointless a life-examined can seem when the story ends with death.

Political Natural Selection

The State Board of Education is going to meet in January to debate whether to accept two biology textbooks that espouse the theory of evolution as the basis for the modern scientific understanding of life. Apparently concerns were raised over comments made by former Clemson professor Horace Skipper who criticised the books because "I didn't see where they had the scientific support that I think public schools need in a textbook." Having not read the textbooks, I have decided to comment on this issue only from a general, theoretical perspective.

First, the theory of evolution is not just a theory, as many of its detractors like to point out. If one ascribes to the paradigmatic view of science as illustrated in the classic The Structure of Scientific Revolutions, then one surely must concede that the theory of evolution ushered in a paradigm shift in scientific thought. It did not answer the questions, it framed the debate, rescued science from a series of pitfalls and red herrings, and brought about a new lense through which to look at our world. If one is a pragmatist, in the sense that one believes that truth is that which is proven through experience and results, then it is difficult to look at the relationship between science and technology as it exists today, as it has evolved since the paradigm shift brought about by Darwin's classic theory, and to deny that evolution essentially "works". Scientific research from within the evolutionary paradigm has given us cures for diseases once thought incurable, the cloning of entire organisms, the mapping and understanding of the human genome, the ability to turn stem cells into functioning organs, and the subsequent ability to turn other cells into stem cells.

The truth of the matter is that evolution is not up for debate in the scientific community. The only real topic for debate on evolution is at what level it occurs (e.g. macro-evolution vs. micro-evolution). That our State Board of Education would deny what has proven itself to be the truth to our students is alarming. I can only figure two possible reasons that this debate even exists today, one political and one based on the frailties of human nature.

The political, and largely cynical, view is that the members of the State Board of Education who consider themselves proponents of creationism or "intelligent design" (my favorite oxymoron) are simply pandering to what they perceive as their base, much like the Presidential candidates pander to the far reaches of their "base" in the primaries. This is why we see John McCain speaking at Jerry Falwell's "university", Mitt Romney getting a hunting license, or Hillary Clinton "singing" traditional African-American spirituals. Now we have conservative members of the State Board of Education pandering to what they consider to be their base: uneducated, religious conservatives. If I were one who considered myself a conservative, I would personally be offended that these people truly believe that they can placate me and reserve my support through passing off such rubbish on the already beleaguered South Carolina student.

The only other explanation I can think of for this aberration is one based on the frailties of human nature. This is based on my perception that many religious people think that there is a necessary conflict between evolutionary science and Christian faith. In short, these people are so afraid of going to Hell that they cannot possibly accept that the Bible might not be literally written. This is the frailty of human nature- fear of the unknown. The Bible, particularly as read by many of those on the more conservative side of religion, provides a quick and easy way to eternal bliss. Anything professing to be "knowledge" that may conflict with that path to bliss must be vehemently denied and hidden from the marketplace of ideas. My only answer to these people is that religion is an epistemology of faith. Science is an epistemology of reason. These are two entirely different ways of looking at the world, addressing very different subjects, and each ought to be separate. Just as Jefferson argued for the separation of church and state, I argue for the separation of church and science. When viewed properly, I believe that religion and science can be just as copacetic as apple pie and ice cream.

Ultimately, the dogmatic adherence to religious views when applied to scientific study will produce the same false beliefs that lead us to the "understanding" of spontaneous generation. Similarly, a dogmatic adherence to scientific views when applied outside of their scope will produce the same false beliefs that lead us to Social Darwinism and the Holocaust. We must temper our beliefs and our understandings. To the SC Board of Education I beseech you, please separate science and religion, please temper your views, open your eyes to the world around you- a world of shades of grey and nuanced understanding, not a world of black and white, good and evil.

Cold Mountain

I have never read the book, Cold Mountain. I saw the movie, but I couldn't tell you much about it. But I have been to the top of Cold Mountain- the real Cold Mountain. And it lived up to its name. It was indeed cold, and windy, and foggy, and an alltogether dismal place to be. Perhaps if we had caught better weather, my account would be different, but I have only been there once, and it was as it was.

We started out from a familiar place, the Boy Scout camp where we had ended one of the most difficult trips of our lives, followed by the best beer and piece of cheese I ever had. I blogged about it a year ago. This time was going to be different, though. This time we would start at the Scout camp, about 6 miles closer to the trail that leads to the top of Cold Mountain. See, last year we were so burnt out and pressed for time by the time we reached Deep Gap, where the trail to the top of Cold Mountain splits from the trail down to the Scout camp, we decided that we would have to forego the trip to the summit of Cold Mountain in favor of actually making it to the car before sundown. This year the only goal was to reach the top of the mountain, and we were going to be sure to make it.

We started out a bit late on Friday afternoon. The weather was brisk, yet mild enough to shed all of my outer layers. We lost sunlight just as we approached a small trailside campsite and decided to camp there for the night. It turned out to be a great night, chilly, but certainly bearable. We sat around the campfire for a few hours, cooked my new favorite camp food, chicken quesadillas, and sipped whiskey through the night. I also used the occaision to break out my new toy, my backpacker guitar. Although I'm sure my singing voice sounds more like an animal in pain than the great rock star grit that I hear in my head, everyone seemed to enjoy the diversion.

The next morning was uneventful. Powerbars and coffee for breakfast, then we hit the trail. We made good time considering the trail climbed a couple thousand feet at about a 45 degree angle, and by midday we were at Deep Gap. Deep Gap is a gap between a place called The Narrows and the summit of Cold Mountain. It is relatively open and sparsely populated with oak and birch trees and the occaisional evergreen. At least three trails converge on Deep Gap, making it a relatively highly trafficed area and, at least in a few respects, not the optimal place to camp. More on this later.

After lunch (Wolf brand Chili, definitely worth the weight of an aluminum can if its cold out) we set up camp and headed for the top of the mountain. We had been fortunate enough to pay close attention to the area weather forecast, and knew that a storm was scheduled to roll in on Saturday. Because of this, we decided to set the tents up with the doors facing each other and to string a couple of tarps up over the opening for a cooking space and common area. With the tents pitched and the tarps taut, we headed up the trail toward the top of Cold Mountain. As we set out the clouds began to roll in, the wind picked up, and we knew it was just a matter of time until the storm hit, but we all knew that we had to get to the top of the mountain. It had haunted me for a year and I was not going to get this close again and not make it.

Because water is scarce, we filled our water bottles on the way up from a mudpuddle formed from water dripping off of a rock onto the trail. Not exactly the fountain of youth, but with the help of a trusty filter, it did the trick without setting off a second storm within our intestines. The hike to the top was tough and steep, yet leisurely. Everyone was in good spirits, knowing that we were finally going to the top. The weather worsened gradually as we climbed, but no one seemed to notice.

As we reached the lower section of the peak, above the treeline, the weather became apparent. We came across a couple of ledges that almost certainly would have provided breathtaking views except for the thick clouds that enveloped us at the time and prevented any visibility past about ten feet. All of my instincts told me to turn back, that the weather was going to catch up to us and that the timeframe for the trip down was shrinking. But I was not going to be deterred. I wanted to reach the top, as did everyone else. And finally, we were there, looking at the USGS benchmark that had been placed at the summit in 1934, conveniently labelling the top of the mountain for those too unobservant to realize they were there. By this time the wind was whipping so loud that we could barely hear one another, we had to hold on to our hats for fear that they would be blown into the abyss of the passing clouds. We peered over ledges into nothing but thick, grey clouds.

Yet the heavens were smiling on us. After a few gracious minutes at the top, we decided to head down. The trip down was quick due to the steep incline and just as we emerged from the trail and back into Deep Gap, the rain began to trickle. We made for the tents to get a warm drink and a snack and wait the rain out. But it never stopped. It rained, sleeted, and snowed all night. We sat in our tents eagerly awaiting the end of the rain so that we could emerge, start a fire, and go through the camping ritual we all knew so well. But it never happened. It never stopped raining. We sat there from three in the afternoon until after midnight and the rain continued. Finally we gave up, and settled in for sleep.

We awoke to bitter, bitter cold. We had planned on cooking pancakes and bacon for breakfast, but it was so cold that all we could think of was to get moving. We struck camp quickly, with few words, then hit the trail, back down toward the Scout camp. It would be about twenty minutes into the hike that I began to feel my toes again. I have never hiked that distance with so many clothes on. Snow flurries were flying around our heads nearly the whole time. And it was wonderful.

The point of this post is not to make the trip sound tougher than it really was. Many people have been in much tougher conditions on much higher peaks. My point is merely to tell the world, from the proverbial top of the mountain, how much I love these trips and how, even though it may rain, the wind may whip, visibility may be low, the trip is still worth making.