Charlie's new wind


Published: Sunday, January 14, 2007 at 6:01 a.m.
Last Modified: Sunday, January 14, 2007 at 12:15 a.m.
Quick, what do Charlie Crist and Hugo Chavez have in common?
One word: Socialism.
''We're moving toward a socialist republic of Venezuela ... and nothing and no one can prevent it,'' President Chavez said last week, in preparing to nationalize the country's power and telecom industries.
"There truly is a new wind blowing here. The powerless have now become the powerful," Gov. Crist said the other day in preparing to nationalize (though I suppose you'd have to call it it "stateize") the insurance industry.
They won't call it socialism in Tallahassee this week, when the Republican Governor and Republican Legislature meet to "solve" Florida's insurance crisis. But politicians have figured out that the only way they can cut property insurance rates and keep Florida's mighty growth machine rolling along is to put the state even deeper into the risk-absorbing business than it already is.
Among the proposals: Slash premiums for the state-created Citizens Property Insurance Corp. (aka the insurer of "last resort") while allowing Citizens to compete with private companies by selling other kinds of insurance, like fire and theft. And make it cheaper for private companies to get reinsurance from ... you guessed it ... the state's Catastrophe (aka CAT) Fund.
Now here's the thing. Citizens is already running a $1.7 billion deficit from previous hurricane payouts.
And the CAT Fund's deficit is about $1.4 billion. And if you're not going to crank up premiums to keep those funds solvent, there's only one other way to do it. Tax dollars.
"The old saying 'there is no free lunch' is most applicable here," Jeff Grady, president of the Florida Association of Insurance Agents said in a release this week.
Grady worries that some of the other "solutions" being floated - cracking down on insurance companies' "excess profits," or forcing them to write property coverage if they want to sell other types of policies in the Sunshine State - will only have the effect of chasing private insurers out of a state whose frequent hurricanes already make it very difficult to do business here.
"Some understandably frustrated insurance buyers and public officials may view this development with the old adage "good riddance!" Grady said. "In doing so, they inherently advocate that state government become the primary property insurer in Florida, a recipe that concentrates our risks and provides greater certainty that taxpayers will fund future hurricane losses."
So what's wrong with "stateizing" property insurance? Three words: Federal flood insurance.
That D.C. boondoggle's major claim to fame is that it's made it possible for people to live cheaply (thanks to liberal taxpayer subsidies) in areas where they shouldn't be living at all; which is to say in areas that are prone to flooding.
Spreading the hurricane damage risk among all taxpayers will likewise make it possible for Florida's coastal construction boom to continue booming.
People who can't afford to live on the beach will help bail out the people who can afford it. (And don't worry about coastal erosion swallowing up all those pricey condos, our tax dollars also pay for beach renourishment.") A hurricane produces a very big wind indeed, but, Gov. Crist promises a "new wind blowing" out of Tallahassee that will make coastal living as close to risk-free as we taxpayers can possibly make it.
Look, at Florida's current rate of growth, the state's population is projected to more than double, to 36 million people, by 2060.
We're never going to pull that ambitious goal off if, every time a hurricane blows through, "greedy" insurance companies jack up rates simply because living in some parts of Florida happens to be a risky business.
So if Tallahassee-style socialism is the only thing that will keep Florida growing in the face of hurricane-force winds, then so be it.
After all, we can't very well expect folks to pay the full costs of developing and living just about anywhere they please on this exceeding low peninsula that happens to jut so precariously out into the middle of Hurricane Alley.
Why, the next thing you know, we might be forced to actually "manage" growth in Florida. Socialism's better.
Ron Cunningham is editorial page editor of The Sun. His e-mail address is voice@gvillesun.com.

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