Brian Albrehct on the California Wildfires
Our friend Brian Albrecht brings mere economic analysis to bear on the California fires tragedy.
California is burning. The tragedy of the destruction is unfathomable.
— Brian Albrecht (@BrianCAlbrecht) January 10, 2025
On top of that, many homes don’t have insurance. Why?
This is because of price controls. But CA's Prop 103 system goes way beyond normal insurance price controls into total dysfunction 🧵
It's not that California is inherently uninsurable.
John Stuart Mill famously observed that:
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...what has so often excited wonder, the great rapidity with which countries recover from a state of devastation; the disappearance, in a short time, of all traces of the mischiefs done by earthquakes, floods, hurricanes, and the ravages of war. An enemy lays waste a country by fire and sword, and destroys or carries away nearly all the moveable wealth existing in it: all the inhabitants are ruined, and yet in a few years after, everything is much as it was before.
Prices can adjust to make recovery from the California wildfires worthwhile–unless those prices are blocked by public policy.