How your tax dollars are spent to protect the wealthy

From Climate Central:

How Rising Seas Drowned the Flood Insurance Program

Long Beach Island is the largest and richest barrier island in New Jersey, an oasis of sprawling oceanfront retreats and second homes located midway down the state’s heavily developed coast, a two-hour drive from the metropolitan centers of New York City and Philadelphia. On a clear day, visitors in the southern end can see the shiny facades of the Atlantic City casinos rising like obelisks across Great Bay. In the north, historic Barnegat Lighthouse towers over an unruly inlet steadied by boulders stretching into the Atlantic Ocean. In many places, the long, slender island is barely a few feet above sea level. And like most of New Jersey’s coast, it has been eroding for decades, leaving it vulnerable to flooding and rising seas.

Recently, the U.S. Army Corps of Engineers pumped more than ten million cubic yards of sand from offshore dredges to widen Long Beach Island’s beaches and dunes – part of a Sisyphean-like effort to protect the island’s $15 billion of high-calorie real estate. But there is a problem. The sand keeps washing away. A series of storms over the last two years gouged the neatly groomed beaches, costing tens of millions in additional repairs. When all is said and done, the project will cost more than half a billion dollars, most of the money paid by U.S. taxpayers.

Like other barrier islands up and down the Atlantic and Gulf coasts, Long Beach Island is drowning in slow motion. Over the last century, researchers estimate that the ocean and bays that flank the island have risen by about a foot. That doesn’t sound like much, but the added water has made a huge difference in life on the island. Barnegat Bay now routinely washes over the bulkheads and floods the streets. Occasionally, school buses have to wait for the water to recede to pick up or drop off children. Even more worrisome, the rising water makes it easier for storm surge and waves to do more damage in violent storms such as Hurricane Sandy, which wrecked Long Beach Island and the back-bay communities in Ocean County in October of 2012.

Dave Rinear’s small bungalow on Cedar Bonnet Island – a smudge mark of sand and sedge located just behind Long Beach Island – had the misfortune of facing a vast, open fetch of Barnegat Bay. Surges from Sandy lifted a 24-foot speedboat named Plan B from its winter mooring and launched it into Rinear’s cedar shake cottage, blowing out a wall and washing away most of the contents, including 50 years worth of prized fishing journals. “Talk about laser-guided misfortune,” the 72-year-old retired professor moaned. “That thing came up the bay like a laser-guided missile with my name on it.”

Rinear’s bungalow was totaled. But he filed a claim with the National Flood Insurance Program (NFIP) and received enough to help him rebuild a larger new house on the same footprint. In all, the federal flood program paid out $8 billion in Sandy-related claims. More than $2 billion went to property owners in Ocean County, including $200 million on Long Beach Island. That was nearly twentyfold what island property owners had collected in the prior 35 years of the program.

Today, the NFIP is effectively bankrupt. It owes the U.S. Treasury nearly $25 billion – money it borrowed from federal taxpayers to cover its obligations in Sandy, Katrina (2005), and Hurricane Ike (2008). No one expects that money to be repaid. Some coastal state lawmakers are even calling for Congress to write off the massive debt, contending it is the only way the troubled insurance program, which is up for reauthorization this year, can regain its financial footing.

Wiping away the debt will help. But it is only a matter of time until the next big storm drains the coffers again. Even relatively weak hurricanes cause hundreds of millions in damage, while monster storms like Katrina and Sandy cause billions. Complicating matters, the NFIP has improbably subsidized thousands of risky properties along the coast – low-lying houses that flood over and over – by charging them below-market premiums to entice them to join the program.

It wasn’t supposed to be like this. The government got into the flood insurance business reluctantly, and only after private insurers fled the market because it was too risky and unpredictable. When Congress finally passed the NFIP in 1968, it was intended in part to steer development away from vulnerable floodplains. However, many coastal communities ignored the restrictions and filled the nation’s barrier islands and back bays with property. The value of land and property on the New Jersey coast soared from less than $1 billion in 1960 to over $170 billion today. Most of that property is located in what NFIP officials call Special Flood Hazard Areas, low-lying places likely to flood and suffer extreme damage in catastrophic storms.

Today, at least $3 trillion worth of property lines the Atlantic and Gulf coasts. Much of it is insured by the NFIP, including approximately one million second homes and investment properties. Rising sea levels will make it easier for future storms and waves to damage those houses by elevating the angle of attack. “Think of it this way,” says Kopp, “if the flood level is five feet and you add a foot of sea level, then the new flood level is six feet. That elevates the platform (for surge and waves). It’s that simple.”

A 2016 Rutgers study found that seas near New Jersey could rise between 1 and 1.8 feet by the middle of this century under a scenario of low carbon emissions. But under a high emissions scenario, seas could swell as high as 4.5 feet by 2100. Recently, a National Oceanic and Atmospheric Administration study estimated mean global sea levels could rise as high as 8 feet by the end of the century.

Several more feet of water would be devastating, swallowing vast swaths of real estate, according to several studies. A June 2014 report called Risky Business, prepared by a group co-chaired by former New York City Mayor Michael Bloomberg, estimated that between $66 billion and $160 billion worth of U.S. real estate could be below sea level by 2050 – and up to half-a-trillion by the end of this century.

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22 Responses to How your tax dollars are spent to protect the wealthy

  1. grim says:

    From the WSJ:

    Credit Scores Hit Record High as Recession Wounds Heal

    Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low—a potential boon for lending and economic activity.

    Consumers’ improving fortunes reflect falling unemployment and continued, if lackluster, economic growth. An added benefit: The passage of time since the recession and housing meltdown is helping household balance sheets.

    In ever-growing numbers, the worst personal financial setbacks, namely foreclosures and bankruptcies, are falling off Americans’ credit reports. More than six million U.S. adults will have personal bankruptcies disappear over the next five years, according to a recent Barclays PLC report.

    Wiping away such negative events also helps boost consumers’ credit scores. Lenders rely on both the reports and scores when determining whether to approve consumers for loans and at what interest rates.

    “Higher scores lead to more available credit,” said Cris deRitis, senior director in the economics group at Moody’s Analytics. “We’d see more activity in terms of loan approvals and credit-card approvals, more spending and that would have a ripple effect across the economy, increasing aggregate demand for goods and services.”

    The average credit score nationwide hit 700 in April, up one point from last fall, according to new data from Fair Isaac Corp. That is the highest since at least 2005. That was the year Fair Isaac, the creator of widely used FICO credit scores that range from 300 to 850, began tracking the data.

    Meanwhile, the share of consumers deemed to be riskiest, with a score below 600, hit a new low of roughly 40 million, or 20% of U.S. adults who have FICO scores, according to Fair Isaac. That is down from 20.5% in October and a peak of 25.5% in 2010.

  2. grim says:

    From USA Today:

    Bank forecloses on ‘Extreme Makeover’ homeowner

    Nearly nine years after her home was rebuilt on national television, Arlene Nickless must turn in her keys.

    Designers with ABC’s Extreme Makeover: Home Edition — with the help of hundreds of volunteers — built her family’s home in 2008 following the death of Tim Nickless, her husband of 18 years. But Arlene Nickless has been struggling to manage the mortgage for years and must leave by Monday.

    The home was foreclosed on in September and has been up for auction online for weeks.

    This past Sunday, cardboard boxes were stacked on the dark hardwood floors once showcased in nationwide broadcasts. The 2009 Ford Flex given with the home sat in the driveway hooked to a moving trailer.

    Arlene Nickless is quick to defend the ABC show, whose lavish rebuilds have in some cases led to foreclosure because of increased property taxes and pricey utilities. She’s less complimentary of her mortgage servicer that state regulators now are targeting.

    Her home’s foreclosure resulted from an ongoing struggle to manage the property’s pre-makeover mortgage — a balance that rested at about $30,000 after the 2008 makeover, but had ballooned to at least $113,000 by the end of 2016, she said.

  3. Ottoman says:

    Gurl bye. You’re at least 10 years behind on that prediction. Ever since Hudson exploded and the wannabes reluctantly drove across the bridge and into the western hinterlands for a piece of the upstate scene, the Catskills have been on the radar. $1-3 million dollar stone cottages abound in Ulster County. Kingston, which was a veritable slum despite its stunning architecture and amazing river access, has been mostly transformed, if not yet completely filled out with hipster restaurants and retail-but they’re getting there. And every few weeks, nesting gays and designer biddies transcend on the “quaint hamlet” of High Falls, set in the very shadow of Mohonk Mountain House, to rub cheek-to-jowl with the biker set at weekender barn sales, replete with cocktails and gossip. When you can walk down the street and buy the same garbage you see accenting homes in photo shoots from the Hamptons at an interior design store simply called “Fred”, its over.

    grim says:
    May 27, 2017 at 6:36 am
    Going to make a prediction, I’m in the predicting mood this morning.

    The Borsch Belt and Catskills will be hot again.

    Hipsters with kids and trailers and Pabst.

    Go Long.

  4. Ottoman says:

    My comment is awaiting moderation? But the only naughty word I used was “grim”.

  5. The Original NJ ExPat says:

    Don’t forget Carling Black Label and Genesee Cream Ale.

    Hipsters with kids and trailers and Pabst.

  6. No One says:

    Why is government subsidizing the insurance, maintenance and rebuilding of fancy homes in places that are known to be risky? Nanny state, this time mostly for the wealthy.

  7. Blue Ribbon Teacher says:

    My cousin was part of a crew working on one of those extreme makeover homes. He said the deadlines they had to meet were ridiculous. He was putting up drywall with no roof and rain pooring into the house. He also said that the things they were supposed to let dry over a few days were put in and they brought fans in to dry everything out quickly. He said the homes would be filled with mold within a year and falling apart within 5.

  8. leftwing says:

    “Don’t forget Carling Black Label and Genesee Cream Ale.”

    Genny has a pilot batch IPA. Had some over the weekend. Nailing both ends of the hip barbell lol with the 100+ yo crappy cream ale and the ltd edition IPA.

  9. D-FENS says:

    Meanwhile…”less affluent” residents of midway beach created their own dunes and suffered little to no damage during superstorm sandy.

  10. D-FENS says:

    SOUTH SEASIDE PARK, NEW JERSEYA dune in the right place at the right time is a very powerful thing. More than just hills of sand, dunes can be a beach town’s first line of defense against storms and erosion. That’s why some coastal communities are encouraging their growth.

    When Superstorm Sandy hit the Jersey Shore in October 2012, the ocean surged onto land on the strength of winds blowing at up to 89 miles (143 kilometers) per hour. Some towns had no barriers between the ocean and their homes, businesses, and boardwalks. But those that did—those that had dunes—well, just look at Midway Beach.

    (Related article: “After Sandy: The Future of Boardwalks.”)

    At first glance, it doesn’t seem like the kind of town that could have survived such a powerful storm. It’s a quarter-mile-long community within South Seaside Park, New Jersey, made up almost entirely of post-World War II, one-story bungalows. To its north, Sandy knocked a roller coaster into the ocean. To its south, ocean water crossed over the barrier island and into Barnegat Bay.

    But only one home in Midway Beach saw any water damage.

    One big reason for that—or, rather, one tall reason: Midway is protected by 25-foot-high (7.6-meter-high) dunes that the community started passively building 30 years ago.

    The project started as a way to prevent an annual annoyance, explains Dominick Solazzo, a trustee on the Midway Beach Condominium Association’s board of directors.

    Without fencing, the sand would blow into their community, so why not try to keep it on the beach?

    “The thought was: ‘Let’s put in storm fences so we don’t have to backhoe the sand every spring,” says Solazzo. A union electrician, he has a B.S. in natural resource management from Rutgers University and lives in Midway year-round.

    That first fence was installed in the 1980s, and the dunes grew from there. For the last five years, Solazzo has led a resident-driven, volunteer effort to more actively manage the dune growth, a project that Stewart Farrell, director of the Richard Stockton Coastal Research Center, calls “the most dynamic ‘bootstrap’ dune project on the coast.”

  11. Phoenix says:

    Why do we have Federal flood insurance anyway? I thought everybody wants things privatized. Why don’t we start with that.

  12. Fast Eddie says:


    I always wondered how South Seaside Park got spared. Incredible story!

  13. D-FENS says:

    Goldman Sachs doing the lords work in Venezuela

  14. D-FENS says:

    Warm up the bulldozers?

    Governor Christie: No Capital City In Our Country Has Greater History Than The City Of Trenton

    ” A well designed demolition program can have a positive impact on surrounding property values and improved safety. So today, I am announcing an urban blight reduction pilot program that will demolish about 500 vacant, abandoned and blighted properties in the city, in an effort to increase public safety and spur positive redevelopment. It is unacceptable to me that our capitol city is not the most shining city in our state. It’s unacceptable to me that when I travel to other parts of the nation and go to their capital cities that there is a greater sense of pride and accomplishment in those cities than there is here in the City of Trenton.”

  15. chicagofinance says:



    Where College Seniors Are Falling Short
    Expected graduates are ill-prepared for the job hunt and many coveted positions, a survey finds

    By Kelsey Gee

    April 25, 2017 7:00 a.m. ET

    Parents rejoice: 2017 is shaping up to be another healthy year for college hiring.
    The latest forecast from the National Association of Colleges and Employers finds that employers expect to hire 5% more graduates than they brought on last year, the eighth year in a row that companies say they are increasing their college hires.
    Yet a separate survey of employers and college seniors suggests that, when it comes to courting recruiters, the Class of 2017 has some homework to do.
    This year’s job-seeking seniors are ill-prepared for the job hunt and many coveted positions, concludes a survey of roughly 400 employers and 400 college students conducted by iCIMS Inc., a recruiting-software company. Among other things, employers reported that one-third of all applications for entry-level roles come from unqualified candidates.
    More than 60% of employers in the survey said applicants ought to be more familiar with the company and industry, and must ask better questions in interviews. Plus, those employers say, three out of four applicants fail to send thank-you notes after interviews.

    The mismatch extends to hard skills, too. Engineering, business and computer science majors are in highest demand, with at least two-thirds of employers seeking graduates in those fields, according to NACE. But fewer than half of the students surveyed by iCIMS majored in those subjects.

    College seniors feel good about their prospects: more than 90% of the students surveyed by iCIMS reported feeling confident about their interview skills. They also expect to earn over $53,000 in their first job, compared with average salary
    While new grads have a “bloated” sense of their abilities, employers too have unrealistically high expectations for 21-year-olds, said Susan Vitale, chief marketing officer for the Matawan, N.J.-based iCIMS. “Hiring managers tend to be a little crazy in their experience requirements, speaking as one myself.”
    Unlike many employers, Enterprise Holdings Inc. doesn’t expect college hires to arrive at work with all the exact skills they need.
    The car-rental company will hire roughly 10,000 college grads for its entry-level management training program this year. Those management trainees will be put on a two-year career-development program, where they will learn on the job, said Marie Artim, the car-rental firm’s head of talent acquisition.
    “This is a generation that’s grown up with syllabuses and structure,” which makes them a good fit for such programs, Ms. Artim said.

  16. chicagofinance says:

    Wrong article…..sorry….

  17. chicagofinance says:

    A good example of how minimum wage rules are stupid on their face…..


    Going Out for Lunch Is a Dying Tradition
    Restaurants suffer as people eat at their desks; no more three-martini sit-down meals

    By Julie Jargon
    The U.S. restaurant industry is in a funk. Blame it on lunch.
    Americans made 433 million fewer trips to restaurants at lunchtime last year, resulting in roughly $3.2 billion in lost business for restaurants, according to market-research firm NPD Group Inc. It was the lowest level of lunch traffic in at least four decades.
    While that loss in traffic is a 2% decline from 2015, it is a significant one-year drop for an industry that has traditionally relied on lunch and has had little or no growth for a decade.
    “I put [restaurant] lunch right up there with fax machines and pay phones,” said Jim Parks, a 55-year-old sales director who used to dine out for lunch nearly every day but found in recent years that he no longer had room for it in his schedule.
    Like Mr. Parks, many U.S. workers now see stealing away for an hour at the neighborhood diner in the middle of the day as a luxury. Even the classic “power lunch” is falling out of favor among power brokers.
    When he isn’t on the road for a Detroit-based building products company, Mr. Parks works from his home in Carlisle, Ohio, and eats there. When he meets clients at their offices, they have food delivered and work during what they call a “lunch and learn.”
    Even some restaurant-company executives don’t go out for lunch. Employees at Texas Roadhouse Inc.’s Louisville, Ky., headquarters order in so often that they know the delivery drivers by name. “A lot of our folks are trying to be more efficient,” company President Scott Colosi said.

    Cost is another factor working against eating out for lunch. While restaurants have raised their tabs over the past few years to cope with rising labor costs, the price of food at supermarkets has continued to drop, widening the cost gap between bringing in lunch and eating out.
    Restaurants are adapting by offering delivery, faster service and smaller portions. But the shift signals trouble for the industry, which makes more money serving meals inside restaurants, where soft drinks, alcoholic beverages, appetizers and desserts boost margins. Maintaining nearly empty dining rooms is costly.
    Among the hardest hit are casual sit-down restaurants—such as Dine Equity Inc.’s Applebee’s and Ruby Tuesday Inc. —because of the time it takes to order, get served and pay. Such establishments last year saw their steepest ever decline in lunch traffic, according to NPD.

    Even fast-casual chains that cater more to harried customers with counter service instead of wait staff are experiencing slower growth. Lunchtime traffic at those restaurants—excluding Chipotle Mexican Grill Inc., which has suffered steep declines in the wake of disease outbreaks—grew 2% last year after posting growth of 5% or higher in each of the prior four years.
    The pain is spreading to suppliers. Meat giant Tyson Foods Inc. recently said a 29% drop in quarterly earnings was due partly to the decline in restaurant traffic.
    “Consumers are buying fresh foods, from supermarkets, and eating them at home as a replacement for eating out,” Tyson Chief Executive Tom Hayes said.
    The average price of a restaurant lunch has risen 19.5% to $7.59 since the recession, as rising labor costs pushed owners to raise menu prices—even as the cost of raw ingredients has fallen. According to the Bureau of Labor Statistics, the U.S. last year posted the longest stretch of falling grocery prices in more than 50 years.
    “We believe significant food deflation was the primary culprit behind last year’s weakness, favoring food at home pricing over food away from home pricing to a degree not seen outside of the global financial crisis,” Sanford Bernstein analyst Sara Senatore said in a recent report on the restaurant industry.

    More fundamental shifts in consumer behavior also are at play. The share of people doing at least some of their work at home—and who are unlikely to go out and eat—has fluctuated over the years, but was as low as 19% in 2003 and reached a high of 24% in 2015, according to the BLS. And the continued rise of online shopping means fewer trips to the mall—or a stop for a restaurant lunch there.

    Despite the traffic decline, dollar sales at lunch were flat last year because of the menu price increases. But restaurants can’t raise prices indefinitely. In fact, many now are offering lunch discounts to bring people out to eat.
    Some lunch specials at casual-dining restaurants cost less than a fast-food meal. Lunch can be had for $6 at Brinker International Inc.’s Chili’s Grill & Bar, and for as low as $6.99 at Darden Restaurants Inc.’s Olive Garden.

    Brazilian steakhouse Fogo de Chão Inc.—where lunch can take two hours and cost up to $34—last year introduced a $15 lunch special of salads, soups, cured meats and stews that can be completed in under an hour.

    After it saw lunch traffic “fall off” in late 2015, sports-bar chain Buffalo Wild Wings Inc. introduced a cheaper “fast break lunch” menu with smaller portions. Chief Executive Sally Smith said the new menu—and a 15-minute service guarantee—recently helped improve traffic.

    Many restaurants are restructuring. Cosi Inc., Garden Fresh Corp. and Old Country Buffet owner Buffets Inc. recently have filed for chapter 11 bankruptcy protection. Others, like Ruby Tuesday and Famous Dave’s of America Inc. have been closing restaurants.

    Bob Evans Farms Inc. in January sold its struggling restaurant business to private-equity firm Golden Gate Capital. On the same day, Bob Evans announced that its packaged-foods arm was acquiring a potato-processing company in an effort to focus on growing demand for refrigerated side dishes.

    Josh Benn, managing director at corporate-finance advisory firm Duff & Phelps Corp., said new restaurant concepts, such as those that cater to consumers’ desire for faster, healthier food, are on the rise.
    “I think there’s a death and regeneration happening in this whole industry,” Mr. Benn said.

  18. Long Live Pumpkin Free says:

    For those eggheads with time. 1 hour 20 mins.

    Important time areas 12:50, 23:00, 30:30, 34:00, 38:00, 48:00, 53:00, 56:00 (Ayn Rand), 57:00, 1:09, 1:14 (PC related), 1:18 (the rise of Putin)

  19. The Original NJ ExPat says:

    leftwing – Interesting. My first case of Genny Cream Ale was at Watkins Glen, prior to 1980. For $5 a case I thought it was great! Of course, we were up at an IMSA 6 hours of endurance race in a borrowed VW microbus with no supervision. Good time, Good times. Later that same year, probably 1980 we were up there again for a Formula 1 Race (that’s right, there used to be actual F1 races on the US East Coast) and I was taken slightly aback at how snooty the crowd was and how the access was seriously restricted to different parts of the track. We saw Richie Havens play to a group of about 50 (Freedom!, Freedom!). Good times, good times.

    Genny has a pilot batch IPA. Had some over the weekend. Nailing both ends of the hip barbell lol with the 100+ yo crappy cream ale and the ltd edition IPA.

  20. The Original NJ ExPat says:

    My take is that we experienced peak US college grad preparedness somewhere around 1990. Since then the universities have been releasing lesser and lesser beings into the professional wild. I’m not complaining, these iron-clad retardos are no challenge whatsover to 40-60-year-olds, as far as I can tell.

  21. The Original NJ ExPat says:

    I remember when guys used to “borrow” a couple Cisco routers, bring them home and use their night to teach themselves IOS (the Cisco one) and set up a WAN or firewall. Imagine some 20-something doing that today. It would never happen. They would be, “Wah, wah, wah! Nobody every trained me on that!”

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