As a U.S. senator, Barack Obama co-sponsored the “Homeowners Defense Act,” derided as a “Beach House Bailout,” because it helps put a government backstop behind hurricane insurance. In 2008, Democrats explicitly endorsed a similar beach house bailout in their platform:
We will develop a National Catastrophic Insurance Fund to offer an affordable insurance mechanism for high-risk catastrophes that no single private insurer can cover by itself for fear of bankruptcy. This will allow states and territories to deal comprehensively with the economic dislocation of natural disasters.
Not only did Democrats not fulfill this unwise promise, but they’ve dropped it from their platform this year, notes R.J. Lehmann of the R Street Institute, a pro-free-market insurance-policy organization. Lehmann, in an R Street press release, applauded Democrats for moving away from the policy, which he says, “would displace private insurance markets, put taxpayers on the hook for potentially enormous losses and subsidize further development of already fragile coastal ecosystems.”
This reminds me of something I’ve seen plenty of times: environmental groups often can be allies of free-market groups when the policy in question is a subsidy that harms the environment.