The 'FEMA economy' created incentive-incompatible outcomes: extending unemployment compensation for longer periods paid people not to return to work, so officials were then puzzled that people weren't coming back—an instance of the classic conflict between good economics and good politics (concentrated benefits, dispersed costs).

causalpending

Speaker

Peter Boettke

Evidence Quote

it's incentive incompatible if you get paid to not work then you're not going to work and the FEMA economy has generated a lot of these kind of difficulties

Source

Peter Boettke on Hurricane Katrina and the Economics of Disaster 12/18/2006EconTalk
Created: 6/17/2026, 10:29:22 AM

My Notes

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