What would YOU do if your mother asked YOU?

Tag: What would YOU do if your mother asked YOU?

The Great Portland Flush

In our continuing series of thorny policy issues, here’s one from the great northwest.  The city of Portland flushed millions of gallons of treated drinking water because a man urinated in it.  Does that seem reasonable? Or is it a wee bit crazy?

Here’s the abbreviated story from the NYT.

Portland is disposing of eight million gallons of drinking water because a man was caught on camera urinating in a reservoir. Water from the city’s five open-air reservoirs goes directly to customers. A city official said he did not want to serve water with urine in it.

Critics call that an overreaction, saying animals routinely defecate and urinate in the reservoirs and sometimes die in them. Health officials say that urine is sterile in healthy people and that the urine was so diluted it posed little health risk.

Officials say it will cost the system’s customers less than $8,000 to treat it as sewage. The 21-year-old man caught on camera has not been charged.

I will spend the next year trying to figure out how to make this into a final exam question.

Moral (Among Other) Hazards

Continuing on with our Halloween theme, here’s an old story just posted at Marginal Revolution that  illustrates the basic problems of moral hazard.

L.W. Burdeshaw, an insurance agent in Chipley, told the St. Petersburg Times in 1982 that his list of policyholders included the following: a man who sawed off his left hand at work, a man who shot off his foot while protecting chickens, a man who lost his hand while trying to shoot a hawk, a man who somehow lost two limbs in an accident involving a rifle and a tractor, and a man who bought a policy and then, less than 12 hours later, shot off his foot while aiming at a squirrel.

“There was another man who took out insurance with 28 or 38 companies,” said Murray Armstrong, an insurance official for Liberty National. “He was a farmer and ordinarily drove around the farm in his stick shift pickup. This day – the day of the accident – he drove his wife’s automatic transmission car and he lost his left foot. If he’d been driving his pickup, he’d have had to use that foot for the clutch. He also had a tourniquet in his pocket. We asked why he had it and he said, ‘Snakes. In case of snake bite.’ He’d taken out so much insurance he was paying premiums that cost more than his income. He wasn’t poor, either. Middle class. He collected more than $1-million from all the companies. It was hard to make a jury believe a man would shoot off his foot.”

It’s not often that I come across source material like this that I will use every single time a topic comes up in class.  I tested it out on Econ 300 today and I daresay the image is a lasting one.

A Very Hot Topic

I'm an ordinary guy...

If you don’t make your car payment, can you reasonably expect to drive off the lot with a car?  If you don’t pay your doctor, can you reasonably expect him to take care of you next time you are sick?  If you don’t pay your $75 for fire protection, will the fire department really stand by and watch while your house burns to the ground?

Well, that’s only approximately what happened in Tennessee this past week.

From the story:

A local neighborhood is furious after firefighters watched as an Obion County, Tennessee, home burned to the ground.

The homeowner, Gene Cranick, said he offered to pay whatever it would take for firefighters to put out the flames, but was told it was too late.  They wouldn’t do anything to stop his house from burning.

Each year, Obion County residents must pay $75 if they want fire protection from the city of South Fulton.  But the Cranicks did not pay.

Remarkable.

I have yet to talk to anyone who didn’t find this an engaging question. Where does an ordinary guy draw the line?

For those of you without anyone to talk to, these links provide about three hundred sixty five degrees of background and commentary.