"Katrina is an especially poignant study in risk because the catastrophe was so widely foreseen,' observes Forbes. The weather event itself was not just foreseen, it had for some time been considered a 'once-in-200-years' event. Now, businesses view a 1-in-200-year event as having a1-in-3 likelihood of occuring in the average 77-year lifespan, and invested accordingly. Elected officials on the other hand saw a 1-in-200-year event as a1/50 chance of occurring in a four-year political term, and accordingly they failed to invest, with the consequences we all saw.
“This is a case where they did an exceptionally good job on the natural science and a really poor job on the social science,” says a commentator. But from the point of view of the elected officials, they were acting rationally. Read Forbes discusion on the risk management of disasters here. [Hat tip NBR blog]
And big ups to the Home Depot people: notes Forbes:
A day after the storm, all but ten of the company’s 33 stores in Katrina’s impact zone were open. Within a week, it was down to just four closed stores (of nine total) in metropolitan New Orleans. “We always take tremendous pride in being able to be among the first responders,” says Home Depot CEO Bob Nardelli [in photo right with GWB].Now there's a case study that some of those elected officials and their cronies could learn from.