Hurricane Sandy and Normalcy Bias
On Monday, October 29, Hurricane Sandy slammed into the east coast, wreaking havoc on the Jersey shore and New York City.
Sandy lived up to expectations — and then some. In fact, it set a few records in the “hurricane” category. For example, CNN reports:
When hurricane hunter aircraft measured its central pressure at 940 millibars — 27.76 inches — Monday afternoon, it was the lowest barometric reading ever recorded for an Atlantic storm to make landfall north of Cape Hatteras, North Carolina. The previous record holder was the 1938 “Long Island Express” Hurricane, which dropped as low as 946 millibars.
Sandy’s strength and angle of approach combined to produce a record storm surge of water into New York City. The surge level at Battery Park topped 13.88 feet at 9:24 p.m. Monday, surpassing the 10.02 feet record water level set by Hurricane Donna in 1960.
I watched some of the video footage from Sandy. The devastation is truly incredible.
It was all predicted ahead of time, and evacuation warnings were issued well in advance of the arrival of Hurricane Sandy. New Jersey Governor Chris Christie was especially emphatic in his warnings.
Yet many people stayed put and decided to “ride it out.” Some didn’t want to leave their homes behind. Others thought the storm would be no different than milder hurricanes they’d already experienced.
How hard would it have been to drive inland 50 miles and stay in a hotel on higher ground for a couple days? Not very. I would like to think that this is what I would have done.
But “normalcy bias” is a powerful thing.
What is normalcy bias? It’s a frame of mind that minimizes the possible effects of a disaster. It’s the idea that things will continue more or less as usual. Wikipedia expounds:
It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster. [...] The assumption that is made in the case of normalcy bias is that since a disaster never has occurred then it never will occur. [...] People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.
Some reporters interviewed people who rode out the storm. In the interviews I saw, the people expressed some regret. They wished they had heeded the warnings and evacuated.
Others weren’t so lucky. Some were killed by falling trees that crushed houses and cars. At least one person was electrocuted.
Right now, many people have a strong case of normalcy bias with regard to America’s future. They think that our modern economic system will go on forever — failing to realize that every fiat currency in history has, at some point, collapsed.
Take Rome, for example. When they could no longer afford their military imperialism, they began to clip coins. That means they reduced the precious metal content in each coin so they could create more money. It was the ancient method of inflation.
Today, inflating the money supply is far easier than it was in the days for Rome. No printing is even needed. All it takes is an electronic journal entry to “create” hundreds of millions in new dollars.
This expansion of the money supply will eventually have a very negative effect on Americans. Already the prices of basic necessities are going up while average incomes are declining. Not a good situation.
So what is the lesson here?
First, recognize that normalcy bias is a real problem — even when a severe disaster is forecast and evacuation notices are issued.
Second, recognize that normalcy bias is an even bigger problem when it comes to national economic problems. People tend to underestimate the threat to their well-being, and therefore tend not to prepare.
What things do you need to do to prepare for the year ahead? Now would be a good time to get started.
Don’t be scared. Be prepared.