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Now this is an excellent, rather than merely a good, point--thank you.
Though some people are looking to the government to provide assistance in rebuilding New Orleans so that they can (almost incomprehensibly to me) move back there, others are seeing what happens when you pass the responsibility buck and they are choosing to start over elsewhere. Perhaps one of the tragically learned lessons--by both those who are familiar with and those who are unaware of the idea--is that of moral hazard .
They really got the idea that there are some ways in which we must take individual responsibility for our choices (e.g., don't live in disaster-prone areas, if you can in any way avoid doing so) and work to hold our local/state/federal public servants accountable to whatever functions are properly theirs to perform. This, of course, begs for the discussion about which functions are proper to which level of government. With the death of C.J. Rehnquist (famously a "states' rights" proponent, in the way he understood that), a prominently lively debate on this topic should be ensuing. I only (perhaps Polly-Anna-ishly) hope that the upshot of such conversations--with the participation of classical liberals and libertarians--will bring greater clarity to mainstream public discourse and re-shape both public policy and private response approaches to these matters.
Tierney has written an interesting article that makes several good points. However, I wouldn't call it "excellent". Was it really necessary to say that "the federal government should repair the damage and pay for a new flood-control system." That's probably how it will work out but I would hope that it wouldn't be the starting point for the discussion. Do we really want to see the government spend other people's money to encourage people to live in such locations in the future? All too often self-identified libertarians and classical liberals and small-government types concede too much. And then they wonder why the State keeps growing. If you really think the federal government owes the residents of New Orleans compensation (at whose expense?), it would be better if it gave cash handouts to them and let them decide where they will live. That, of course, requires you to argue why other people should be forced to compensate them. Let the debate begin!