Sunday, February 27, 2011

In case you needed an economic insentive to help others

Reading about the recent earthquake in New Zealand, I was struck by how much better the community was recovering than Haiti did. Haiti's quake was larger (7.0 to 6.3, I believe) but Christchurch was still recovering from another major quake back in September.

Estimated clean-up in New Zealand, cumulative, is $15 billion (converted to US dollars). No one's sure what clean-up in Haiti will cost. It sounds like numbers of comparable scale are being thrown around, but given how much more infrastructure New Zealand has to repair, versus Haiti where most of that money is being spent on food, medicine, and shelter, those numbers should not be in the same ballpark.

Then you compare the deaths. Current count in New Zealand is approaching 200. The death toll in Haiti is more than 1,000 times that.

Visitors to Haiti say it still looks as if the quake happened yesterday. Christchurch was featured on the news, focusing on the happy, upbeat spirit people are maintaining.

I can't help but wonder, what would $15 billion in Haiti have done before the quake? Could it have improved infrastructure enough to reduce the body count? What if there were a few more hospitals, better roads, or emergency response teams? Heck, we're not even looking at the benefit of something as "frivolous" as education.

Or maybe you're not motivated by the damage to the country. What about the economic cost of those deaths? Those are people that, with better support from the US, could have been buying Nikes and iPods and Big Macs; how much have we lost because we allowed such a large consumer demographic to get killed?

Cynical, maybe. But I'm sure there are people doing those types of calculations somewhere in our government. At least, I hope there are. There should be. We look at the cost of things now, like schools and hospitals and scientific research, and decide not to pay for them without considering the future losses incurred by not having them. Maybe that would make a more convincing sound byte: "It's not $100,000 spent on schools; it's an investment in GM's future stock!"

As another reference point, Katrina cost the US an estimated $110 billion, and had death toll of nearly 2,000. That's a lot more than it would have cost to repair a couple levees.

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