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PrintJanuary 18, 2011
A tale of two earthquakes
For almost 200 hundred years the fault line under Haiti was still. Then, without warning, on January 12, last year, it shifted. On the Richter scale it was a 7.0 -- two thousand Hiroshima bomb blast. Buildings collapsed, shorelines sank, and 500,000 children became orphans. Almost a quarter of a million Haitians died and though it lasted a brief three minutes the government disappeared almost faster. The frail infrastructure (Port au Prince had two first aid squads) ceased to function.
Not to worry. The world rallied. Ex-Presidents stormed the beaches. Celebrities sang. Doe eyed children appeared on our air waves. One year later, only one-fifth of the estimated five billion dollars raised has been distributed. Bill Clinton has said, "We are doing better all the time," while the tents and tempers fray, and another election has been declared null and void by the OAS. And speaking of Ex-Presidents, "Baby Doc" Duvalier is back in town. Mothers hide you daughters!
On February 27, 2010, another quake hit farther south, in Chile. This one, 8.8 on the Richter, was 500 times more powerful than the Haiti quake. It was as if one million Hiroshima bombs went off. The earth's axis wobbled. The city of Concepcion moved 10 feet west!
To date fewer than 400 Chilean fatalities have been reported. And, Chile will not be hitting up the world community for much aid. You see, Chile is in good shape financially. It currently has South America's highest income and savings per capita.
According to Wall Street Journal reporter, Burt Stephens, the biggest difference? Milton Friedman and "his boys."
It seems that when General Augusto Pinochet led a bloody coup toppling the elected President and darling of the left, Salvador Allende, he inherited an economy in shambles: high unemployment, inflation (1,000%), over-regulation by a leftist government bent on "spreading the wealth around". The military junta had also inherited something else...a Chicago connection.
It seems that Chilean Catholic University had sent many of its economists to study with the renowned monetary economist and Nobel Laureate, Milton Friedman.
The junta asked Friedman to submit a plan for Chile's economic recovery. He did so, and the suggestions were harsh and simple: cut the size of government, encourage the market with low taxes, root out corruption in the banking system, privatize public services, attract foreign investment, divest government controlled businesses, create a reserve fund tied to the revenue from the country's vast copper reserves.
Friedman is gone but his "boys" have been more or less running the economy these last 30 years. Stability, investment, and savings, mark the Chilean "miracle." Even their Social Security System is in the black, it being based upon sound capitalistic principles of choice and conservative investment.
Which brings us back to the two quakes. Perhaps after the jet set has decamped, someone in Haiti of influence might ask the Chileans how to craft a society in which the people are well served and free.
A large consignment of Capitalism and Freedom, in Creole, might be the best form of aid we can give that suffering land.
