Really Smart Growth

Today's WSJ included a special section on "The Top Ten Trends in Ten Industries". Some are familiar. Yet, picking and/or ranking things like this may be thought of as a fool's errand. As always, the future will be full of surprises. But, trend spotting is fun.

Architecture trend #6 is "Cars vs No Cars ... Despite loud protests from smart-growth advocates, the rapid spread of suburban-style sprawl isn't slowing. Yet, there's a parallel movement of dwellers into more pedestrian-friendly communities, closer to downtown ..."

Yes and no. Last Monday's post cited the 2001 National Household Travel Survey. Comparing it to its 1990 precursor, trips per person were up in all places by all modes for all purposes. Rising incomes will do that.

We tend not to price travel correctly and that is one of our huge domestic policy failures. (We compound the error by spending hugely on ineffective second-best policies.) Given all that and sharply rising incomes, flexible land markets come to the rescue and "impending gridlock" remains forever impending (Steve Polzin's way of putting it). It's really quite amazing.

So, let's strive to keep flexible land markets free and flexible. Freer is better. Let's call that Really Smart Growth.

Ami Eden's NYT op-ed, Playing the Holocaust Card, will stir controversy. He makes the important point that it is still important to measure one's outrage. Prince Harry's antics are not in the same ballpark as Egyptian mainline newspapers that write about Indian-Israeli-U.S. nuclear testing causing the tsunami -- and that this was part of a larger program of mass-murder (cited by Melik Kaylan in yesterday's WSJ).

Well meaning people often feel an impulse to evoke the memories of the victims of unspeakable crimes. Others love to drape themselves in the mantle of other people's suffering. Many have no idea in which of the two categories they find themselves.

In a better world, bigots would not be bigots. In this world, evoking the terrible suffering of the victims of genocide must also be done with some
thought and some trepidation.

Watching young school kids being marched through Anne Frank Haus last year and seeing the bored look on their faces gave me the impression that some fine-tuning would not be a bad idea. The European extreme right is already linking Holocaust remembrance with PC.

Housing bubbly

Here is MarginalRevolution on Robert Schiller's new edition of Irrational Exuberance and house price bubbles.

Some writers have never met a bubble they didn't like. The allusion is to something that suddenly pops, meaning that prices go over a cliff.

Supply and demand suggest that this is unlikely but we are talking about asset prices that necessarily include a speculative component -- one that is subject to self-fulfilling prophecies and mood swings.

In that case, the high end of the housing market may be at some risk. But, absent a decent definition of high-end housing, we have very little to go on. Or to worry about. When multi-million dollar homes shed some of their value, the losers will not be those households with most of their wealth tied up in their homes.

Sixty years

Larry Summers suggested that innate sex differences as an explanation of natural science career success differences might be an hypothesis to be explored by scientists of good will. His critics have included scientists who prefer that the question remain out of bounds.

This is the week of the 60th anniversary of the Auschwitz liberation and an occasion for some reflection on that era. Nazi Germany and other places included high-brow types who had an easy time pontificating about innate differences. Many who should have known better in this country also said and wrote stupid -- and ultimately vicious -- things about race.

Poor Larry Summers. He assumes that the scientists in his day and age who might investigate differences in gender performance are better souls than the freaks we see in history.

His optimism is, in my view, refreshing. Even appealing. Some of us believe that in 60 years a corner has been turned.

Manpower planning

Immigration is a tough issue because open borders run up against security concerns but controls empower all sorts of politicized gatekeepers and also create brutal black market trade.

The Bush compromise initiative on temporary work permits appears to have been lost in identity group politics.

Globalization is the best international anti-poverty policy and migration reform is a key part of globalization.

Against this very harsh background, it is almost humorous to read about the Canadian immigration official who got into trouble, "when it was revealed that she had issued a permit to a Romanian woman who had worked on her election campaign. To the prurient delight of the opposition, the woman was a stripper who had come to Canada in 2003 (along with 552 other Romanian women) under a special programme to fill a shortage of labour in the 'exotic-dancing' business." (See the full story in the January 22, Economist).

One of the dumbest ideas from 1970s American politics was "manpower planning." It appears to be alive and (not) well in Canada.

Not So Smart Growth

The "Summary of Travel Trends: 2001 National Household Travel Survey" (Dec, 2004) is full of data and findings to occupy urban researchers for some time.

In spite of years of "Smart Growth", 2001 was the first year that there were more vehicles per household than licensed drivers per household (1.89 vs 1.77).

2001 was also the year that saw a reverse in previous increases in worktrip speeds. Yes, the average commute was getting faster between 1983 and 1995 (covering three previous surveys). No more.

Was Smart Growth to blame? All we can say for sure is that it didn't help.

We do know that the 1995-2001 period was a time of rapid income growth. Not only did people have greater access to private vehicles but as people become wealthier, they travel more -- just as they consume more of everything.

We are back to the old story. If policy makers want to "do something" about auto travel, they have to price road access and parking correctly. Nothing else works. Most U.S. policy makers are, however, bent on trying anything but proper pricing. Not smart.

Drink and density

Google finds 32,500 sites that talk about urban sprawl and obesity. I imagine that many of them include the currently favored causality story.

Now, the NY Times reports high levels of alcohol abuse in Manhattan. Google is not as helpful here because I do not have a good single-word antonym for sprawl.

Peculiar environments draw particular populations. People, once there, also tamper with their environments. The interactions are complex but the sprawl-obesity link has been irresistable for many commentators.

Could high-density living cause alcohol abuse? The observed link has now been reported by the NY Times. Is there causation? Does alchohol abuse cause high-density development? Unlikely. Does some force in nature simultaneously prompt imbibing and high-density development to occur in close proximity? Also unlikely. Are tipplers disproportionately drawn to and enabled by Manhattan-type environments? For the case of NYC, that's the thrust of the Times report.

Those who worry about sprawl have cited the obesity studies as ammunition for their case. Now, it appears, they have to deal with the news about booze.

No one ever said that environmental determinism would be simple.

The way we live

"The suburbs" is a huge topic -- and also a cliche magnet. Many books, movies, editorials, conversations -- and policy discussions -- revert to flimsy stuff.

A helpful typology is now available from Brian Mikelbank, in the most recent Housing Policy Debate (Vol 15, Issue 4).

Whereas the author cites too many interjurisdictional "tensions" and not enough complementarities for my tastes, his statistical work highlights the amazing variations in the suburbs -- rather than the all-white, uniform, bedroom community, rich, and well schooled stereotype that too many writers and analysts cannot seem to do without.

Third Rail

George W. Bush has touched the "third rail" of American politics and the big debate is here. Whatever one may think of George W., he deserves much credit.

The Social Security reform discussion has actuarial, economic, political, social, cultural, you-name-it aspects and I see lots of interesting materials almost every day.

Jonathan Clemens in today's WSJ includes some (some) of the basic math that we should be looking at. Here it is.

"Doing the Math on Private Accounts:Why Investors Will Want to Fund Them"

January 19, 2005; Page D1

"You may not like the idea of Social Security private accounts. But you will almost certainly want to fund one.

"I am not arguing that the partial privatization of Social Security is a good idea (I have my concerns), and I am not arguing that private accounts will fix Social Security's financial problems (they won't). But suppose Social Security is overhauled, and suppose, as many pundits expect, that we end up with a mix of traditional Social Security benefits and private accounts, as called for in "reform model 2" suggested by President Bush's 2001 Social Security commission.

"At that point, you will face a critical decision: Should you direct part of your payroll taxes into a private account, or should you continue to put everything into the traditional Social Security system? As best I can figure, it's no contest: You should go for the private account.• Model behavior.

"When I sat down to analyze reform model 2, I thought I was in for some heavy-duty math, comparing potential rates of return. But in fact, the break-even rate of return is built into the model -- and it's so low it makes private accounts look awfully attractive.

"With model 2, you would have the option of putting four percentage points of your payroll taxes, up to $1,000 a year, into a private account. The rest of your payroll taxes would continue to flow into the old system and eventually earn you the right to a monthly check. That check, however, would be smaller than the check you would receive if you continued fully funding the traditional system.

"How much smaller? In calculating the reduction, the Social Security Administration, or SSA, would make two assumptions, explains Jeffrey Brown, a finance professor at the University of Illinois at Urbana-Champaign and a staff member on the 2001 commission.

"First, it would assume that the dollars in your private account grow two percentage points a year faster than inflation. Second, when you claim your traditional benefit, the SSA would assume that you simultaneously took the money in your private account and used it to purchase an immediate annuity that pays a lifetime stream of inflation-indexed income, just like you get from Social Security. The SSA would then reduce your traditional benefit by this hypothetical monthly income.

"Keep in mind that these are just the SSA's assumptions. The SSA won't care how your account has really performed, and it won't insist you buy an inflation-indexed annuity.

"Confused? Maybe an example will help. Suppose that, if you had continued to shovel all your payroll taxes into the traditional system, you would receive $1,500 a month at age 66. But instead, years earlier, you opted for a private account. Based on its two assumptions, the SSA calculates that your private account should generate $500 a month. As a result, the SSA would reduce your $1,500 traditional Social Security benefit by $500, leaving you with $1,000.
Model 2's methodology can also be applied to family and survivor benefits, Prof. Brown says. For instance, if your full Social Security benefit was $1,500 a month and your spouse never paid much into Social Security, he or she would qualify for $750 based on your earnings record. In that case, if your assumed income from your private account was $500, your combined benefit would be reduced to $1,750.•

"Private benefits. The hope, of course, is that your private account will grow to generate more income than the SSA assumes. And there's a good chance it will, because the break-even rate of return -- just two percentage points a year above inflation -- is so low. Indeed, you should be able to beat the break-even with a fairly conservative investment strategy.

"Not being forced to annuitize is also a big advantage, says John Cogan, a member of the 2001 commission and a senior fellow at the Hoover Institution at Stanford University. With your private account, you could delay buying an annuity until your 70s or, if you are in poor health, skip the annuity entirely and instead pass on the money to your heirs.

"Make no mistake: None of this will fix Social Security's financial problems. In fact, the transition to private accounts could create a huge fiscal mess. Instead, the fix for Social Security lies in other solutions, like raising taxes or slowing the growth in traditional benefits.

"Let's say that traditional benefits are pared back, so that your full benefit is reduced from $1,500 to $1,300. In that case, if your private account is assumed to generate $500, you would receive just $800 from Social Security.

"As this example suggests, benefit cuts and tax increases will hit everybody, whether they plunk for private accounts or continue fully funding Social Security. But while the pain will be felt by everybody, only those who opt for private accounts will have the chance to make up the lost ground, by earning more than two percentage points above inflation.

"How easy will it be to beat that threshold? I asked Baltimore fund manager T. Rowe Price Group to calculate the probabilities, by analyzing the historical performance of different investment mixes. The results, shown in the accompanying chart, don't reflect investment costs, and future results could be lower. Still, if history is any guide, the odds of beating the break-even rate look pretty good."

The Ears Have Walls ... But There Are Exceptions

The best ideas come from the bottom and percolate up. It's an old concept; cultures that make room for bottom-up innovation can be expected to do better. There is anecdotal evidence that past U.S. military successes generally corroborate the idea.

Now Dan Baum, who has been doing superb writing about Iraq for The New Yorker, contributes "Battle Lessons" (Jan 17 issue; I could not find the link but Dave Green writes that it is www.newyorker.com/fact/content?050117fa_fact ) in which Baum highlights how web-savvy troops in the field have been creating websites, over which they share life-saving pointers learned the hard way.

"Little by little, the Army is absorbing Companycommand.com and Platoonleader.org. In 2002, West Point put Platoonleader on its server and a year later added Companycommand; both sites now have military addresses. The Army also began paying the Web site's expenses. It sent all four of its founders to graduate school to earn PhD's, so that they can become professors at West Point, where they will run the sites as part of their jobs ..."

The Pentagon does lots of silly things but, apparently, there are also occassions when the top knows to listen to what good stuff percolates its way.

The Question

Many thanks to Brad Hill for pointing me to the FT's "Into the heart of suburbia." Bush and the Republicans, as everyone knows, are strong in exurbia and beyond. As more Americans move into these environs (which they surely will), will they change the culture (and politics) of these places, or will the culture change them? That is the question which writer James Harding poses. He does not come down on one side or the other but does a wonderful job framing the question.

Liberty vs. Security

Computers and modern electronics are marvels but less so in the hands of government agencies. The federal government has been a serial offender. Remember the many IRS upgrades that weren't? Yesterday's story about the FBI's $171 million software problem is only the latest in a long series about how agencies could not bring themselves to get it right. Some people are not surprised.

In a world of tade-offs, some of them only exist in theory. Type I and Type II errors are supposed to be inversely proportional. So are equity and efficiency. So are security and freedom.

The latter trade-off is missing in action. The FBI's computers and, too often, policing everywhere provide illustrations. Privacy infringement by government is a lesser problem than many imagine whenever the agencies are incompetent.

That's the good news. A casual reading of events reveals that, too often, we give up freedom and privacy but without even the quid pro quo of extra security. In this sort of world, the only loss in the software example is the dollar cost. Neither security nor privacy are impacted.

Bottom-Up Social Security

A growing mountain of evidence and argument addresses our other-regarding side. (Some even deride the homo economicus straw man.) A fun read is Darwin's Cathedral by David Sloan Wilson. The religions that have flourished resulted from adaptive evolutionary forces that selected practical arrangements for supporting group fellows. (I was a co-editor of The Voluntary City, which presents supporting examples assembled and sifted by various scholars.)

The social security reform debate (and the one to follow re Medicare/Medicaid) focuses a lot of attention on private accounts and what we can/should do about those who completely blow it. This aspect is on almost everyone's mind -- but to varying extent.

What happems when the other-regarding impulse is extended beyond the identifiable groups that once formed religious groups? The welfare state is a poor response because it involves collective action problems and ungainly bureaucracy.

A limited state role (vouchers and credits) would allow scope for voluntary group actions (including schools and insurance pools). The standard objection is that these might "re-segregate" society. Yes and no. The group impulse may be as strong as ever. Neighborhood associations across America are growing. Not all function as communities but many do. It is probably a good idea to let them form schools and insurance pools as they see fit.

The welfare state would the be the last and not the first resort.

Learning Capitalism

Reading the Thomases (DiLorenzo and Sowell) is always great fun; they are prolific, they are clear, they are smart and they are very angry.

In How Capitalism Saved America, Thomas J. DiLorenzo surveys the American capitalism story from the pilgrims to FDR to Michael Moore.

Somehow, we survive and even prosper in spite of the fact that widespread ignorance enable statist policies (not to speak of ideas and rhetoric) to persist.

Private school curricula are unlikely to be much more enlightened than public school curricula. The good news is that homeschooling is an option; parents and others can now find ever more helpful resources on the internet.

That may be the only way to teach young people that FDR did not "save capitalism". It somehow survives in spite of the fact that most of its beneficiaries do not grasp its essentials. They would not learn about them in the curricula of America's lower and higher schools.

When Doris Kearns Goodwin was still featured on the occasional PBS evening news interview, she would rotuinely explain to her audience that increasing "inequities" of 1920s capitalism "caused" the Great Depression.

Money in Politics.

"Campaign finance reform" never does "get the money out of politics." Yet, the faith that "good government" is just over the horizon continues to entice educated people, now about a hundred years after the Progressive Era.

So it is no suprise that the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold) is a flop. "Money Keeps Talking", by Julian Sanchez in the Feb 2004 Reason, includes data on money spent by the candidates in 2000 and 2004: $3,042 million vs 3,862 million. I could not find similar tallies in the major newspapers.

Big government means big stakes which means big attempts to buy influence. Smaller government is the only alternative.

That's not a serious option. The real, serious options are laid out in a recent Brookings study and involve further election campaign law reforms.

Some Help is on the Way

Help is on the way. But we can always do better. The LA Times and many others focus on government emergency grants. The currently pledged $350 million (about the cost to pay for one mile of the LA subway, Wendell Cox reminds us) by the U.S. places us fourth (after Australia, Germany, Japan). Yet, those who produce and follow these rankings are missing two very big stories.

Today's WSJ features pieces that call attention to two other important sources of help (both short pieces reproduced below). We do very well in the realm of private giving. At the same time, we fail badly in terms of our discriminatory trade policies.

"Tariff Tsunami"
(WSJ, January 6, 2005; Page A16)

"Senate Majority Leader Bill Frist is in Sri Lanka today bearing tsunami relief, one more worthy effort amid thousands. But if he really wants to do some long-term good for that nation's victims, he'll return to educate his fellow solons about the numbers in the chart below.

"A friend of ours scoured Census Bureau data for 2003 and pointed out some eye-popping statistics showing how U.S. tariffs discriminate against the world's poor, including in particular those in Sri Lanka. The duties paid on Sri Lankan garment exports to the U.S. in 2003 were $238.5 million -- which was more than the total duties ($227 million) paid that same year on every product exported to the U.S. from all six countries of Scandinavia.

"That's despite the fact that Scandinavia exports roughly 12 times more to the U.S. than does Sri Lanka -- $23.8 billion versus $1.8 billion in 2003. The average U.S. duty rate on products from those rich nations of Northern Europe is about 1%, while the average rate on Sri Lankan goods is 13.8%, and 16.6% on the bulk of its exports, which happen to be clothing. The combined GDP of those six European lands is about 10 times the size of Sri Lanka's, with far higher per capita incomes. If there was any doubt left that U.S. protectionism discriminates against the world's poor, this ought to end the debate.

"Americans of all faiths and incomes have been donating tens of millions of dollars to assist the Christmas tsunami victims. This is a tribute to our generosity. But there is no amount of aid that would be more meaningful to more people in Sri Lanka than to lift U.S. tariffs on its textile exports. Perhaps when Mr. Frist returns, he'll bring the matter up in the Senate Finance Committee."



"Private Acts of Giving"

By ROBERT A. SIRICO, WSJ January 6, 2005; Page A16

"The outpouring of money to help the victims of the tsunami has been marvelous to behold. At press time, the Red Cross alone had collected an astonishing $69.2 million in cash. The grand total raised by private dollars will be many times that amount. Though aid alone can never restore what was lost, the expression of goodwill that the money represents is an inspiration. It may also point the way to reforming the way foreign aid is undertaken and managed in the future.

"Of the $108.5 billion given by major countries in foreign aid and investment in 2003, the U.S. contributed 35% or $37.8 billion. The next highest giver was the Netherlands. It is neither here nor there to consider the percentage of national income because, when looking at the U.S., all budget items seem small by comparison with overall productivity.

"Also in 2003, donations to foreign countries -- that is, not collected via taxes and spent by the government -- were the largest part of foreign aid, amounting to even more than government gives. Research by Carol Adelman, the leading scholar in this area, found that private aid in the year 2000 was $35 billion compared with government aid of $9.9 billion.

"Private giving was on the rise even before the tsunami. Foundations and individuals are increasing contributions. One reason is that it is more effective and targeted directly at the needs of the people and their communities. I know from experience that the groups involved in private giving are more agile and manage money more efficiently. In fact, Ms. Adelman and others have speculated that the trends are so strong in the direction of private giving that foreign aid is being privatized to some extent.

"Many of the same problems of the old-style welfare state afflict foreign aid today. Countries become dependent. Foreign aid feeds political corruption, and -- what's called the moral hazard -- rewards bad economic policies rather than encourage economic reform. Private aid, however, has nowhere near the same level of problems as government aid. It tends to go to individuals and private institutions rather than governments, so it doesn't feed corruption and the problem of moral hazard is reduced.

"Now we have a spectacular demonstration of the ability of private groups to respond to disaster in ways government never could. Private aid agencies responded to the tsunami victims first, doing the most difficult work, even as governments were still managing PR issues over whether they are "stingy" with others' money.

"President Bush has asked his father and Bill Clinton to lead a new fund-raising effort to help tsunami-stricken regions. Cynics might argue that this effort is akin to the mayor arriving just in time for the ribbon-cutting at the local mall. But the Bush administration understands that the future of foreign aid is very much bound up with private efforts and that the contributions of governments can only go so far.

"Whatever the future of foreign aid, we can see that the path leads toward relying less on government and more on private foundations, churches and NGOs -- all buoyed by the generosity of everyday individuals. We may yet find a way to end foreign aid as we know it."

It's the Aura

Was it UC's Clark Kerr who memorably mentioned that the alumni want college sports (successes), the undergrads want sex and the faculty want parking?

In I am Charlotte Simmons, Tom Wolfe has a lot to say about two of the three. Big-time college basketball are nicely rendered -- as was big-time college football in A Man in Full.

My team had a dream football season, capped by last night's Orange Bowl sweet victory.

The NCAA, every economist knows, is an exploitative cartel. Sanctimonious university presidents (and other enablers) shell out big bucks to the coaching staff (and others) while insisting that the "amateur" nature of the sport requires that they abide the cartel.

Whereas some top schools have stopped playing (U. of Chicago is everyone's favorite example), other top schools are models for Wolfe's novel (Duke and Stanford). What are they thinking? The big revenues do not justify the big expenditures. Yet, Wolfe reports, these places know what they are doing. "It's the aura," he writes.

I think he's right. The market value of all of my students' diplomas became slightly greater overnight. Exploiting a few black males (and some others), the university brass would say, is justified.

It's the aura.

Convergence and Competition

Convergence of communications technologies and how it will upset "monopolies" (imagined and otherwise) has been moving forward for some time. According to the WSJ story (below), it is about to take off. I believe it. I also have no clue how it will unfold but the unpredictability of it all is the hallmark of the process. There will be many bets placed and some of them will be good ones.

"A New Tech Battle for the Home
As Industries Collide and Gadgets Morph,Competition Reigns for Home Technology"

By DON CLARK Staff Reporter of THE WALL STREET JOURNAL January 3, 2005; Page B1

"Get ready for another round of technology convergence, bringing more choices -- and more confusion.

"Phone companies are offering TV programming. Cable companies have added phone service. Cellphones are now computers, cameras, video players, navigation and messaging devices. Other gadgets are merging, adding hard drives and Internet connections. Every form of entertainment has turned digital and is zipping around the globe and the home on a high-speed wire, or a wireless network.

"The scene, as industry executives prepare for the annual Consumer Electronics Show in Las Vegas this week, has never seemed more chaotic. The extended forecast: more of the same.

"Indeed, competitive pressures are likely to cause new products and services to merge. Cable and phone companies are already rushing to offer competing 'triple-play' bundles of voice, video and high-speed Internet access, for example, not only to seek more revenues but also to keep customers of their core services from defecting.

"'If you don't have the broadband pipe, five years from now the likelihood that you will keep the entertainment or voice assets diminishes,' says David Dorman, AT&T Corp.'s chief executive officer.

"The pressures could push more companies as well as technologies together, with industry giants likely to look for partners and acquisition targets outside their already-consolidating markets. Forrester Research analyst Ted Schadler, in a new study by the Cambridge, Mass., firm, makes a case for such cross-industry acquisitions as Hewlett-Packard Co. buying Eastman Kodak Co., Apple Computer Inc. absorbing TiVo Inc., Walt Disney Co. eating Electronic Arts Inc. and Google Inc. grabbing Gemstar-TV Guide International Group Inc.

Mr. Schadler concedes the odds of any one of those transactions happening soon are slim, and the companies won't discuss the speculation. But he argues that such giants will need to join forces to create offerings that could drive new demand -- such as phones that send caller ID information to TV screens, televised sporting events that allow viewers to pick camera angles, and new types of personalized online games. ..."

For us consumers, it could not be better.

Poverty and Mobility

The current issue of The Public Interest includes an exchange on "Low-Wage America: Two Views" (between Robert F. Ferguson and Marvin H. Kosters). I think the writers missed the big story.

Published in July of 2003, the Census Bureau's "Dynamics of Economic Well-Being: Poverty 1996-1999" is the follow-up to the July 1998 report with the same title (but subtitled "Trap Door? Revolving Door? Or Both?"). Both Census reports highlight income-mobility and dynamics.

The recent study notes that, " ... a majority of poor individuals do not remain poor for very long periods of time ... poverty is chronic for a small but significant proportion of the poverty population."

The average poverty rate in 1999 was 12.8%; 19.5% were poor for at least 2 months but 2% were poor all 48 months.

In 1996-99, the report shows that 7.6 million people entered poverty but 14.8 million left poverty. Immigrants, legal and otherwise, who entered the U.S. in this interval are, by definition, not counted.

But, how many immigrants were there in that period? Three-million "authorized" and more "unauthorized" (census labels).

Some points emerge. 1) Comparing poverty levels but not cohorts is practically meaningless; and 2) it would be wonderful if the SIPP mobility data were comparably available for recent immigrants as well as for non-immigrants; at least, flag these folks in the survey.

The U.S. poverty story is complex but is difficult to fathom unless these two points are addressed.

Fragile, Not Helpless

Dan Henninger cites a useful stat in his Friday WSJ column. "The Red Cross estimates that for the past ten years when a natural disaster occurred in a developing country, the number of people killed was 589; but in what the Red Cross calls a country of 'high human development' it was 51. That's 11 to 1. ... The answer is to compress this ratio."

Much of the commentary about the Indian Ocean tsunami notes how unkind nature can be, how fragile we are, etc. (David Brooks' "A Time to Mourn" in today's NY Times.) Of course. But we can compress the ratio.

Development is the only way. And it is dawning on more and more people that economic freedoms are the only way to development.