EYE ON THE PIE: Don’t let a little suffering wreck holidays

Keywords Government / Insurance
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I drove past the shrine at Clark and Addison in Chicago the day after the White Sox won the World Series. All was normal outside Wrigley Field. There was no evidence of the momentous event in Houston the night before. The White Sox and their fans do not exist for Cubs fans.

There is an order to the world. For Hoosiers, people from Kentucky generally rank lower than folks from Pennsylvania. Yet we know Hoosiers don’t rank highly in the eyes of people elsewhere in the country.

Why don’t we rank well? It must be the time confusion. Hence, we make ourselves seem like even greater fools by changing from one stupidity to another. That’s Hoosier progress. The governor’s office, seeing a disaster, declares itself neutral. That’s Hoosier statesmanship.

We could have resolved the time problem easily. Do nothing. Or, if necessary, go with Central time, daylight and standard, except for that band of counties (from Franklin to Harrison) that lie in the economic orbits of Cincinnati and Louisville. To ease the pain of this solution (for all solutions have pain), we should have coerced Michigan to make all but the Detroit area part of the Central time zone as well.

Yet life runs more by the calendar than the clock. And now, with Halloween past, we prepare for our annual spending extravaganza: Thanksgiving/Christmas. Hurricanes Katrina and Rita are behind us, so we need not think of the homeless or jobless. Certainly, we need not consider the 55,000 dead from the earthquake in Pakistan. Nor need we make provision for the hundreds of thousands in that mountainous country facing winter without shelter.

Earthquakes, hurricanes, tsunamis, floods, pending pandemic conditions, even terrorist attacks, are just temporary intrusions into our annual round of consumption.

How are we to handle disasters? There are the usual extremes: Tax everyone to pay for a natural disaster fund, or tell everyone, “You’re on your own, bud.” In the first, we have government programs in conjunction with campaigns for tax-supported private giving. In the second, we rely on private insurance, which depends on the information available to an affluent population, augmented by voluntary contributions that provide no tax benefits.

Our current system is clearly “tax and spend.” When a problem occurs, the governor of the state declares a disaster area. Federal and state tax funds are released for assistance. Massive, shrill campaigns for tax-deductible charitable giving are supported by the theatrical angst of stars. If we build up debt, that’s just a sign of our virtue, a measure of our concern for our fellow beings on this unpredictable planet.

We would not turn our backs on people who live in flood-prone areas, or on those who, by no fault of their own, suffer the ravages of tornadoes or the invasion of crop-destroying beetles. Nature is cruel, indiscriminate and capricious. Any one of us could be struck down tomorrow and all of us must be prepared to help. There, but for the grace of God, go I, a victim of Nature. (Wouldn’t Freud enjoy that?)

How do people recover from disaster? They must have internal and external resources. That is, they must have knowledge and skills the world values. In addition, they must have savings (insurance) on which they can draw to reconstruct their communities, if appropriate.

We do not pay much attention to the ongoing illness, hunger and illiteracy of the world that prevent the accumulation of human knowledge and skills. Even in advanced countries, the affluent do not have much in the way of savings and have to depend on loans and gifts from others after a disaster.

What a wonderful world it is that gives us the White Sox, just a year after the Red Sox. Next year, Indiana University goes to the Rose Bowl. We delight extravagantly in spectacular, but transitory, victories. We respond fleetingly to spectacular, but ongoing, tragedies.

Marcus taught economics more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.

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