I’m just about done listening to Haiti After the Earthquake as a book on tape. One thing that Americans could take away from this book is how much we over-invest in central government and housing. As noted in my previous posting, the earthquake had little long-term effect on Haiti’s GDP despite the fact that Haiti’s central government was mostly destroyed (ministry buildings in the capital city flattened; civil servants killed while at their desks) and approximately 1.5 million were rendered homeless. What have Americans invested in during the last few decades? A bigger central government (state governments count too, since a lot of states are roughly comparable to Haiti in population (10 million)) and fancy houses. Haiti’s GDP didn’t shrink; should we be surprised that the US GDP is growing only slowly?
Farmer is not a believer in the old saying “If the government is big enough to give you everything you want, it is big enough to take away everything you have.” He wants governments in rich countries all over the world to raise taxes so that more money can be given to Haiti’s government (not spent directly by NGOs in the country). At the same time he decries traditional Big Government policies such as agricultural subsidies that render Haitian agriculture uncompetitive (thus requiring more people in Haiti to live on hand-outs from the countries that are providing hand-outs to their domestic farmers). Farmer doesn’t explain how governments can be as big as he wants them to be and at the same time immune from lobbying by farmers and other competing domestic groups looking for hand-outs. The U.S. provides a good example here. When Congress raised taxes on American workers and investors, it spent the money to subsidize the U.S. health care industry (“Obamacare”) rather than to help poor people around the world get better health care, clean water, etc.