I told you to come back for an update....

As most of you have already realized, and some of you have let me know in comments, the statement from the French Foreign Ministry that I posted yesterday was an extremely well done and brilliant hoax. Did I know that when I posted it? Yes (astute readers may have noticed the post was tagged with "yes-men").

So why didn't I tell you, the faithful readers? Simple, it would have blown their cover! As of last night, I wasn't aware of anybody who had publicly labeled it a hoax, you think I could be the first? No way. The point was for the statement to get as much attention as possible, and downright shame the French government...what if some press agency used da google and saw my blog post outing it as a hoax? I would have ruined it all! And so I'm glad I didn't, even if it was slightly deceptive. So, did any major news outlets pick it up? I don't think so, but here is a snapshot of AFP's website this morning (not sure if the link will still work):

The headline reads: "France Pledges € 17 Billion to Help Haiti".

Okay, so my guess is that this is actually just part of the hoax (I swear, I don't know). In any case, today there are multiple news stories about how a fake press statement went out, but you know what? Mission accomplished. As Brooke Jarvis writes for YES!:

While the fake news release—a common tactic of the prankster activists the Yes Men, but not yet traced to a particular group—doesn’t seem to have fooled any major news outlets, it did bring the debt (and its contradiction with France’s public stance) into the spotlight.

And after all, that is what it is all about. So to those aspiring "Yes-Men" out there, keep up the good work.

BREAKING NEWS: France finally agrees to pay colonial debt to Haiti

The following is a press release that went out this morning from the French Ministry of Foreign Affairs, check the link for the video:

FOR IMMEDIATE RELEASE

JULY 14, 2010

France leads Haiti donors with €17 billion pledge
New reconstruction framework marks "new era of cooperation"

Video: www.diplomatiegov.fr/

PARIS--France today announced the boldest initiative yet for Haiti's reconstruction following the devastating January 12 earthquake. In a press conference this morning, the French Ministry of Foreign and European Affairs unveiled a new bilateral Framework Initiative for Haiti's Reconstruction (FIHR).

A spokesperson for Minister Bernard Kouchner emphasized in a special Bastille Day address that the new agreement marked "the dawn of a new era of cooperation between France and Haiti."

"Whereas our nations' relations were, historically, at times tumultuous, today we start with a clean slate united by compassion and cooperation," Ministry spokesperson Natalie Lacroix stated.

Under the FIHR, France has committed to pay back the historic indemnity of 90 million gold francs which Haiti paid to the French republic following the Caribbean nation's independence from France. Including adjustments for inflation and a minimal interest rate of 5 percent per annum, this sum is today valued at € 17 billion (21 billion USD).

Lacroix stated: "In the context of the present global financial crisis, some will say this is no time for the launch of such an ambitious initiative. Yet it is precisely in such times of crisis, particularly as we work to rebuild the global financial system, that our deepest-held values are most important. 'Liberty, equality and fraternity': these must be the pillars of the new global financial architecture if we want to assure that-this time around-Haitians too can share in economic development."

The Ministry is encouraging other governments to follow the French example, and "take responsibility and action to correct the mistakes of the past in this hour of Haiti's greatest need."

The Ministry's full statement is available at: www.diplomatiegov.fr/

Media Contact:
Laurence Fabre
Tel : (+33) 970 44 6727
Email : presse@diplomatiegov.fr

Great statement, and about damn time! Hopefully other governments follow this extraordinary move by France. Check back tomorrow for an update.

The impact of large natural disasters on economic growth

In the aftermath of the earthquakes in Haiti and Chile it is natural to wonder what impact these two terrible events will have on these countries' future economic growth. Will the damage permanently lower output and burden future generations with the reconstruction bills? Or will the post-disaster construction boom and opportunity for structural change act as an economic stimulus, ushering in a new period of rapid growth?

Well, the folks over at the Inter-American Development Bank have clearly pondered these two questions more than I have. And their results are not exactly what one would expect.

Using a large comparative sample of severe natural disasters, the authors take advantage of the fact that natural disasters are a random event to tease out their causal effects on growth. In other words, the paper attempts to approximate a laboratory setting by also putting together a "synthetic" counterfactual of what would have happened in disaster countries if the natural disaster had never happened (they do this by grabbing a bunch of similar countries and weighting them to approximate the initial conditions of the disaster countries).

The results can basically be summarized with the graph below. It shows the path of real GDP per capita in actual disaster cases and in the counterfactual cases. Real GDP per capita is set to zero on the year of the crisis.

So what does this tell us? Well, disasters appear to have no effect on per capita income. In fact, the path of real GDP per capita following disasters perfectly mirrors the counterfactual index.

There were, however, two exceptions to the rule:

"Contrary to previous work, we find that natural disasters, even when we focus only on the effects of the largest events, do not have any significant effect on subsequent economic growth. Indeed, the only two cases where we found that truly large natural disasters were followed by an important decline in GDP per capita were cases where the natural disaster was followed, though in one case not immediately, by radical political revolution, which severely affected the institutional organization of society. Thus, we conclude that unless a natural disaster triggers a radical political revolution, it is unlikely to affect economic growth."

So there you have it. From the perspective of GDP per capita, a profoundly flawed but nevertheless indispensable measure of economic welfare, even the most severe natural disasters do not have an effect. So what's the moral of the story here? Is this a tale about human resilience in the face of calamity? Or is it another sobering lesson in the perils of statistical abstraction?

Photo of the Day: Haitian Farmers Burn Monsanto Seeds

For the background, check out this brief video report from independent journalist Ansel Herz, who has been providing some great reporting from Haiti.

Geography for Dummies...

A nice catch by Jeff Koyen at True/Slant, who notices that Expedia has something against Haiti and posted the map above (the circle is his). Koyen writes:

There may not be any all-inclusive resorts or Cancun-style shitshow hotel deals — but the page’s title is “everything caribbean.” And, Expedia does offer flights to Port Au Prince (JFK to PAP, $466 roundtrip, connect in Santiago).

What’s worse, the entire island of Hispaniola is shown. But the word “Haiti” is nowhere to be found. Somewhere, Wyclef Jean is crying.

Truth, but you know what else is missing? And not just the word, but THE ENTIRE COUNTRY...Cuba!

OK, so Americans can't travel to Cuba and Expedia won't let me buy a ticket to Havana, but I'm not saying you need to put a sexy palm tree over the island like the DR gets, let alone advertise its gorgeous beaches and top notch resorts, just saying you shouldn't totally delete the country from the map!

Somewhere, Fidel is crying.

Bush Uses Clinton as Hand Towel in Haiti

This video is just priceless (the wipe is at about 15 seconds):



But it may not just be out of disrespect, turns out Bush is actually a clean freak. Obama describes meeting Bush for the first time in his book "Audacity of Hope":

“Obama!” he said, shaking my hand. “Come here and meet Laura. Laura, you remember Obama. We saw him on TV during election night. Beautiful family. And that wife of yours – that’s one impressive lady.”

“We both got better than we deserve, Mr. President,” I said, shaking the First Lady’s hand and hoping that I’d wiped any crumbs off my face.

The president turned to an aide nearby, who squirted a big dollop of hand sanitizer in the president’s hand.

“Want some?” the president asked. “Good stuff. Keeps you from getting colds.” Not wanting to seem unhygienic, I took a squirt.

On second thought, it might just have been out of disrespect both times....

The Count

228,109...

...Is the number of tarps distributed to those in need of shelter after the Earthquake in Haiti. Sure sounds like a lot right? Unfortunately, this will only provide the most basic shelter for less than half of those in need. The earthquake, which is estimated to have killed over 200,000, also left 1.3 million Haitians homeless and in need of shelter. The earthquake was an unprecedented tragedy, but the upcoming rainy season (always dangerous in Haiti even absent the most devastating earthquake ever) will likely lead to a second humanitarian crisis. The rainy season will begin in earnest within a month, and rain has already begun to fall (leading to at least 13 deaths already). Shelter is the most pressing need right now in Haiti.

Wait, does anyone really believe that a tarp or two is going to be sufficient? Really?