JDI IN THE NEWS - 2010

Reihan Salam, Saving The World One App At A Time, Forbes.com, March 1, 2010

Take a snapshot of our society and you'll find misery and heartbreak. Roughly half a million American children are in the foster care system, and that number is likely to increase as high unemployment punishes more vulnerable families. As David Kaiser and Lovisa Stannow vividly demonstrate in a forceful and disturbing essay in The New York Review of Books, the epidemic of sexual violence in U.S. prisons is nothing less than a stain on our national character. Though violent crime continues to fall, it is the poorest and most socially isolated Americans who bear the brunt of it.

Over the last few years, we've come to appreciate and understand that our health system is badly broken, leaving large numbers of people without prompt and adequate care. Looming environmental dangers, ranging from climate change to threats to the groundwater supplies on which all of us depend, demand serious solutions. Public trust in government continues to decline as large and powerful private interests mount countless hidden power grabs designed to enrich insiders at the expense of outsiders.

But one reason for optimism is that, like any snapshot, this dark view necessarily obscures the fact that we are, in the United States and in the world, on a slow upward climb. There is no question that a faster ascent out of the poverty and tragedy that once defined almost every human life would be better, and that is why so many of us have a sense of urgency about the problems we face. And it doesn't salve the wound to observe that "we need to keep things in perspective," however true that may be. Victims of the Haitian earthquake face a more desperate set of circumstances than victims of the Chilean earthquake. The Chilean child who has lost a mother is no less shattered by the experience.

This all comes to mind as a number of conservatives, libertarians and democratic socialists declare their opposition to President Obama's health reform proposal. It is often said that though the bill is imperfect, it is much better than the status quo. With that in mind, the argument goes, those of us who reject the bill are betraying a callous disregard for the poor and the sick. I can't speak for everyone who opposes the president's health reform, not least because opponents range from single-payer advocates to Randian individualists who consider taxation a form of theft. I tend to worry that the reform bill will in practice exacerbate our fiscal imbalance, and the resulting increase in public debt will dampen economic growth. This, in turn, will slow down our aforementioned upward climb as a society, endangering the well-being of many vulnerable people.

Rather depressingly, we face choices like this all the time. Though the reform bill would undoubtedly help some in a very visible way, it has the potential to harm others in a less visible way. Weighing these considerations is a task that deserves to be taken seriously, which is why I find political triumphalism so distasteful. Opponents of the reform bill might "win," but that's nothing to cheer about.

In light of this admittedly tragic view, I take solace in the possibility that despite--or perhaps because of--our inability to pass sweeping reform legislation without crafting ugly compromises that buy off those ever-present large and powerful private interests, we're getting better, and faster, at solving the countless small problems that add up to big problems.

Consider the financial crisis, a messy and complex tangle if there ever was one. Congress is working to craft a reform proposal that will address systemic risk and much else besides. On the more prosaic level, one problem is that financial literacy, the ability to understand and manage one's personal finances, is far from evenly distributed across the population. Bluntly speaking, as Matthew Yglesias and John Carney have observed, financial literacy will be a problem as long as basic math and reading comprehension are a problem. Many financial reformers on the left thus favor a regulatory solution, including an agency designed to ensure that consumer financial products aren't unduly dangerous for the average small investor. While this approach is attractive in many respects, it raises the danger of regulatory capture--that financial firms would find a way to bend the regulations to meet their interests rather than those of consumers.

That's why I'm so encouraged by a few key developments in Silicon Valley, a world that policymakers still scarcely understand. Anil Arora, the CEO of Yodlee, has created a platform for software developers to use Yodlee's vast collection of consumer financial data to create new applications that could potentially cut through the thicket of fees lenders use to exploit our, or perhaps I should say my, laziness and gullibility. Meanwhile, as Daniel Roth reports in Wired, dozens of start-ups, from tiny Twitpay to much-hyped Square, are working on ways to do an end-run around bloated credit card companies, with their exorbitant fees.

While this might sound trivial, it helps to look at problems from a different angle. A disproportionately large slice of the climate change problem is caused by wood-burning stoves used across the developing world, which send soot particles into the atmosphere that, leaving the ugly health consequences aside, help trap heat. A small firm called re:char is using a carbon negative process called pyrolysis to help poor farmers turn agricultural waste into biochar, a process that creates both valuable energy and a soil additive that can dramatically improve fertility without damaging the environment. If re:char's method takes off, it has the potential to make a dramatic dent in the climate change problem--much more than the multibillion-dollar clean coal initiatives being pursued in the U.S. and China.

My guess is that the entrepreneurs behind these initiatives are very diverse in their beliefs about how America should be governed. What they share is an instinct for solving problems at the ground-level, motivated by profit, yes, but also by a desire for recognition and a desire to do good. Harnessing these impulses to accelerate our ascent from poverty and tragedy is the thorniest problem we face. The more I've thought about these problems, the more I've come to the reluctant conclusion that powerful interests often use the rhetoric of moral urgency to make the system work for them. That's the reason--not callous disregard--that I think it's important to stay skeptical and to keep criticizing concentrated power, regardless of the banner it waves.



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