The recent and ongoing events in Japan, the third wealthiest country in the world (after the U.S and China), are familiarly tragic; it is only weeks ago that we woke to similar headlines from New Zealand, slightly more than a year since disaster struck Haiti, five and a half years since New Orleans sank under the winds and waters of Hurricane Katrina, and only six years since more than 230,000 people died in the catastrophe in the Indian Ocean countries of Indonesia, Sri Lanka, India, Thailand, and more.

The line between prosperity and desolation is razor thin and fragile; a matter of moments is apparently all that separates the two. Last week was Japan’s moment, but our geographical distance from this disaster should not leave us complacent—seismic moments of change are not respecters of nationality or socio-economic worth, and today’s terrible news from half a world away will find its way into our pockets tomorrow.

Natural disasters exist throughout recorded history—the mythic accounts of the destruction of Pompeii, Troy, and Knossos are borne out by the remains of their ruined civilizations, and reports have surfaced this week of the discovery of Plato’s Atlantis in Spain. These historic cataclysms altered the shape of the globe, both geologically and economically; similarly, it will take decades, if not centuries, to evaluate the total impact of Japan’s tragedy, both locally and globally.

After the waters recede in Japan, the bodies are recovered, and the rubble is cleared away, we may never be able to place a value on all that has been lost. The cascade of disaster is compounding damages even as it delays eventual totals of devastated lives and property; the planning and soul searching the country did after the Kobe earthquake sixteen years ago has not been entirely successful. The death toll in this most recent event will be greater than at Kobe; entire cities and towns have been destroyed, supply lines for food, water, energy and communication have been disrupted. All this, before one even begins to evaluate the immediate and long-term costs involved in the nuclear cataclysm.

What is clear is that, whether a pre-disaster community was rich or poor, post-disaster looks remarkably the same wherever. Crumbled buildings, whether made of mud or stone, are crumbled buildings. And grieving people look remarkably alike the world over.

Where differences lie is in an area’s ability to reconstruct itself. There are times where the costs far outweigh the benefits, giving us the remains of Pompeii and Chernobyl. And then there are the phoenix-like resurrections, like San Francisco after 1906, and wealthier portions of New Orleans one hundred years later. In between lie the marginal reconstructions, mostly in areas where poverty ruled both before, and after, the disaster, and where resources just did not exist to mount a successful rebuilding. One need only look at Haiti over a year after the earthquake, or New Orleans’ Lower Ninth Ward to see how slow and problematic rebuilding efforts can be.

There is no question that the Japanese will rebuild better than before, if possible, once the flooding is contained, the earth stops moving, and the volcanic activity subsides. The difference this time is that, in our global economy, their rebuilding may well increase our insurance costs and interest rates.

While the Japanese are historically wary of insurance, and therefore tend to be underinsured by U.S. standards, the total claims for this current disaster will likely eclipse that of Hurricane Katrina, the current leader. And, since insurance companies are global, increased claims in Japan will boost insurance premiums the world over, especially in high-risk areas such as Florida and California.

The balance of the rebuilding costs, after all insurance claims have been paid, will likely come from a combination of savings (the Japanese, traditionally phenomenal savers, have reversed that trend over the last decade) and loans. Increased borrowing demands will force all debtors worldwide to offer higher interest rates to entice people and countries to lend them money. One need only look at the massive U.S. governmental debt already owned by foreign governments, corporations and individuals, without regard to what each of us owes personally, to see that pressure will be on interest rates to rise. While this will be good for investors, it won’t be so fabulous for borrowers; already uneasy credit markets may become even more restrictive.

We can view the events in Japan as interested bystanders, or we can take them to heart. We are as unprepared for a disaster of this magnitude as anywhere; after all, no matter how great the preparations, nature is far mightier than anything we can anticipate. But, while nothing can stop our homes from washing off their foundations, there are steps we can take: paying down debt, saving money, making sure we have adequate insurance, and especially, hugging our families and friends close.

(Originally published in The (Montpelier, Vermont) Bridge on 03/17/2011.)