It’s important to note that we live in a truly global economy in 2008, and that decisions made in Washington’s halls of power and corporate boardrooms affect not only the US but the entire planet.
We’re seeing some very frightening indicators of this truth in action. I may talk about billions here and trillions there when I discuss the housing depression, bank solvency and rampant commodity speculation, but the fact of the matter is the economy is made up of people, and people have basic needs that have to be met, housing is just one of them.
Food is another. And the policies of Washington and Wall Street are starting to bear some very bitter fruit.
Prime Minister Gordon Brown said the U.K. government is concerned that biofuels are stimulating inflation and pushing up food prices around the world.
Brown, in a letter to leaders of the Group of Eight nations, urged countries to study the impact of using the fuels made from crops including corn and soybeans. The U.S. and other nations are encouraging the fuels such as ethanol to be added to gasoline as a way of reducing damage to the environment.
The price of rice, the staple food for half the world, has doubled in the past year to an all-time high. Global food prices increased 57 percent last month from a year earlier, according to the United Nations Food and Agriculture Organization. Countries including Indonesia and Egypt have seen unrest over high prices.
In addition to biofuel subsidies reducing available food stocks, we have commodity speculation in food staple markets, increased demand for the growing populations of developing countries, increased transport and fertilizer prices caused by $110+/barrel oil, global climate change damaging yields and the inability of the worst offenders to reduce greenhouse gases…all of these can directly be traced back to the policies of the current administration.
No, Bush did not cause a world food shortage. But these policies directly contribute to making them worse. The Law of Unintended Consequences should be sandblasted into the doors of the Bush Library in Texas when it opens, for that is truly Bush’s legacy to not just the United States but the entire world.
And the problem is one of basic stability. When world governments spend trillions to bail out investment banks and financial powerhouses, there’s less money left to deal with basic needs of citizens.
Food riots which have struck several impoverished countries could spread with shortages and high prices set to continue for some time, the head of the United Nation’s Food and Agriculture Organisation (FAO) said.
A combination of high oil and fuel prices, rising demand for food in a wealthier Asia, the use of farmland and crops for biofuels, bad weather and speculation on futures markets have pushed up food prices, prompting violent protests in a handful of poor states.
Jacques Diouf, director general of the Rome-based FAO, said on Wednesday during a trip to India that there was a growing risk of social instability in countries where families spent more than half their income on food.
“The problem is very serious around the world due to severe price rises and we have seen riots in Egypt, Cameroon, Haiti and Burkina Faso,” he told reporters in New Delhi.
Five people have been killed in a week of demonstrations in Haiti over high food prices in the poorest country in the Americas, while unions in the West African nation of Burkina Faso called a general strike over soaring food and fuel costs.
“There is a risk that this unrest will spread in countries where 50 to 60 percent of income goes to food,” Diouf added.
He said world cereal stocks were enough to meet demand for eight to 12 weeks, while grain supplies were at their lowest since the 1980s.
People have asked me “Are we going to see things like bread lines and soup kitchens in the US?” Honestly, I believe we’re going to see more folks go hungry not just here but worldwide as well. The problem is magnified in the already most unstable parts of the world economy. We are seeing food riots and mass protests across the developing world. These will only continue to get worse.
And the policies of the Bush Administration are at least a partial cause. When our economy started to break down, it damaged the most fragile parts of the rest of the world as well. We’re not the only folks hurting here. Not by a long shot.
The Bush Administration’s implied goal of wealth transfer from the middle class to the richest Americans has been duplicated globally. The poorest world citizens, those who spend half their income just on food, are the most vulnerable to the results of these policies.
Inflationary pressures in places where there’s no deflating housing bubble to counteract it still wreaks economic havoc, and the bottom line of that is increasingly short supplies of food staples. They aren’t just nebulous commodities to be traded to billions of the world’s poor.
Nations are under intense pressure now to hoard rice in order to meet local demand. There’s far less import/export trade. Just like banks are hoarding money to fatten up their bottom lines, countries are doing anything they can to fatten up their rice stockpiles…or they could face serious consequences. The result? Rice gets even more expensive as a rice-based version of the “credit crisis” has developed, a global run on rice prices is affecting billions worldwide, just as banks refusing to lend each other money drives up the cost of lending money for those who do.
And in places where food shortages are in unstable countries, these policies are a national security issue as well.
North Korea’s rising tensions with South Korea and the United States, coupled with soaring international grain prices and flood damage from last year, will probably take a heavy toll among famine-threatened people in the isolated country, relief experts said Thursday.
The warnings followed a report Thursday that the totalitarian regime has suspended food rations for six months in Pyongyang, home to the country’s most well-off and loyal citizens, in an apparent move to save food as the hard-line regime braced for a prolonged standoff with Washington and Seoul over the North’s nuclear program.
Although the state ration system has not functioned well in recent years, the suspension of rations will force Pyongyang citizens to buy food with their own money or use any private stockpiles.
The World Food Program, which runs an office in Pyongyang and has been warning of worsening food shortages in the North, could not immediately confirm the report, which was released by the Good Friends, a relief group in Seoul that collects data from informants in the North.
“But certainly we are as concerned as others are over the present situation in North Korea,” said Paul Risley, Asia spokesman for the United Nations agency. He said that the situation is “probably worse” than last year.
Keep in mind many of the countries Bush considers “terrorist regimes” are countries that will be affected the most by massive food price inflation and shortages. When the US dollar is the world’s reserve currency used for international trade and the dollar is plummeting, it affects many, many things down the line.
Do the terrorists really need another reason to hate the imperial policies of the US right now? What better recruiting tool than to say “The imperialists are responsible for why your family can no longer afford food.” it may not be true completely, but it’s a compelling argument when you are seeing your family starve because the price of food has doubled.
Our economic mistakes of the last several years are causing problems for the entire planet. These problems may explode worldwide and very soon.
Certainly, it’s food for thought.