Economics and the like archives

World Wide Food Price Crisis

A few weeks ago I walked into my local supermarket to see that a 10 oz. bar of cheese was “on sale” for $5.39. I did a double take–maybe they meant two bars of cheese for $5.39. Generally, the sale on that brand of cheese is 2 for $4.00 or 2 for $5.00, but sure enough this was somehow supposed to be a sale. I’ve been complaining about this since last year–the cost of food is soaring. Last year, I could generally get out of the supermarket paying around $65-85.00 for two people, now I’m paying $90.00 or more. The higher prices seem to apply across the board–fresh produce, canned foods, flour/rice, and most dramatically dairy. Of course, I’m fortunate to be able to suck it up and pay the higher prices, but many lower income folks in this country and other wealthy countries are struggling, and in poorer countries, people are taking to the streets in protest because they are unable to feed their families.

A quick search of Google news indicates that we really are in a world wide food crisis. I’m not so sure that there is an actually shortage of food, but the crisis appears to be the cost. Some of the countries where people are struggling with soaring food prices, include–Afghanistan, Haiti, South Africa, Namibia, New Zealand, Ivory Coast, and numerous others. The situation is getting so serious that the United Nations (and the World Bank) weighed in last week :

The head of the UN World Food Programme has warned that the rise in basic food costs could continue until 2010.

Josette Sheeran blamed soaring energy and grain prices, the effects of climate change and demand for biofuels.

Ms Sheeran has already warned that the WFP is considering plans to ration food aid due to a shortage of funds.

Some food prices rose 40% last year, and the WFP fears the world’s poorest will buy less food, less nutritious food or be forced to rely on aid.

Speaking after briefing the European Parliament, Ms Sheeran said the agency needed an extra $375m (244m euros; £187m) for food projects this year and $125m (81m euros; £93m) to transport it.

She said she saw no quick solution to high food and fuel costs.

“The assessment is that we are facing high food prices at least for the next couple of years,” she said.

Ms Sheeran said global food reserves were at their lowest level in 30 years - with enough to cover the need for emergency deliveries for 53 days, compared with 169 days in 2007.

Several factors have been cited as causes for the food price crisis including: rising fuel cost, the shift towards biofuels (e.g. ethanol), population growth, the growth of capitalist economies, and weather patterns. The greatest criticism in the range of articles I read has been reserved for government subsidies for bio-fuels, specifically ethanol. Many feel that the shift to ethanol and bio-fuels is environmentally harmful, but now we can add soaring food prices and hunger to the list of arguments against bio-fuels1.

  1. If you want more information of about the food crisis, these graphs from the BBC website have useful information about the food price crisis. The only additional point I would add is that (see the chart of trade balances) while some countries like the US will benefit in the area of trade, I don’t think that the average American is benefiting from this. A few corporate farmers may be getting rich, but the vast majority of people are hurting. We’re not hurting anywhere near as much as poor people in poor countries.

It is time for “Best Single Post of 2008″ Koufax Nominations Yet?

Because I think I may have just read the winner.. Brownifemipower at La Chola riffs on the use and misuse of Audre Lorde’s famous comment that “the master’s tools will never dismantle the master’s house.” I’m not certain I agree with everything BFP says,1 but I agree with a hell of a lot if it.

BFP also gets at something I’ve been thinking about lately; the use of “we” on the left. Can Hugo and BFP — or BFP and I, for that matter — really be considered part of the same movement at all? I don’t think so; I’m too comfortable here in the house, drawing my comics. I might say supportive things about BFP’s movement, and hope she’s right and her movement wins in the end, but I won’t really join it.

Hat tip: The Silence Of Our Friends.

UPDATE: Just came across this post on Anxious Black Woman:

As the late poet Audre Lorde once wrote: “The master’s tools will never dismantle the master’s house. It may allow us to temporarily defeat him at his own game, but it will never bring about real change.” And that’s the real issue, isn’t it? What exactly is our long term goal here? Is it simply to ensure that black women have a seat at the table of power? One of us is already there (always looking at you, Condi!) yet here we are, pretty much in agreement that black women collectively are in a sad state when it comes to our political power. So, what has such tokenism done for us? Should our goal be to include as many of us at that table (which is why I’m all about how we can increase our numbers to begin with and why I would even bother with meaningful dialogue to raise the consciousness of those whose consciousness needs raising)? Or do we need to set up a different kind of table?

  1. I’m never sure what people mean when they refer to “the market,” for example — would a mixed-market economy like Sweden used to have be considered “the market,” for instance?

Congestion Pricing In London

“Congestion Pricing” is the practice of charging people more to drive in heavy-traffic areas during the most popular driving times; this results in less traffic congestion. Economist Johnathan Leape has an interesting report on how congestion pricing is going in London (very well, he says) and how it’s been made more progressive (using the taxes to subsidize public transportation).

The charging zone […] is defined by a ring of roads that provide alternative routes for through traffic, at no charge. For those who cross the boundary, the cost was originally set at five pounds (about $10) a day, with zone residents entitled to a 90 percent discount. In 2005, the rate was raised to eight pounds (about $16). […]

The border is enforced by video cameras, which were already common in London. Concerns about civil liberties have been diminished by the cameras’ effectiveness in reducing street crime. The cameras read vehicle license plates and a computer matches them against a list of those who have paid and those exempt (which, in London, includes emergency services vehicles, taxis, buses, low-emissions vehicles, and all two-wheelers).[…]

The impact of the scheme exceeded expectations. In the first year of the charge, traffic delays in London dropped by 30 percent, journey time reliability increased by 30 percent, and average speeds rose 17 percent, reflecting a sharp fall in traffic jams at intersections (the time spent traveling at speeds less than 6 mph decreased by one-third). The charge also changed who was using the roads: private car trips dropped by 34 percent, and trucks and vans by 5 to 7 percent, but bus, taxi, and bike trips all rose sharply. The overall impact was a noticeable improvement in traffic conditions. […]

By committing to plough all the revenues raised by the congestion charge into public transportation improvements, London has ensured that congestion pricing didn’t just improve mobility for car drivers who can pay the charge (the “Lexus lanes” problem) but also increased access to the city centre for everyone. […]

The higher cost of rush-hour car trips and increased bus travel speeds, due to reduced congestion, result in increasing passenger numbers and falling average costs — which, in turn, lead to improved service levels and lower fares that stimulate further shifts to public transport and additional reductions in congestion.

Via Common Tragedies.

Daily Show Writers on Writers Strike

From A Tiny Revolution, the Daily Show writers explain the premises of the writer’s strike with their usual flair and humor.

Does Megan Think Liberals Don’t Pay Taxes?

Megan McArdle writes:

I don’t know why Matt should find this remarkable:

Still, the main psychological point remains that there’s a remarkable tendency to equate advocating that others engage in risky acts of physical violence with the idea of possessing courage and strength as personal characteristics.

After all, we’ve already internalized the notion that advocating taxing other people in order to give their money to someone else is somehow morally akin to charity.

I find the “taxing other people” argument — which conservatives and libertarians use frequently — bewildering. “I think people, but not me, should go to Iraq and risk death,” just ain’t analogous to “I think all taxpayers, me included, should pay for a generous safety net.”

In a followup post, Megan implies that liberals only favor using wealthy people’s money to pay for social programs. Poppycock.1 I’m hardly high-income, but I pay taxes. So do most liberals and leftists. And although liberals and leftists2 favor raising taxes on the wealthy, not all rich people are republican.3

Note also that SCHIPP, which is paid for from cigarette taxes, has received enthusiastic support from lefties — even though smokers are not an especially wealthy group.

Yet the idiotic “liberals want to spend other people’s money” idea is commonplace among conservatives .

  1. The word “poppycock” “is actually American in origin, first turning up there about 1865. The OED is silent on its origin, but most modern dictionaries know well where it comes from: the Dutch word pappekak for soft faeces.” ()
  2. ”L&L” — the newest sequel to Dungeons & Dragons! ()
  3. Incidentally, the overall tax structure in the US is flattish — the vast majority of Americans pay about 16% of their income in taxes, give or take a couple of percent. ()

Starvation in Malawi: Another Glorious Victory For Fundamentalist Market Worship

From Brad Plumer:

For the past 20 years, the World Bank and assorted Western governments have been telling Malawi how to conduct its affairs. Stop subsidizing crop prices. Curtail spending. Float your currency. And so on. More recently, in 2000, donors demanded that Malawi dismantle a fledgling program that subsidized fertilizer for poor farmers–who often can’t afford it on their own–on the grounds that the subsidies would make it impossible for a “solid agricultural market to develop.”

Well, it’s hard to flout the donors, and Malawi did as told. What happened next? Some 1,500 Malawians starved to death in 2002, and five million more needed emergency rations in 2005. So, last year, the government finally told its “advisors” to shove off and put the subsidies back in place. Two years of record surpluses followed, and Malawi is now shipping excess maize to Zimbabwe. As Toronto’s Globe and Mail tells it, the subsidies have worked wonders; they’re far cheaper than importing food aid; and even the EU has reversed its stance and pledge to underwrite the fertilizer coupons.

And from The New York Times:

Bank policies in the 1980s and 1990s that pushed African governments to cut or eliminate fertilizer subsidies, decontrol prices and privatize may have improved fiscal discipline but did not accomplish much for food production, the evaluation said.

It had been expected that higher prices for crops would give farmers an incentive to grow more, while competition among private traders reduced the costs of seeds and fertilizer. But those market forces often failed to work as hoped.

“The whole thing was based on the idea that if you take away the government for the poorest of the poor that somehow these markets will solve the problems,” Professor Sachs said. “But markets can’t step in and won’t step in when people have nothing. And if you take away help, you leave them to die.”

Professor Easterly said the bank’s managers had made elementary mistakes. “It was a simplistic, Economics 101 lesson, that if you raise prices, farmers produce more, which makes sense if farmers have roads, access to credit, good access to fertilizer markets,” he said. “But most of the time, farmers were lacking those.”

Economic Consequences Of The Slave Trade on Africa

From Dani Rodrik:

The slave trade, whereby able-bodied Africans were shipped to other parts of the world and sold into slavery, was a despicable economic institution for sure. But did it also have long-run effects on the economic development of African countries? Yes, is the surprising answer of Nathan Nunn (pdf link):

I construct measures of the number of slaves exported from each country in Africa, in each century between 1400 and 1900. The estimates are constructed by combining data from ship records on the number of slaves shipped from each African port or region with data from a variety of historical documents that report the ethnic identities of slaves that were shipped from Africa. I find a robust negative relationship between the number of slaves exported from each country and subsequent economic performance. The African countries that are the poorest today are the ones from which the most slaves were taken.

Nunn is careful to try to rule out reverse causation: he finds that the regions from which slaves were taken were, if anything, the more developed parts of Africa at the time.

The most likely explanation for the result? “[The] procurement of slaves through internal warfare, raiding, and kidnapping resulted in subsequent state collapse and ethnic fractionalization.”

There’s some interesting discussion in the comments there, too.

Cartoon: Free Trade

Free Trade

Stand Down Margaret

I sleep walk.

I don’t actually sleep walk - I sleep run. I have these dreams where a bomb is about to go off in my flat and I have to get out now. So I get out of bed and run out of the house. These dreams come in different intensities, but at their worst I know I’m about to die, and I’m terrified of that death.*

When I was small I lived in Thatcher’s Britain, the Britain of Protect & Survive. I was terrified of bombs. When we moved to New Zealand I was five, and I listed one of my favourite things about this country that their were no bombs.

I don’t think my terror dreams come from those years in Britain. I think they’re a stress or anxiety response. But I think it’s because of Margaret Thatcher and her pals that I dream of bombs. If I lived in different times I might be running from Wolves, or communists. I’d probably be just as scared, but that’s small consolation when I can still taste the adrenalin from believing that I was about to burn to death.

As far as Thatcher’s casualties go - my experience is nothing. The miners lives weren’t ruined in their dreams, they were ruined in reality. While she never dropped a nuclear bomb, she did drop other bombs. Her economic policies led to redundancies and unemployment - those aren’t just abstract ideas - they kill people. Poverty kills, hoplessness kills - the year after the miner’s strike saw many more than the usual number of suicides. It’s not just economic policies either Section 28, passed by the Tories, made it illegal to promote the teaching in state schools “the acceptability of homosexuality as a pretended family relationship.”

So when someone responds to me posting the lyrics to Merry Christmas Margaret Thatcher with: “Nothing Margaret Thatcher did is worth hoping for her death” - that really depends on what, and who, you value. People have died because of Margaret Thatcher.

I don’t think individuals are the driving force for politics, if Thatcher hadn’t been there, it would have been someone else. I don’t particularly hope for her death any more, she’s old and out of power, and probably a little bit out of it anyway. But when she does die you better believe that I’m going to celebrate. I’m going to dig out my parents old anti-Margaret Thatcher t-shirt and put it on, I will play anti-Margaret Thatcher songs all day, and I will write a post on this blog, maybe about Women Against Pit Closures.

My favourite phrase in Solidarity Forever is ‘we will break their haughty power’. The power to ruin people’s lives by remote control and sit back with a cup of tea is a haughty power indeed. To suggest that people shouldn’t be angry about what is done to them, and other people, shouldn’t be angry at that haughty power, is telling them their lives don’t matter.

Universal Health Care & Personal Health Concerns

On a pandagon thread about socialized medicine, a commenter called Catty writes, “I know 2 die-hard libertarians that are now universal health care supporters. Funny how problems like multiple sclerosis and cancer can change people’s minds.”

I have always supported universal health care, but jesus fuck she’s right.

A couple weeks ago, I started having some strange symptoms. Last week, I went to the ER to speak to a physician, and she said the things I didn’t want to hear — namely, that my symptoms were consonant with two bad diagnoses: diabetic neuropathy and multiple sclerosis.

I have since been to my regular physician who is not nearly so concerned. I am still being checked for diabetes, but she’s holding off on the MRI to diagnose for multiple sclerosis for now. We’re first looking into other possible causes which are much more benign, such as hypothyroidism, advanced anemia, migraine, and anxiety.

I am an incredibly privileged woman. I’ve never been without health care. My health insurance is incredibly good. I pay $5 for doctor visits, and $5 for medications. I’ve always known that my health insurance was great, but I don’t think it’s ever really hit home for me how much uninsured people have to pay for their health care — not just going into debt, but going bankrupt, becoming homeless, and sometimes having to make the difficult decision to let themselves or their loved ones die from treatable illnesses.

Another commenter called Jodie relates the following story, “My 27 year old brother in law developed an intense headache on a Thursday, dx’d as brain tumor after an MRI, had surgery, went to intensive care, had chemo, and died prior to the next Thursday. Cost after insurance: $280,000 (at last count, I don’t think all the bills are in yet)… That bill was amassed in less than a week.”

Note: After insurance.

Other commenters discuss surgery for marrow transplants coming in at $250,000, refills for cancer drugs being in the thousands of dollars, a course of treatment for a major illness costing hundreds of thousands. Canadian commenters relate how relieved they are to live in Canada, after considering the ramifications of the major illnesses in their lives should they happen to have been American and uninsured. When a parent, a sibling, and another close relative are sick, often the whole family can’t find enough money to fund health care for all of them, even when they go into debt. They must choose bankruptcy or death.

Treatment for uninsured people is abominable. Uninsured people often have no choice but to obtain their health care through emergency room visits, which are phenomenally expensive. Pandagon commenters report paying $300-1,200 for emergency room visits, for things as routine as obtaining antibiotics for a bladder infection. One commenter notes that his $320 physical meant that he had to put off paying his bills for a month.

Facing debt, uninsured people often put off going to the doctor until their dieases have progressed beyond treatment. Worse, if they do go, they may be ignored. Pandagon recently reported incidents of uninsured people being left to die in hospital emergency rooms.

In the emergency room at Martin Luther King Jr.-Harbor Hospital, Edith Isabel Rodriguez was seen as a complainer.

“Thanks a lot, officers,” an emergency room nurse told Los Angeles County police who brought in Rodriguez early May 9 after finding her in front of the Willowbrook hospital yelling for help. “This is her third time here.”

The 43-year-old mother of three had been released from the emergency room hours earlier, her third visit in three days for abdominal pain. She’d been given prescription medication and a doctor’s appointment.

Turning to Rodriguez, the nurse said, “You have already been seen, and there is nothing we can do,” according to a report by the county office of public safety, which provides security at the hospital.

Parked in the emergency room lobby in a wheelchair after police left, she fell to the floor. She lay on the linoleum, writhing in pain, for 45 minutes, as staffers worked at their desks and numerous patients looked on.

Aside from one patient who briefly checked on her condition, no one helped her. A janitor cleaned the floor around her as if she were a piece of furniture. A closed-circuit camera captured everyone’s apparent indifference.

Arriving to find Rodriguez on the floor, her boyfriend unsuccessfully tried to enlist help from the medical staff and county police — even a 911 dispatcher, who balked at sending rescuers to a hospital.

Alerted to the “disturbance” in the lobby, police stepped in — by running Rodriguez’s record. They found an outstanding warrant and prepared to take her to jail. She died before she could be put into a squad car.

At the same hospital, in 2003, “20-year-old Oluchi Oliver waited hours to be admitted to the hospital with crippling stomach pains, according to his family. After 10 hours, he collapsed dead on the floor. No one noticed, his father, Akilah Oliver, said.”

I had a brief hiccup with my insurance coverage the day I decided to go into the ER, and it looked like I might not be covered at all. (Now, I’m covered by two health care plans.) I almost didn’t go in. My mother told me I had to go in, that they’d find a way to fund it if I were sick. We are extremely well-off for the United States, but I doubt that even we could find a way to pay $250,000 if I didn’t have insurance and needed a marrow transplant.

I’m watching my reactions as I read this Pandagon thread. I am so scared. I probably don’t have MS. I’m repeating this to myself as a mantra. My other mantra involves facts about MS. If I do have MS, I have all the indicators of a good prognosis. I am young, white, and female. If I do have MS, it’s extremely likely that I have the type that remits, instead of the type that progresses until you die. Hell, 15% of people who have MS never suffer a second attack.

And there are drugs! One of my fiance’s professors told him about two people she knows with MS, who were diagnosed in their thirties, and who now, in their fifties, have been kept symptom-free with drugs. I called one of my friends who is in medical school, and he told me to remember that both MS and diabetic neuropathy require lifestyle changes, but may not affect life quality.

Even in the worst case scenario, I’ll be okay. That’s not enough to keep me from worrying or being depressed, but it’s good news. Nevertheless, I’m a basket case as I wait for my blood test results.

I can’t imagine how much worse it would be if I didn’t know how I was going to pay for the medical expenses of my doctor visits, my blood tests, my MRIs, my visits with the neurologist and/or dietician. Without insurance, would I be able to afford those drugs that could keep the multiple sclerosis in check, preventing me from losing the use of my limbs, my speech, and my brain?

I don’t understand how anyone can oppose universal health care. A libertarian in that thread is spouting off strange talking points. Some are demonstrably false. Countries with socialized health care do not have more bureacracy than we do; they have less, because hospitals don’t have to deal with insurance claims. They don’t have longer wait times than we do. They don’t force patients into predetermined courses of treatment. The cost in taxes is more, but studies have shown that while taxes are higher in many countries with socialized medicine, the American middle class ends up screwed with their lower tax rate — because we have pay not only our taxes, but we also have to pay through the nose to privately fund things that countries like Sweden provide for free. We end up paying a huge amount more, just so we can claim that we have lower taxes.

One of his talking points is that he doesn’t feel he should be forced to help people who are less fortunate. Does he understand that he’s talking about people who will die without his help? Help that he will benefit from, because he as a middle class American would pay less if taxes were higher but provided more services? Someday, he may have a medical emergency, and god forbid he should be denied his insurance. He may bankrupt himself and his whole family. If he chooses to finish treatment, he might lose his home. We might force him, as we force others, to choose between the basic necessity of shelter, and death.

Meanwhile, he can’t even imagine those scenarios. Over and over again, he talks about the undue burden taht would be placed on him if he had to help other people. He can’t imagine himself in their shoes. If he can imagine their pain, he doesn’t care. What a strange, frightening lack of empathy. What a limited view of the world.

My empathy is heightened right now, because of course this medical issue has me sensitized to issues of my own mortality. It’s odd to move from the life in which I thought of myself as healthy, to the life a few days later when I realize that I could have a progressive and debilitating illness.

I don’t want to be going through this. I want to feel safe and well again. Hopefully, my diagnosis will be benign, and soon I will be feeling safe and well again. Even if I have MS, I am sure that eventually my sense of weakness, fear and vulnerability would dull, and my illness would become just another part of my life. That’s another thing I’ve been repeating to myself for the past couple weeks. Studies show that paraplegics are just as happy one year after their injury as they were before it occured. People are amazingly adaptive; anything can become ordinary. If they are equally happy after that, then I will surely be equally happy even if my diagnosis is MS.

I am so amazingly lucky to be worrying only about my health. If I were worried that I was about to bankrupt my loved ones, and that I wouldn’t be able to afford life-saving care, this painful experience would become a constant waking nightmare. Any person who would wish that on other people is both monstrous and lacking in empathy.