The Professor looks at the recent run-up in food prices and and the various explanations — it’s the speculators, it’s the general commodity boom, it’s the Federal Reserve (seriously, that’s the right-wing meme du jour) — and comes to an unshakable conclusion. It’s the planet.
We’re in the midst of a global food crisis — the second in three years. World food prices hit a record in January, driven by huge increases in the prices of wheat, corn, sugar and oils. These soaring prices have had only a modest effect on U.S. inflation, which is still low by historical standards, but they’re having a brutal impact on the world’s poor, who spend much if not most of their income on basic foodstuffs.
The consequences of this food crisis go far beyond economics. After all, the big question about uprisings against corrupt and oppressive regimes in the Middle East isn’t so much why they’re happening as why they’re happening now. And there’s little question that sky-high food prices have been an important trigger for popular rage.
So what’s behind the price spike? … But the evidence tells a different, much more ominous story. While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.
But while that’s the headline, the way he gets there is important. Since all those other “it’s the …” arguments do have a case (except for “it’s the Fed”). The questions are, What role does each play, and why is that role not the decider?
I’ll let you read the rest to get the evidence; his argument is strong. Yes, there’s a commodity boom, but food prices are late-surging, as this related blog post shows. Associated bad-harvest data is detailed here. And here he deals with the speculation argument; the signature of a speculation-driven market is lacking. Unlike say, copper, food stocks are currently low and falling. After all, futures contracts don’t themselves change physical inventories.
The Professor’s argument seems definitive, though the (well paid) deniers will scream:
The usual suspects will, of course, go wild over suggestions that global warming has something to do with the food crisis; those who insist that Ben Bernanke has blood on his hands tend to be more or less the same people who insist that the scientific consensus on climate reflects a vast leftist conspiracy.
But the evidence does, in fact, suggest that what we’re getting now is a first taste of the disruption, economic and political, that we’ll face in a warming world. And given our failure to act on greenhouse gases, there will be much more, and much worse, to come.
Let me add that by “worse to come” he’s got his opening in mind — the relationship between the brutal impact of sky-high food prices on the poor, and uprisings.
Well done, Professor. It may (or may not) be too late to turn the ship, but the guys who kept us on course for collision are still around. Time to address them directly?