Re: Shortage

1

I think you actually see food riots*--or even staple food riots--a fair bit in various countries. I don't know why this doesn't come up more.

*"Food riots" might be overstating it, but not by much, I think.


Posted by: SomeCallMeTim | Link to this comment | 04- 9-08 2:57 PM
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Well, obviously Jesus would have miracled up some food. I don't see how that gives us direction in this crisis.


Posted by: JRoth | Link to this comment | 04- 9-08 2:58 PM
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What, for example, would Jesus have done?

Yeah, we do, but that hardly provides us any useful guidance.


Posted by: jms | Link to this comment | 04- 9-08 3:00 PM
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Damn it, JRoth. I take the time to find a link for you people, and this is what I get.


Posted by: jms | Link to this comment | 04- 9-08 3:01 PM
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Oh I don't know, it's pretty clear Jesus wouldn't have called Brownie, so there's some guidance.


Posted by: soup biscuit | Link to this comment | 04- 9-08 3:01 PM
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4: often brevity is the heart of pwnage


Posted by: soup biscuit | Link to this comment | 04- 9-08 3:02 PM
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It was lucky timing (well, that and brevity). I wasn't even online at 2:56.


Posted by: JRoth | Link to this comment | 04- 9-08 3:03 PM
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4: it is a sad, but often true, fact that when one commenter (so witty in their own head!) has taken the time to really do an exceptional job writing -- and indeed, researching, composing, revising -- a particularly sterling comment on a given topic, well often enough in this case some other scoundrel will have written a nothing little breeze of a comment, lacking in all the thoughtfulness and care of the aforementioned opus -- and posted in just as quick as that, resulting in the former (by all other measures superior) commenter being, as they say, pwned.


Posted by: Sifu Tweety | Link to this comment | 04- 9-08 3:05 PM
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D'oh!


Posted by: Sifu Tweety | Link to this comment | 04- 9-08 3:05 PM
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What, for example, would Jesus have done?

Well, that's kinda situation dependent. On at least one day, he'd have just hung there bleeding.


Posted by: apostropher | Link to this comment | 04- 9-08 3:10 PM
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Staple production is controlled in many countries, with attendant price ceilings and export controls, certainly in Egypt. Far from the whole story, but a dimension not to neglect, since price ceilings create shortages. Amartya Sen has a lot to say about the economics of famine, which from his description is not the same as the economics of shortage.


Posted by: lw | Link to this comment | 04- 9-08 3:12 PM
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Don't forget how biofuels incentives are changing what the farmers plant. Wheat acreage way down.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 3:17 PM
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12: Yeah, that boondoggle is going to have an effect. Any really significant shortage in feedstocks will be much worse, too.


Posted by: soup biscuit | Link to this comment | 04- 9-08 3:22 PM
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It's not that they're starving, it's just that they are unwilling to pay the cost of the food. Let the market do its work.


Posted by: Gonerill | Link to this comment | 04- 9-08 3:28 PM
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Staple production is controlled in many countries

I heard this is why the Soviet Union collapsed. An inefficient and corrupt supply chain led to shortages and meant that people could never keep their papers in order, which dealt a major blow to productivity.


Posted by: mano negra | Link to this comment | 04- 9-08 3:36 PM
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I'll just link to Newberry again, because that is what a disciple, a whirly-eyed acolyte does, bore others with fervent repetition.

Let Them Eat Cake

With the failure of Iraq comes a global inflation. This global inflation is more dangerous than people realize, because it is striking at the food supply. One reason for the "Great Complacency" of the Nixon-Reagan-Bush era is that food has been globally cheap. Starving people don't rebel, well fed people don't rebel. People who are used to being fat and happy and have missed a few meals, are grouchy and have a reserve of energy to rebel. The nominal rise in food prices in the US has been 5% - but this is not the story. Looking at staples, the inflation rate of food has been double digits. Let them Eat Cake

hilzoy posted on food riots in Pakistan, blaming mostly ethanol production, I think. The most recent relevant thread at Thoma's had a couple commenters blaming the Fed, but they were ignored in favor of apocalyptic Greenery. Umm, James Hamilton at Econbrowser has been following the general commodity price spike (can we blame bauxite and copper prices on ethanol?).

Last night the roommate just shrugged and said: "Of course Republicans want to starve the poor to death" and went back to the SF Channel. She makes me look like Pollyanna or huggybear Obama.


Posted by: | Link to this comment | 04- 9-08 3:44 PM
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16:Guess who?


Posted by: bob mcmanus | Link to this comment | 04- 9-08 3:45 PM
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12:Hmmmm...I guess hilzoy is psychically attached to Republican talking points, all the way from Karachi.

Mustn't blame Greenspan or Bernanke, we are gonna need their reputations intact to kill the welfare state in the next administration. No, you have no fucking idea how fucked we are, how we are being fucked.

I know, we can blame the War!

It's all connected. It really is, just paranoid to say so publicly.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 3:53 PM
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Bob. you are not the only one reading http://www.nakedcapitalism.com/

and http://calculatedrisk.blogspot.com/

20%- 50% drop in housing prices still to come. Banks therefore severely under-capitalized, many bank failures. Think S&L meltdown.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 4:09 PM
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A sometimes overlooked consequence of rising fossil fuel prices is the impact on the cost of food production. The production, preservation, and transportation of foodstuffs itself consumes a lot of fuel in its own right. Plus, two of the major inputs to high-intensity cultivation--synthetic nitrogen fertilizers and naturally occuring phosphorus fertilizers--are sensitive to the price of fossil fuels (the former because it is derived from natural gas through the Haber-Bosch process, the latter because it is typically transported over very long distances from the barren areas where it is mined to the fertile areas where it is used).

The birthright to cheap food is no more sustainable than the birthright to cheap gasoline.


Posted by: Knecht Ruprecht | Link to this comment | 04- 9-08 4:10 PM
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Jesus, just the though of TLL being around makes my skin crawl. Why did I oppose Obama? Because he talks nice about Republicans, the motherfuckers who would starve and bomb millions so Bears Stearns get their bonuses. That is what they are, they play class war for keeps, with lethality and casual genocide.

I don't know, maybe six months ago Kotsko asked what the next bubble might be. I said canned food and water and ammo. I wasn't kidding. We may have been sent to a place where we won't care about the SS Trust Fund.

Forget UHC.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 4:12 PM
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20: We've been round this one recently. Food prices are sensitive to fossil fuel prices, sure, but how about actual supply problems? Particularly in north america, we've built an ag. system that is both massively dependent on fossil fuels, and that doesn't rescale well at all. What fun.


Posted by: soup biscuit | Link to this comment | 04- 9-08 4:13 PM
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I feel like walking the dogs in our Dallas tornado watch. Suits my mood. Carry on.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 4:15 PM
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23: I feel like walking the dogs in our Dallas tornado watch.

Livin' la vida loca.


Posted by: JP Stormcrow | Link to this comment | 04- 9-08 4:19 PM
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21. And here I thought that when the revolution came, Bob would spare my delicate skin in sort of a Schindler's List nod to Unfogged comity.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 4:19 PM
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20: We've been round this one recently. Food prices are sensitive to fossil fuel prices, sure, but how about actual supply problems? Particularly in north america, we've built an ag. system that is both massively dependent on fossil fuels, and that doesn't rescale well at all. What fun.

To play my old devil's advocate position, we currently seem to be wasting a huge amount of agricultural production capacity to make ethanol, and devoting another huge amount to feeding pigs and cows for meat. I'd like to think that if things went to hell we could/would redeploy those into producing food for people to eat, the history of Greenland as recounted in Collapse aside.

Why is it completely ludicrous to think this way?


Posted by: water moccasin | Link to this comment | 04- 9-08 4:29 PM
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12: Why did I oppose Obama? Because he talks nice about Republicans

You didn't oppose Obama because of this; it was a worse habit for his opponent. Don't bullshit.

16 is good, though.


Posted by: DS | Link to this comment | 04- 9-08 4:34 PM
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Bob, "huggybear Obama" is likely to offend people.


Posted by: Flippanter | Link to this comment | 04- 9-08 4:35 PM
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Karon's post is eerily reminiscent of the situation in Mexico in 1692. (If you want to know how that turned out, you might want to keep an eye on that blog. Some of the developments may surprise you.)


Posted by: teofilo | Link to this comment | 04- 9-08 4:39 PM
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26: It isn't, except that the system doesn't scale back well.

An awful lot of energy has been put into developing large scale efficient production of field corn #2, for example. Which has the problem that we can't eat it. Not only is this high yield stuff using an awful lot of nitrogen based fertilizer (fossils) and relying on a lot of automation (fossils) to grow on large acerages it is then shipped (fossils) and processed into food fo r us or animals, amongst other things. But the tricky part is, there isn't any drop in replacement for it. The land its' grown on has typically been damaged pretty badly by this process, and you can't grow any other crop at the same scale. So even if you break the same land up into less intensely farmed blocks you have topsoil problems lots of places and worse, you don't have enough farmers left (and some of those working today don't know much about less industrial processes). Simply put, agricultural production capacity is not transferable in a simple way. The industrial push has moved corn yields (of this sort, anyway) up 4x or 5x, but we fixated on corn because it can do this. Moving to less nitrogen intense approaches and/or another crop drops most of that gain.


Also, If I understand it, Ethanol is a little bit of a red herring, it's just putting upward pressure on a market that has been completely subsidized for decades, with lowering rates (pushing production up, and passing on the subsidy to processors/agribusiness). But in the face of actual shortage, pulling back on ethanol may be needed, but just puts more pressure on other areas. I need to check the total percentages though.


Posted by: soup biscuit | Link to this comment | 04- 9-08 4:44 PM
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I think JECDS needs to become the MEJCDS(McManus/Emerson/Jones Civilizational Despair Scale) in honor of Bob. Or perhapps the MCOAA (McManus Certainty of Approaching Apocalypse). When you're feeling particularly awful, you can say you're at 50% of MCOAA. One represents absolute certainty and should lead you to flee to Texas to join Bob in his bunker. But make sure to bring food and water or he may shotgun you.


Posted by: PGD | Link to this comment | 04- 9-08 4:48 PM
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What, for example, would Jesus have done?

Spent three days in hell and come back to throw a fish barbeque.


Posted by: Jesurgislac | Link to this comment | 04- 9-08 4:48 PM
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Bob is understating things, because he doesn't want to scare anyone. After the collapse of the housing, energy, and food markets comes the collapse of all currencies everywhere. Then the collapse of the barter system. Then language itself fails. At night, the ice weasels come.


Posted by: rob helpy-chalk | Link to this comment | 04- 9-08 4:49 PM
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At night, the ice weasels come.

but that's the best part.


Posted by: soup biscuit | Link to this comment | 04- 9-08 4:50 PM
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ice weasels

Delicious, if cooked properly.


Posted by: Ari | Link to this comment | 04- 9-08 4:55 PM
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Grandpa Beeblebrox, may I have a lightly grilled ice weasel with fries?


Posted by: Flippanter | Link to this comment | 04- 9-08 4:56 PM
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God, I wish I could find the original Groening cartoon on the web. And shrimp, plate of shrimp, by the way, as I was just flipping through my old Life is Hell books yeterday.


Posted by: Ari | Link to this comment | 04- 9-08 4:57 PM
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33: And then can we whip the horses eyes and make them sleep, and cry? Huh? huh? Can we dad? Can we?



Posted by: JP Stormcrow | Link to this comment | 04- 9-08 4:57 PM
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Is the Egyptian Revolution (tm) the Sarejevo incident of the next world war? Will the Muslim Brotherhood renounce Camp David and march on Israel? Economic meltdown may be the preferred choice.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 5:03 PM
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Will the Muslim Brotherhood renounce Camp David and march on Israel?

I sincerely doubt it.


Posted by: Jackmormon | Link to this comment | 04- 9-08 5:04 PM
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41

I finally read the Karon article. Not bad. There are of course, a lot of factors. I have said for years that Peak Oil would hit before Global Warming, and hit so hard in unclear ways that Global Warning won't be addressed without Revolution.

Moreover, when the source of that hunger is not the absence of food per se, but the invisible barrier of social inequalities that stand between poor people and the food supplies their poverty denies them, things can turn pretty nasty, pretty quickly. And that's precisely what we're seeing right now: As Josette Sheeran of the UN World Food Program put it last month, "We are seeing food on the shelves but people being unable to afford it."

Friedman was right about inflation being always a monetary problem. Maybe 20-30 percent of food/commodity prices are speculation. But expensive oil => ethanol => expensive food is also a monetary problem. Money available for McMansion sprawl and SUV's but not for alt-energy.

And I am talking about taking somewhere around 2 Trillion of annual GDP from private pockets to public investment. Fed Gov't revenues from 18% to 40-60%.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 5:44 PM
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I have a paper copy of the original cartoon (from one of the books, not a newspaper) around somewhere. Perhaps I should scan it and put it on line, so that people will have something to reference when they use the ice weasels quote.


Posted by: rob helpy-chalk | Link to this comment | 04- 9-08 6:25 PM
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Fed Gov't revenues from 18% to 40-60%.

Well, it is said that FDR staved off the revolution with the New Deal, so anything is possible.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 6:34 PM
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Friedman was right about inflation being always a monetary problem. Maybe 20-30 percent of food/commodity prices are speculation. But expensive oil => ethanol => expensive food is also a monetary problem. Money available for McMansion sprawl and SUV's but not for alt-energy.

This comment makes even less sense than the customary standard of Bob's economic analyses. Friedman's argument was exactly the opposite of what Bob ascribes to him: that supply shocks only result in inflation when they are accommodated by weak-willed or incompetent central banks.


Posted by: Knecht Ruprecht | Link to this comment | 04- 9-08 6:43 PM
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37: Here. No shrimp though.


Posted by: eb | Link to this comment | 04- 9-08 6:54 PM
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40. Perhaps not. More likely that the new Egyptian government recognizes The West Bank as the independent nation of the Islamic Republic of Palestine.


Posted by: Tassled Loafered Leech | Link to this comment | 04- 9-08 7:17 PM
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44:Where did I say something different about supply shocks? What supply shock? What argument, exactly, with a fucking clear cite, did I attribute to Friedman that was unfair?

Perhaps I should have expanded:speculation in oil => rise in ethanol prices => rise in food prices/futures.

Check out inventories. We are not in an oil shortage.

Okay calming down a bit:

Did you think Friedman was right about inflation being always a monetary problem contradicts that supply shocks only result in inflation when they are accommodated by weak-willed or incompetent central banks?

It doesn't.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 8:46 PM
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Or was it this ?

Money available for McMansion sprawl and SUV's but not for alt-energy.

Which is covered in 41.3. The fucking rich have too much money, as always. There is too much money out there, and too few investment opportunities.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 8:52 PM
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There is too much money out there, and too few investment opportunities.

It seems odd that the slave trade hasn't made more of a comback, doesn't it?


Posted by: Ari | Link to this comment | 04- 9-08 9:23 PM
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Bob, that's not Friedman's theory. Friedman believed in the "quantity theory of money". In Friedman's world, inflation was caused by central bankers increasing the money supply.

Friedman thought speculators were good because they made markets more efficient.


Posted by: Camille Paglia | Link to this comment | 04- 9-08 9:34 PM
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Bob, that's not Friedman's theory

Fuck why do people use unclear referents. What's not Friedman's theory? I am tired of these vague attacks.

I know this, and I never said otherwise.

Speculators are not so good in inflationary markets, and part of the problem was the opacity of the privately created money instruments.


Posted by: bob mcmanus | Link to this comment | 04- 9-08 11:28 PM
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