Brett Arends published an incomprehensibly crass article in today’s Wall Street Journal calling on Americans to hoard food. Not because he expects a shortage, but because “food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund.”

This is exactly the sort of unconscionable speculative greed that turns a bad but temporary situation into an all-out crisis and famine.

I’m not against making money; I’m against starving other people to make money. Arends has the privilege and the luxury to direct millions of investors from his perch at the Journal, and with such a position comes a great responsibility. His words move markets, and he does not appear to appreciate the magnitude of what he is doing. He is telling his readers from his comfortable environs that some faraway people in poor countries are starving, and they can make a few bucks by making it worse for them.

We are experiencing record high prices for all manner of foodstuffs. Riots are erupting around the world (not that one would know this by following mainstream US news sources.) And Arends’ advice is to exacerbate the situation by hoarding — and not even to ensure that his readers can provide for their families, but because food will appreciate 2% faster than a money market fund. He is brazenly and openly calling for food profiteering and price gouging.

This level of cynical greed is shocking, even by the raw capitalist standards of the Wall Street Journal.

The Economist’s treatment of the food crisis, “the silent tsunami”, is as riddled with self-serving contradictions and convenient omissions as one would expect; and sadly, it is by far the most reasonable and balanced analysis to appear in the mainstream media. They cover the symptoms, but in uncharacteristic style stop digging before they reach the true root cause, our failed energy and “free trade” policies, predicated on massive petroleum imports and ongoing sacrifice at the altar of the multinational corporation. The food crisis is but a symptom of the larger disease: corporate profits now dictate social policy. We need to realign our energy policy away from merely serving the interests of large energy corporations and shift to government subsidized nuclear power, to provide cheap and clean energy for all.
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The Bear Stearns bailout has set off a wave of posts complaining of the moral hazard involved. Why should the taxpayers rescue an investment bank from its own greed and stupidity? Why should they not be allowed to fail? This is corporate welfare for the wealthy and powerful. Profits are kept private, and losses are socialized.

A bailout is, unfortunately, the lesser of two evils. I’m pretty sick of bailing large companies out with my tax money, but in this case, the alternative would be an economic collapse 100 times worse than the Great Depression. Bear Stearns indeed occupies a special position in the economy; they are indeed “too big to be allowed to fail”. What is lacking in the present equation is the great responsibility that ought to be required to hold such a special privilege and position.

If Bear is taking public money, then there needs to be a thorough and public investigation into the innards of their business and why they need public money to save them. Air out all their dirty laundry. The managers of Bear Stearns need to be held materially accountable for the actions that led to this point. I don’t mean a slap on the wrist for a few scapegoat “rogue traders”, I mean major public scrutiny of every single manager and department there, and major jail time for those who deserve it. The government needs to delve deep and look hard, and any wrongdoing uncovered needs to be used as an opportunity to set a severe example for other investment banks in the future. Such ought to be the price for their privileged status above the free market. Read the rest of this entry »

The three economic primitives are:

• energy
• time
• intelligence

At some level closer to metaphysics, energy and time perhaps consist of the same substrate; energy is merely highly concentrated time. In practical terms, in the context of Earthly economics, their properties are functionally different enough that it is reasonable at this level to use different terms to label them.

Energy, time, and intelligence are, as far as is known, all derived from extrinsic sources beyond the human ability to manipulate (e.g. energy comes from fossil fuels, sunlight, nuclear power; time simply appears in our experience; intelligence can be honed and refined, but not drastically altered.) The ultimate origin of value is thus unknown. Read the rest of this entry »