Krugman on the Crisis

"But there's another world crisis under way--and it's hurting a lot more people. I'm taking about the food crisis. ... There have already been food riots around the world. Food-supplying countries ... have been limiting exports. ... The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a 'scam'. ... You might put it this way: People are starving in Africa so that American politicians can court votes in the farm states. Oh, and in case you're wondering: All the remaining presidential candidates are terrible on this issue. ... Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed", my emphasis, Paul Krugman (PK) at the Houston Chronicle, 8 April 2008.

I agree with PK about ethanol and note the inventory shortfall is consistent with just-in-time inventories, see my 23 July 2007 post. Does mankind ever learn? A fellow named Joseph supposedly lived about 3,900 years ago and explained Pharoah's dreams about the seven fat and lean cows and seven heads of good and bad grain, see Genesis 41. Who would store grain for seven years today? What would Joseph and Pharaoh think if they came back today?