All Global Warming All The Time
I notice that Paul Krugman KNOWS why food prices are rising. Why, it’s Global Warming! Keep in mind that the Fed has been throwing new money all around the globe, and commodity prices tend to be much more sensitive to things like inflation, but Krugman knows better.
What’s behind the surge in food prices? The usual suspects have made the usual claims — it’s all about the Fed, or it’s all about speculators. But I’ve been looking at the USDA World supply and demand estimates, and what stands out from the data is mainly that we’ve had a huge global harvest failure.
Notice that Krugman does not even mention the fact that 40 percent of the nation’s corn crop goes to produce ethanol, the inferior fuel that government forces us to put into our cars. But why the crop failures? Krugman has the answer:
Why is production down? Most of the decline in world wheat production, and about half of the total decline in grain production, has taken place in the former Soviet Union — mainly Russia, Ukraine, and Kazakhstan. And we know what that’s about: an incredible, unprecedented heat wave.
Obligatory disclaimer: no one event can be definitively assigned to climate change, just as you can’t necessarily claim that any one of the fender-benders taking place right now in central New Jersey was caused by the sheet of black ice currently coating our roads. But it sure looks like climate change is a major culprit. And it’s not just the FSU: extreme weather elsewhere, which again is the sort of thing you should expect from climate change, has played a role in bad harvest around the world.
Back to the economics: if you want to know why we’re having a spike in food prices, the data suggest that the key cause is terrible weather leading to bad harvests, especially in the former Soviet Union.
One of the big ironies here is that during the era of communism, the U.S.S.R. blamed bad weather every year for crop failures. It looks as though Krugman is trying to pick up where Khrushchev, Brezhnev, and Gorby left off.
Krugman picks up the same theme in his Monday column, continuing his theme that the Evil Right Wingers are the Source of All Evil. First, he excoriates anyone who might thing that printing lots of dollars might have an effect upon commodity prices:
So what’s behind the price spike? American right-wingers (and the Chinese) blame easy-money policies at the Federal Reserve, with at least one commentator declaring that there is “blood on Bernanke’s hands.” Meanwhile, President Nicolas Sarkozy of France blames speculators, accusing them of “extortion and pillaging.”
Like Krugman’s predecessors who blamed bad weather for permanent bad harvests in the U.S.S.R. (because, after all, socialism BY DEFINITION cannot result in anything but freedom and plenty), Krugman tries to use the current events as a way to encourage the imposition of draconian government policies, this time to prevent Global Warming.
I hate to tell Krugman this, but he is not an expert on the weather. A Nobel does not give one Ultimate Wisdom, no matter what he and his friends at Princeton might think. In fact, Krugman might want to put on his economists’ hat (you know, the one the emphasizes opportunity cost, something he ignores, as it doesn’t fit his program of Inflation First) and ask what would happen not only of “cap and trade” were imposed as severely as the Princeton faculty is demanding, but also the effects of “food for fuel” around the world.
No, Krugman ignores the obvious and then demands that the bad harvests be used as a hook to impose government policies that will result in even worst harvests and real-live starvation. In other words, real economic analysis is not acceptable, not when one can worship the statue of Algore.
Check out the “Krugman in Wonderland” posts here the Disptach – click here
William L. Anderson is an author and an associate professor of economics at Frostburg State University in Maryland. He is also an adjunct scholar with the Mackinac Center for Public Policy as well as for the Ludwig von Mises Institute in Alabama.
Read more at “Krugman-in-Wonderland”
