Paul Krugman has caused quite a stir with his claims that the riots in Egypt are the result of:
global warming > causing bad weather > causing crop failure > causing increased food prices > causing riots.
It’s rather circular logic IMHO, and one that isn’t supportable by the data at hand.
First, there is a piece, Debunking Krugman: NYT’s “Soaring Food Prices – Blame the Weather”. The author, who is open to the possibility that global warming might be problem, shows that Krugman knows not of what he speaketh. As she says, “This is so far off base, Paul Krugman, I hardly know where to start.”
Andrew Bolt has a very good piece in which he reminds us that “food production is in fact at near-historic levels and the Egyptian regime actually keeps food prices pretty stable through massive subsidies.”
So food prices probably did not trigger the problems in Egypt. In fact, because of subsidies that keep bread prices constant at low levels, many poor folk are favorably inclined toward the current regime.
Also, on Pielke, Jr’s website, Richard Tol reminds us that IPCC reports tell us that for modest global warming (of the order of 1 to 3 degrees C, I believe) , global food prices may decline. And this is despite the fact that, as shown at WUWT, negative Socioeconomic Impacts of Global Warming are Systematically Overestimated, while positive impacts are underestimated. (This is in two parts; Part II is here).
Pielke Jr. has this graph on his website to speak to the issue:
Note the spike in prices 1972-1976. The food crisis in the 1970’s wasn’t driven by weather either.
During that 70s food crisis, many of the same arguments were made that are being made today:
“We’re running out of food! People in (enter random developing country name here) will starve! There’s unrest in the third world!”
Remember this? From Wiki:
Erlich’s The Population Bomb was a best-selling book written by Paul R. Ehrlich and his wife, Anne Ehrlich (who was uncredited), in 1968.[1] It warned of the mass starvation of humans in the 1970s and 1980s due to overpopulation, as well as other major societal upheavals, and advocated immediate action to limit population growth. Fears of a “population explosion” were widespread in the 1950s and 60s, but the book and its charismatic author brought the idea to an even wider audience.[2] [3] The book has been criticized in recent decades for its alarmist tone and inaccurate predictions.
Well we all know how those predictions turned out.
Thanks to Indur Goklany, who contributed to this article.
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R. de Haan says:
February 8, 2011 at 2:09 am
“This graph shows that it wasn’t climate change that caused the price hikes but CO2 policies, the grand scale conversion from food crops into bio-fuels.”
Ron, this is an accidental correlation. as both are strongly correlated with the price of oil.
The asset price bubble is in itself mostly a consequence of monetary easing, starting under Clinton/Greenspan (Clintonomics), when the policy started to solve every crisis and non-crisis by massively increasing money supply.
Remember ? NINJA credits, Mexico crisis, Asia crisis, Long-Term Capital Hedge fund crisis, Year 2000 pseudo crisis, Nasdaq bubble, housing bubble, and now the everything bubble.
Promotor of all this: KRUGMAN.
He is playing in one league with guys from North Korea, Venezuela or Iran.
I am puzzled by Kalpa’s blog, linked by Anthony, claiming that there is no wheat price problem in Egypt caused by weather.
[snip – then be puzzled and comment at her blog, but don’t waste our time here with arguments about her blog – Anthony]
Getting back to population growth. There is a lot of new info that apparently has not reached the masses (notably because it is good news, so the MSM does not report it):
– Population will peak shortly after 2050 to around 9 billion. It will drop rapidly thereafter. By 2100, population will drop to about 7 billion, roughly where it is today.
– 20 years from now, there will be 100 million LESS people than today in the 18-29 age group in China. In 10 years, the number of working age people in China will start dropping. This is why labor rates are increasing in China and/or workers demanding more pay at factories (recently in the news).
– The only countries of significance that have high birth rates (greater than 2 kids) are India, Indonesia, Brazil, Saudi Arabia, etc., but even their birthrates are dropping due to urbanization and higher standards of living.
In short, population is NO longer a problem. Providing energy for a growing global middle class is a problem. The solution to decreasing birth rates is to increase the size of the middle class, which requires energy, so by producing more CO2 (via energy production) actually helps the planet, not make it worse.
Here you go eadler, I call bullshit on your comment, Krugman wrote:
“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.”
He’s clearly trying to link severe weather to global warming aka climate change and then link it to the riots.
Inflation in commodity prices consequent upon QE (Krugman approves of QE) as commodities are still traded largely in dollars (just)…reserve currency and all that.
Global inflation as a result of financial policy to avoid debt deflation not global warming/climate change/climate disruption is at play here.
Krugman is a blind ideologue :
http://www.americanthinker.com/2010/06/paul_krugman_the_self_contradic.html
Apparently the AT article is no longer available – sorry , it was pretty amusing .
Many commenters have correctly stated that food prices are a result of supply and demand, often subject to market manipulations in the many areas of the world where free markets are constrained by politics.
Another factor to consider is that food demand is inelastic; that is, there is a ceiling. If food prices dropped suddenly, a well-fed person would not automatically buy more. You can only eat so much food. That is not necessarily true of many other commodities where consumption has little or no ceiling other than price.
Excess food production generally goes to waste. Recently we have seen the conversion of corn to ethanol, but that has not diminished the food supply because it is excess corn. Similarly, the use of corn as animal feed has not diminished the supply of human-edible corn. Farm production responds to demand, and is limited by the food ceiling. If other uses (besides direct eating) of food crops arise, increased production results, but not the diminished production of edible food.
Over-production of food is a chronic problem in the modern farm sector. Our farm subsidies are often payments-in-kind for NOT growing food — designed to keep food prices from dropping too much and bankrupting farmers.
Market manipulations are a common practice. They are generally designed to concentrate food production in the hands of a few. It’s a monopoly strategy. Egyptians and others who face rising food costs are victims of monopolists and other food supply manipulators, not a collapse in farm productivity. Worldwide, farm production is constrained by demand, not by essential agricultural productivity. We are nowhere near the upper limit of farmers to produce food.
Wrong wrong wrong…the problems in Egypt are financial in origin. It all started with a Pyramid Scheme!
(apologies for the joke regarding a serious matter)
P Walker, it’s still there:
http://www.americanthinker.com/2010/06/paul_krugman_the_selfcontradic.html
Please let me continue your observation above: I hope others will contribute as well.
“Fresh Food” (fruit and vegetables most certainly) has almost what would be an inverse inflation-quality-quantity price relationship during their short shelf lives.
When the quantity is highest, the store managers can (and do!) “select out” the poor quality fruit (spoiled, off-color, slightly squished or bruised) and keep those in the back out of sight. The reslulting “batch” out in the supermarket floor in the display boxes then has the best quality displayed and the “maximum quantity that can fit in the aisle” for the next few days. (As the displayed items are bought, more are brought out from storage, but the amount of boxes displayed doesn’t vary: the boxes are joust reloaded. After a few days/weeks, the reserve in the back goes away, and the store managers have to stop +pre-selecting” the good ones. A few more days, and they have to display the poor fruit and keep the blemished and handled fruit out in the display boxes.
Quality (because quantity of the fruit has also gone down) goes down, but there are no replacements available, and the customers “have to” be “just happy to get anything at all” and prices goes up.
Harvests of non-perishable foods are a bit different – more subject to the government and mega-business monopolies in the shipping, storage, initial consumption (first level processing like mills and mega-bakeries and cookie makers and noodle factories) you mentioned.
Take grains for example: Harvesters MUST follow the crops. They MUST get the wheat/rye/rice/barley/corn/sorghum/ etc as the climate dictates. No choice, no delays, no waiting. “You snooze, you loose the whole harvest for that year.”
So there is an immediate, drastic overload of supply at each region as the harvests come in, but no respite for the farmer or harvester: they cannot “wait a few months” (for prices to go back up)”. Once in the silos, the grain can wait “safely” in the advanced western world where rats and spoilage and loss is significantly less than in “open piles” in poorer regions WHERE the CAGW alarmists don’t WANT cheap concrete, enough energy to process the harvested foods, ship them, load them, store them, chemicals to preserve them, isolate them, disinfect them, spray against insects, etc.
But that same mass storage isolates the first-level food consumer (mass bakeries or huge factories making soup, noodles, mac-and-cheese, flour, etc.) from the demand cycle.
Now, the huge factory consumers are large enough that THEY control when THEY buy and a national transportation network lets THEM decide where and who they buy from. So, in that way, they control prices paid out. Once the silo’ed harvest is in the silo, the ultimate price that the final consumer pays is separated from what the farmer gets by the mass-production costs and storage systems AND savings! of the big producers.
Small, non-mass-production systems – supposedly like Egypt?
Mike D. says:
February 8, 2011 at 11:38 am
“Excess food production generally goes to waste. Recently we have seen the conversion of corn to ethanol, but that has not diminished the food supply because it is excess corn. Similarly, the use of corn as animal feed has not diminished the supply of human-edible corn. Farm production responds to demand, and is limited by the food ceiling. If other uses (besides direct eating) of food crops arise, increased production results, but not the diminished production of edible food.”
=======================================================
Mike, you’re repeating the same as many others. It isn’t true. Please refer to the links I provided in my post above. Please note the increase of corn production vs the increase of corn used in ethanol. Also note the increase prices of cattle feed from corn. From 2003/04 we’ve increased corn production by over 2 billion bushels, however, corn used in ethanol has increased by 5 billion bushels. We’re using excess food? What, did people quit eating? Has the world’s population diminished since 2003/04? Further, as one of my links clearly shows in deference to corn, alternative crops have diminished production. Sorghum, barley and oats have decreased by hundreds of millions of bushels…….now are we still selling excess for ethanol?
From the USDA, “Higher grain prices and reduced demand push cattle inventories down through the start of 2011 and result in U.S. beef production declines in 2009-12…….”
“Pork production in 2010 is expected to be down 2.7 percent from 2009 and to continue to decrease through 2011 in response to high feed prices.”
So, let’s recap, demand for corn has increased causing price jumps. Corn used for ethanol has out paced corn production by 3 billion bushels in the last few years. Other commodities, while yield per acreage has increased, total volume produced has decreased, furthering a decrease in food availability. Also, the pricing in corn has made it more expensive to raise cattle and hogs. Which also further decreases the total food availability. The world isn’t suffering from too much crop production.
It may be that my perspective is formed by events of my youth. It was required, in my father’s house, to eat everything that made it onto one’s plate. As a child, during supper, when confronted with a food I wasn’t particularly fond of, it would be typical of me to pick at my food and procrastinate my eventual eating. This action would provoke an admonishment from my father. It would always be the same. “Don’t play with your food.” This has stayed with me through adulthood and beyond his time on earth and for some reason, this discussion conjures this memory and admonishment. Don’t play with your food.
rising CO2 causes aging with 100% correlation … the end is near …
bikermailman ,
Thanks . Don’t know what happened – when I checked the link I got the Oops page . Same URL too .
eadler says:
February 8, 2011 at 9:56 am
Once again this straw man argument is repeated. Krugman never said that crop failures were caused by global warming. You are twisting what he said to make a straw man argument you can refute.
Then why is Krugman even mentioning “food prices” at all in the context of “climate change”, “extreme weather events”, and climate change “warming”, which moves his whole probability distribution “to the right”?
Without “food prices” mixed in, Krugman’s little lecture on the “obvious” – as he admits it is – is not worth writing about, and he knows it!
So that, instead, eadler, the case against Krugman, et al., is much worse: the real “cash value” of Krugman’s article is to once again promote the “we don’t need no stinking facts” propaganda meme that Krugman, Obama, Holder, Napolitano, etc., have been reiterating now for quite a while, in order to suggest and even teach that people everywhere don’t need to be able prove what the “annointed ones” with their multiple unhinged propaganda memes have been telling them: everyone is encouraged to “just know” what the “truth” is beyond what is contained in an article or an event, including weather events!
No thanks, eadler, you and your fellow cultists can have this dead-ender “perception is reality” PNS delusionalism. Still, for whatever it’s worth to you, according to a rational scale Totalitarianism is not really progressive.
Why is it the same people keep posting the same mis-information about ethanol.
EM Smith provided the real reasons we are seeing higher prices. In fact, if you go back several months he made a post informing everyone this was going to happen and even giving some good buys.
When will people finally understand that ethanol production produces a significant amount of “food” after the oil is removed. It can be used to replace what previously would have been corn-based anyway. A good example is chicken food and distillers grain.
http://en.wikipedia.org/wiki/Distillers_grains
Most corn production has always ended up as livestock feed. Removing a little oil before using the grain for the same purpose has only a small impact on prices.
Yeah, I know, this has already been posted here many times before and it will be ignored this time too.
Anthony says,
First, there is a piece, Debunking Krugman: NYT’s “Soaring Food Prices – Blame the Weather”. The author, who is open to the possibility that global warming might be problem, shows that Krugman knows not of what he speaketh. As she says, ”This is so far off base, Paul Krugman, I hardly know where to start.”
Krugman is not at all off base.
Wheat prices increased 50% during 2010.
http://www.indexmundi.com/commodities/?commodity=wheat&months=12
In fact, food has been a source of protest in Egypt. Only the neediest receive subsidized bread and it is in short supply.
http://www.xe.com/news/2010-10-22%2012:12:00.0/1476293.htm
Egypt and other Middle East countries are stockpiling food because of the expectation of shortages.
http://www.telegraph.co.uk/news/worldnews/middleeast/8288934/Why-Egypts-government-is-stockpiling-food.html
…The latest unrest in Egypt is blamed in part on rising wheat prices, which have squeezed poor Egyptian households. Forty per cent of Egypt’s population survives on less than $2 a day.
…
In October, the government announced additional spending of £400 million to bolster reserves and keep a lid on prices as the Egyptian pound weakened, making food imports more expensive.
Earlier this month, government buyers announced they had bought 175,000 tonnes of wheat from the US and Australia, providing further insulation against public anger.
That leaves the country with about six months’ supply.
That has not been enough, though, to prevent three people setting themselves on fire and thousands protesting against President Hosni Mubarak’s government. High food prices are among their grievances.
This price rise was sparked by drought in Russia, which totally stopped exporting wheat.
http://www.csmonitor.com/Commentary/the-monitors-view/2010/0806/Russian-drought-When-wheat-withers-the-world-squirms
Krugman didn’t make all this up.
In 1961 an 18oz box of corn flakes cost 27 CENTS! Now it costs about $3.00 which is consistent with about 5% inflation over 50 years.
The chart in the following link seems to disagree with the above food price chart,
http://www.ers.usda.gov/Briefing/Corn/background.htm
Perhaps the inflation adjustment is just different? I’ve heard of indexing prices using the CPI but what heck is a “BEA Annual Implicit GDP Deflator”, (I think that was the varmint that scurried across the road one night last summer and I accidentally ran it over.)
At any rate that link also shows, ( or http://www.ers.usda.gov/Briefing/Corn/Gallery/Background/CornUse.jpg ), the diversion of corn to ethanol production which most certainly puts pressure on all food prices. I heard that, thanks to ethanol, the USA now no longer has ANY significant grain reserve! If a major drought occurs the third world is going to starve and Al Gore is to blame.
Money has not vanished due to financial tricks such as QE and rock bottom (in the States real negative) interest rates. A dollar carry trade has emerged as the debt has been migrated onto the national balance sheet. Returns are so miserable plus uncertainty have caused a flight into commodities including grain. The last shop to close is always the food store.
Debt deflation has been staved off and inflation is the tax on cash balances by reducing the real value of debt.
This inflation (consequent upon policies Krugman espouses) is the direct cause of food price inflation in traded staples. The world food supply is not one of shortage. In fact the opposite. The Third World is importing this inflation and the poor, whom Krugman weeps crocodile tears for, are being directly and horribly effected.
Global warming has nada to do with it, nor have weather events to date.
I wouldn’t discount the conversion of crops to biofuels – it has taken a substantial amount of corn out of the food stock – Mexico can tell you all about it. And annual production numbers of corn demonstrate a significant loss due to ethanol. But as a number of the posters have ably noted, the more substantial issue is inflation due to grossly devalued currency, significantly in the US, but not exclusively so. Be thankful there is a glut of oil, that China has raised interest rates twice in about a month, and the US recovery is very shakey. This has quelled demand. And buffered the prices in oil.
James Sexton said:
“This has stayed with me through adulthood and beyond his time on earth and for some reason, this discussion conjures this memory and admonishment. Don’t play with your food.”
—————————-
I was similarly cautioned as a child, but a natural contumacy led me to disdain the advice.
I don’t quite understand the vehemence against grain for ethanol. Why aren’t we upset at tobacco farmers tying up the land with a product we don’t approve of? Or ginseng fields? Asparagus is a luxury. Veal, too, as we’ve often been reminded.
Tulip fields in the Netherlands have already proved their pernicious character.
Now, if you want to talk subsidies….
Richard M says:
February 8, 2011 at 1:02 pm
Why is it the same people keep posting the same mis-information about ethanol. ….A good example is chicken food and distillers grain.
========================================================
Sigh, I don’t know, but I’ll keep posting until people understand that it is costing us dearly………”Distillers’ grains, a coproduct of dry-mill ethanol production, can be used in livestock rations, partially substituting for corn and sometimes for soybean meal. However, distillers’ grains can more easily be used by ruminants (such as cattle) than by monogastric animals (such as hogs and chickens). ”
Please read the link I provided. http://www.ers.usda.gov/Briefing/Corn/2010baseline.htm
You see, by removing the “oil” you are significantly altering the feed and its value.
More from the link I provided…..”Corn used for producing fuel alcohol (i.e., ethanol) has grown sharply since the early 1980s. Production of corn-based ethanol has grown from less than 3 billion gallons in 2003 to nearly 11 billion gallons in 2009. As a result, fuel alcohol has become the largest component of the food, seed, and industrial (FSI) use category.”….. more…..“Ethanol wet mills produce corn gluten feed, corn gluten meal, and corn oil as coproducts, while dry mills produce distillers’ dried grains (DDG). The projections assume that each 56-pound bushel of corn that goes into dry-mill ethanol production results in 17.5 pounds of DDG as a coproduct.”<——— That's over a 2/3 loss…….more…..“Pork production in 2010 is expected to be down 2.7 percent from 2009 and to continue to decrease through 2011 in response to high feed prices.
From an earlier post, “Corn used for ethanol has out paced increase of corn production by 3 billion bushels since 2003/04.”
Look here at how ethanol is altering land use.
http://www.ers.usda.gov/Briefing/SoybeansOilcrops/Gallery/AreaCWS.gif and http://www.ers.usda.gov/data/feedgrains/Table.asp?t=01
Naw, no way in heck that’s effecting availability of food and pricing it beyond people’s ability to buy food.
James Sexton, I’m not flabbergasted at your ignorance. I’m all to familiar with the approach. It is like climate science – reject the ground truth and believe the models. That is what you are doing.
You also didn’t read very carefully what I wrote. I did NOT defend any notion of using wind power as -baseline- power, except as what would be tested as always available across a large grid. I think I made that clear. So you attack me personally for saying something I didn’t say.
You’ve now had multiple first person witnesses on ethanol. You choose not to believe them. You should work for Mann or Hansen.
1/3 goes to ethanol? Where? Certainly not in southern Minnesota, northern Iowa. Where is this supposed to be happening? The price of corn went up, then went down, by quite a bit. And that isn’t the price of wheat or rice.
Mike D. you are mostly correct except that the farm economy has not been a free market since WWII, and Earl Butz really caused problems. Further, farmers are not able to simply switch to other crops. The profit margin is extremely low especially when compared to other ways of life, the investment is huge, and even if a farmer could float a loan for all new equipment, there’d be no distribution network in place for it, to sell it.
So the corn sits on the ground at the co-op elevator because the silos are filled to capacity, and rots. The PIK type programs are part of the cheap food (incumbant election safety) program. If the farmers all lose their ancestral homes due to prices being consistantly, long term below the cost of production, food prices will ultimately soar. So the government built supports in, the flip side being that they then remove the supports at other times, manipulating the market.
It is NAFTA, not ethanol production, which is causing problems in Mexico. The Mexican farmers can’t compete. And they aren’t even raising the same kind of corn. But some of you won’t believe the truth no matter how many times you are told. Kinda like warmists.
The bins are full. The elevators are full.
“””””” HR says:
February 8, 2011 at 12:19 am
Mubarak must be loving this. It’s nothing to do with his failing regime, it’s all down to climate change. It’s particularly annoying that complex social phenomenon such as protest and war are reduced to a simple correlation with climate metrics. For me these are the hardest pieces of ‘science’ to swallow. Every politician in the world must be loving this ‘get out of jail free card’ that takes responsibility for corruption and failure from them and piles it onto the weather. Climate scientists as excusniks for autocrats, that must be satisfying for their liberal consciences.
BTW Antony one mans riot is another mans vigorous democratic protest. “””””
“”””” BTW Antony one mans riot is another mans vigorous democratic protest. “””””
Well it is so trivial to tell the two apart. When you have “another man’s vigorous democratic protest”, after the protest is over, the participants pick up all of their trash, and dispose of it in the proper places, and then go off to their homes.
In a riot; the mindless hoodlums who are rioting, take it upon themselves to destroy what others have built or provided; which has the inevitable result, that cleaning up the mess, leaves even less resources available to provide anything at all for the rioters.
See the two are simply not comparable on any level. Oh I bet you have never attended a “vigorous democratic protest. ” by say your local ad hoc Tea Party group. I’ve been to several, and even the cops standing by to ensure no interraction between the “vigorous democratic protest” and a counter group who came to riot, remarked how clean and tidy everything was after the sanctioned and permitted “vigorous democratic protest” participants declared “time”, and packed off all of their stuff, including picking up the trash of the rioters.
“”””” Mike M says:
February 8, 2011 at 1:10 pm
In 1961 an 18oz box of corn flakes cost 27 CENTS! Now it costs about $3.00 which is consistent with about 5% inflation over 50 years. “””””
Well in 1961, that 27 cents might have been worth a dime; not any more; but that is beside the point.
Today, an 18 oz box of corn flakes costs from $3 to $5 and the farmer who grew the corn possibly got 2Cents for the grains that are in that box.
The rest is waste packaging, and expensive T&V marketing hype.