Paul Walker at his great blog Anti Dismal summarises in two recent posts recent research on the causes of rising world food prices (hint, it's neither growing Indian and Chinese demand, nor is it the fault of speculators), and some recent rational commentary on the Fannie Mae and Freddie Mac debacle.
Thomas Sowell's quoted observation on the latter issue offers the broader lesson from both:
Politics is largely the process of taking credit and putting the blame on others— regardless of what the facts may be. Politicians get away with this to the extent that we gullibly accept their words and look to them as political messiahs.
And another thing ... artificially lowered capital costs have lead to malinvestment in capital goods with long pay back periods, the fruits of which take a long time to be enjoyed by consumers.
ReplyDeleteThis has dragged resources away from expanding agricultural production, an endeavour with a comparatively short payback period.