Tue, Apr 29 2008
DUBYA'S REAL PRIORITIES
"increase ethanol use" = record profits for Conagra and Monsanto
"national energy security" = record profits for Exxon and Halliburton
"high gas prices" = record profits for House of Saud
Food scientists say stop biofuels to fight world hunger
WASHINGTON, Associated Press - Some top international food scientists Tuesday recommended halting the use of food-based biofuels, such as ethanol, saying it would cut corn prices by 20 percent during a world food crisis.
But even as the scientists were calling for a moratorium, President Bush urged the opposite. He declared the United States should increase ethanol use because of national energy security and high gas prices.
The conflicting messages Tuesday highlighted the ongoing debate over food and fuel needs.
The three senior scientists with an international research consortium pushing a biofuel moratorium said nations need to rethink programs that divert food such as corn and soybeans into fuel, given the burgeoning worldwide food crisis. The group, CGIAR, is a global network that uses science to fight hunger. It is funded by dozens of countries and private foundations.
If leading nations stopped biofuel use this year, it would lead to a price decline in corn by about 20 percent and wheat by about 10 percent from 2009-10, said Joachim von Braun. He heads the International Food Policy Research Institute in Washington, the policy arm of CGIAR. The United States is the biggest biofuel producer.
He and the other scientists said work should be stepped up on the use of non-grain crops, such as switchgrass, for biofuel.
Another scientist, not associated with the group, agreed with their call for a halt on the use of grain for fuel.
"We need to feed the stomach before we need to feed our cars," said Rattan Lal, an Ohio State University soil sciences professor who in the past has been a critic of some of CGIAR's priorities. "We have 1 billion people who are food insecure. We can't afford the luxury of not taking care of them and taking care of gasoline."
In an interview after the CGIAR teleconference, von Braun said the United States and other countries have to make a hard choice between fighting high fuel prices and fighting world hunger.
"If you place a high value of food security for poor people, then the conclusion is clear that we step on the brake awhile," said von Braun. "If you place a high value on national energy security, other considerations come into play."
Energy security is what Bush emphasized in his press conference. When asked about the conflict with world hunger and the rising cost of food at home, he said the high price of gasoline would "spur more investment in ethanol as an alternative to gasoline.
"And the truth of the matter is, it's in our national interest that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us," Bush said.
Still, Bush said the international food crisis "is of concern to us" and said the U.S. government earlier this month added another $200 million in food aid.
A World Bank study has estimated that corn prices "rose by over 60 percent from 2005-07, largely because of the U.S. ethanol program" combined with market forces.
Other nations, such as South Africa, have stopped or slowed the push to ethanol. But because the United States is the biggest producer, if it does nothing, other nations' efforts will not amount to much, von Braun said.
Von Braun said many issues are causing the food crisis, especially market forces and speculation, but that biofuel use also ranks high among the causes.
Scientists say the diversion of corn and soybeans for fuel helps force prices higher, and removes farm land from food production. Ethanol supporters say the corn used for fuels is the type only fed to livestock. However, other experts say it leads to higher livestock feed prices, thus higher food prices.
Because of this issue, legislators in Missouri are considering lifting a requirement that fuel in that state contain 10 percent ethanol.
Just how big biofuel's effect is on food prices depends on who is talking. President Bush said it's responsible for about 15 percent of the rise in costs. U.S. Department of Agriculture spokesman Keith Williams put it closer to 20 percent.
A soon to be released International Food Policy Research Institute analysis blames 30 percent of the overall food price rise from 2000-2007 on biofuels. An industry-funded study put the food cost rise from biofuels at 4 percent.
Matt Hartwig, a spokesman for the Renewable Fuels Association, said, "World agriculture can both feed and fuel the globe."
___
On the Net:
International Food Policy Research Institute on food prices:
http://www.ifpri.org/themes/foodprices/foodprices.asp
The World Bank on biofuels' promise and risk: http://tinyurl.com/5668pu
The White House transcript of President Bush's press conference: http://www.whitehouse.gov/news/releases/2008/04/20080429-1.html
The Renewable Fuels Association: http://www.ethanolrfa.org/Tue, Apr 29 2008
POLLYANNA CREEP
BROOKE GLADSTONE: I have to admit I don't know what you're talking about. [LAUGHS]
KEVIN PHILLIPS: Well, see, that's the government's secret weapon.
Cooking the Books
(www.onthemedia.org, NPR)
To get a read on the vital signs of our increasingly shaky economy, media turn to those all-important stats: unemployment, consumer price index, GDP. But Kevin Phillips, political and economic commentator, says that for decades administrations have been altering the definitions of those stats to paint a rosier outlook.
(Listen to the MP3, or read the interview transcript)
Transcript of the interview:
BROOKE GLADSTONE: One of 2008's top stories so far has been our economic woes, and so the media are closely watching those bellwether statistics regarded as the vital signs of the economy – unemployment numbers, the consumer price index, and, of course, the gross domestic product, or GDP.
[CLIP]
FEMALE CORRESPONDENT: The US economy has added the equivalent of the entire GDP of China. So, and to be growing at 4.9 percent, I am just stunned if that's the right number. Holy cow!
[END CLIP]
BROOKE GLADSTONE: But is that the right number? Kevin Phillips explains in the May issue of Harper's that these stats are not the reliable indicators we think they are. In fact, they have been rendered almost meaningless over the decades by successive presidential administrations that have changed the criteria to make the economic picture rosier than it really was, and is. Kevin Phillips and other economists call it "the Pollyanna creep."
Phillips was a senior strategist for President Nixon.
KEVIN PHILLIPS: You had gathering inflation because of the Vietnam War. You had currency gyrations. You had the oil price problem creeping in. And this challenged the politicians because basically they didn't want to have to say, this is awful and these numbers prove it. And the numbers were softened a little bit, and that was the origin of Pollyanna creep.
BROOKE GLADSTONE: So tell me how they were able to cook the books.
KEVIN PHILLIPS: Well, let me start with unemployment. It's always a question of what the workforce is and how you define people who aren't quite in it. And this might sound like it's fairly simple, but it's not remotely. Government unemployment measurements run from the U-1 to the U-3 and up to the U-6. Now I'll stop sounding like an aircraft designation [BROOKE LAUGHS] and back up here.
The U-3 is the number that they generally report. The U-6 includes a lot more people who maybe they're looking for a job, maybe they're not. There's some larger explanation of why they're not working. And the U-6 has unemployment about twice as high as the U-3.
Now, the press, understandably, basically takes the government number, which is the lesser number, which runs in the fours and now is up just past five, whereas the other number runs between nine and ten. So which is it?
BROOKE GLADSTONE: When the media report that unemployment is, say, at five percent when really by another measurement it may be twice as high as that, what's the impact?
KEVIN PHILLIPS: Well, I think Americans tend to believe that we have lesser unemployment than Europe, and part of the reason for that is the media use the number which really is better than Europe's, because frankly [LAUGHS] it's a little bit loaded to be that way. I think, frankly, the one that runs between nine and ten is the more revealing.
BROOKE GLADSTONE: Back when I was a kid, we used to talk about the gross national product; now we talk about the gross domestic product. How is that number made rosier?
KEVIN PHILLIPS: Well to begin with, the gross national product includes your sort of foreign economic relations. And the difficulty is that [LAUGHS] they weren't doing too well in the early '90s. The United States was emerging as a major debtor nation, so we moved to the gross domestic product.
BROOKE GLADSTONE: That was in 1991?
KEVIN PHILLIPS: 1991. The problem with the gross domestic product as it now exists is it too has a number of fudge factors. A number of the elements of GDP are imputed as your income. Homeowners' expenses aren't really homeowners' expenses. They're imputed income if you rented your house.
BROOKE GLADSTONE: Kevin?
KEVIN PHILLIPS: What -
BROOKE GLADSTONE: I have to admit I don't know what you're talking about. [LAUGHS]
KEVIN PHILLIPS: Well, see, that's the government's secret weapon.
[BROOKE LAUGHS]
There is no way that the media can get in there and really explain what's happening.
BROOKE GLADSTONE: Is cooking the books like this a partisan phenomenon, or does it transcend political party? I can understand why the White House would give these rosy statistics. What I don't understand is why the opposition doesn't come back with the other numbers and say, hey wait a minute, this just isn't right.
KEVIN PHILLIPS: The books started [LAUGHS] being cooked quite a while ago. Presidents in both parties have found it very convenient, under the auspices of the Kennedy administration in terms of defining the workforce, then LBJ, then Nixon, then Reagan. George H. W. Bush - they were trying to whack inflation down to save money on Social Security, so they wanted some new definitions.
Clinton came in and fulfilled a number of the George H. W. Bush objectives, and then [LAUGHS] you found George W. Bush in, and he continued.
So you have to have an outsider politician who hasn't been involved in any of this to feel free to make the charges about cooking the books.
BROOKE GLADSTONE: How is anyone to know and report on the economy, if the basic information they're given is so gamed?
KEVIN PHILLIPS: Well, that's a real difficulty. All these problems, for example, in the credit markets that we've heard about – structured investment vehicles, collateralized debt obligations, asset-backed securities – well, the media don't know what they are either.
BROOKE GLADSTONE: The financial press has been using the word "opacity" to describe the complicated arrangements surrounding the sub-prime mortgage crisis.
KEVIN PHILLIPS: That's a nice word. That does not imply either negligence or some sort of deliberate falsification. And the difficulty is that all these definitions and what they do and how, nobody knows.
BROOKE GLADSTONE: That's opacity for you.
KEVIN PHILLIPS: That's opacity!
BROOKE GLADSTONE: Kevin, thank you very much.
KEVIN PHILLIPS: Thank you.
BROOKE GLADSTONE: Kevin Phillips is author of the new book, Bad Money, Reckless Finance, Failed Politics and the Global Crisis of American Capitalism.
Tue, Apr 29 2008
DUDE, NOT MY FAULT
What happened to "I'm the Decider"? Or better yet, "President of the United States"? Fucking weasel.
Bush faults Congress for inaction on economic woes
WASHINGTON (Reuters) - U.S. President George W. Bush said on Tuesday the U.S. economy was facing a "tough time" because of rising food and energy prices and a weak housing market, and faulted Congress for inaction.
"Many Americans are understandably anxious about issues affecting their pocketbook, from gas and food prices to mortgage and tuition bills," Bush told a press conference.
"They're looking to their elected leaders in Congress for action. Unfortunately, on many of these issues, all they're getting is delay," he added.
Bush pushed for lawmakers to approve new refineries to increase gasoline supplies, allow oil exploration in the Arctic National Wildlife Refuge in Alaska, support nuclear power, and reform the Farm Bill.
He also called on Congress to pass legislation to modernize the Federal Housing Administration, reform housing finance companies Fannie Mae and Freddie Mac, and allow state housing agencies to issue tax-free bonds to refinance subprime loans.
"On all these issues, the American people are looking to their leaders to come together and act responsibly. I don't think it's just too much to ask even in an election year," Bush said.
House of Representatives Speaker Nancy Pelosi countered that Democrats have asked the White House to cooperate on finding ways to boost the economy.
She said Bush could help by freeing up more oil by halting deposits to the Strategic Petroleum Reserve; dropping a threat to veto House legislation creating tax credits for renewable energy; and passing reforms to the home lending industry.
Democrats have said they will not move forward on trade deals that Bush eagerly wants until they get more cooperation on legislation to help displaced workers and a broader economic recovery package.
"For weeks now, Democrats have asked for the White House to sit down with us and find consensus on how to help the American economy and American families -- before another trade deal is ratified," Pelosi said in a statement. "We renew that call today."All news articles and images provided under the Fair Use Notice.