Commentary on two editorials

These two columns appeared in the New York Times over the weekend of June 13, 2008. Though addressing disparate issues facing populations nearly half a world away from each other, they reflect similar phenomena. In a “flat” world functioning within the swirl of the money forces, the fundamental economics of one sector can overwhelm the lives of those functionally living in another. Money that works within the sweep of world markets may fail to deliver the basics at the local level. Within this past year, especially, we have witnessed energy issues, transportation and heat, spilling over into food supplies. When staples like grains are affected, how are ordinary folks supposed to deal?

Letters From…

Letters From Vermont

By BOB HERBERT
Published: June 14, 2008
Despite the focus on the housing crisis, gasoline prices and the economy in general, the press has not done a good job capturing the intense economic anxiety — and even dread, in some cases — that has gripped tens of millions of working Americans, including many who consider themselves solidly middle class.
Working families are not just changing their travel plans and tightening up on purchases at the mall. There is real fear and a great deal of suffering out there.
http://www.nytimes.com/2008/06/14/opinion/14herbert.html?_r=1&hp&oref=slogin

Letter From Cairo
By THOMAS L. FRIEDMAN
Published: June 15, 2008

Cairo
The current global energy-food crisis is, understandably, a pocketbook issue in America. But when you come to Egypt, you see how, in a society where so many more people live close to the edge, food and fuel prices could become enormously destabilizing. If these prices keep soaring, food and fuel could reshape politics around the developing world as much as nationalism or Communism did in their days.
A few years ago, Egypt’s president, Hosni Mubarak, belatedly but clearly embarked on an economic reform path that has produced 7 percent annual growth in the last three years — and now all that growth is being devoured by food and fuel price increases, like a plague of locusts eating through the Nile Delta.
http://www.nytimes.com/2008/06/15/opinion/15friedman.html

Commentary
by Richard B. Wagner, JD, CFP®
These two columns appeared in the New York Times over the weekend of June 13, 2008. Though addressing disparate issues facing populations nearly half a world away from each other, they reflect similar phenomena. In a “flat” world functioning within the swirl of the money forces, the fundamental economics of one sector can overwhelm the lives of those functionally living in another. Money that works within the sweep of world markets may fail to deliver the basics at the local level. Within this past year, especially, we have witnessed energy issues, transportation and heat, spilling over into food supplies. When staples like grains are affected, how are ordinary folks supposed to deal?
As we remind ourselves of the axiom that money skills are 21st century survival skills, Thomas Friedman relates a brutal truth: Food alone requires sixty percent of the household budget for some forty percent of Egyptians. When wheat prices double in the face of US bio-fuel creation, life gets tougher, fast. He conveys stories of food riots and undernourishment. We have heard of similar phenomena relating to corn and the prices of dietary staples for Mexicans.
Not so far from home, Bob Herbert relates tales of the responses that Vermont Senator Bernie Sanders received from his constituency. Sanders had asked for the voters in his state to write about their experiences in “a difficult economy.” He was “blown away” by the sheer volume of correspondence describing grim choices between transportation, heat, food and health care. As with the Egyptians, more than a bit of this is taking place within the cross-drafts of international trade and competing demand. Crop producers realize higher profits when their produce is used for fuel than when it is used for food. Their common elements engage the interface between ordinary life for many people and a global economy.
Statistics cannot accurately reveal the plight of the numerator.
Efficiencies are clearly vital to functional economies. Markets are powerful determinants of highest and best uses of available resources. No quarrel. Nonetheless, the money forces generated by currencies, markets and market responses to this world’s conditions can leave many folks, the “working poor,” short on nutrients and other necessities. Even assuming maximum frugality, choices for many are few, difficult and intense.
The thing is, the money does not care.

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