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September 28, 2021 | The U.S. Government Vows to “Fix” the Food System

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

BALTIMORE, MARYLAND – Things go wrong.

The Wall Street Journal published this alert last night:

Democratic leaders are trying to shepherd two complicated legislative packages: a roughly $1 trillion bipartisan infrastructure bill and a sprawling healthcare, education and climate package whose proposed $3.5 trillion price tag and contents are still under intense debate within the party.

At the same time, the government’s funding is set to expire at 12:01 a.m. on Friday, Oct. 1, which would partially shut down the government if Congress doesn’t act. Lawmakers also are feuding over who is responsible for raising the debt limit and avoiding a potentially catastrophic default. Absent swift action, Treasury Secretary Janet Yellen notified Congress this month that the Treasury may be unable to keep paying all of the government’s bills on time during October.

Reuters calls it a “moment of truth” for Congress.

Politicians grandstand. They argue and point the finger at each other.

But if the spending is interrupted, it won’t be interrupted for long. The real truth is that Democrats and Republicans agree on the important issue – that the rip-off of the American public must go on.

Borrow… spend… print… and borrow more.

Eventually, the end of the world as we have known it comes. And then, things get serious. Painful. Chaotic. And disastrous.

Empty Stomachs

And today, we look at one of the most nightmarish features of the End of the World As We Have Known It: hunger.

It is hard to imagine widespread hunger in the U.S. The country is so rich, so big, so productive… food is so plentiful… and its people are so fat. What could possibly go so wrong as to cause people to go hungry?

Our friend, independent publisher MN Gordon, passed along a bit of news:

According to the United Nations Food and Agriculture Organization (FAO), global food prices were up nearly 33 percent year over year in August. Vegetable oil, grains, and meat all cost more. Unfortunately, rising food prices – and empty stomachs – often presage social chaos and revolution.

When adjusted for inflation and annualized, the cost of food is higher than nearly anytime in the past six decades, according to FAO data. Alastair Smith, senior teaching fellow in global sustainable development at Warwick University in the United Kingdom, recently noted:

“Food is more expensive today than it has been for the vast majority of modern recorded history.”

Whoa! What happened? Don’t farm machinery, fertilizers, and pesticides get better every year? Aren’t they burning off the Amazon to plant more soya? And wasn’t global warming supposed to be bad for humans, but good for plants? What gives?

And the Blame Goes to…

We don’t know. But thank God for the Biden Team. It knows exactly what the problem is: Capitalism!

In food production, as in banking, the political hustlers think they know better than consumers, investors, and producers. Here’s the White House Briefing Room blog…

Four large conglomerates overwhelmingly control meat supply chains, driving down earnings for farmers while driving up prices for consumers. The meatpacking industry buys cattle, hogs, and chickens from farmers and ranchers, processes it, and then sells beef, pork, and poultry on to retailers like grocery stores. The industry is highly consolidated, and serves as a key choke point in the supply chain.

That consolidation gives these middlemen the power to squeeze both consumers and farmers and ranchers. There’s a long history of these giant meat processors making more and more, while families pay more at the grocery store and farmers and ranchers earn less for their products. Absent this corporate consolidation, prices would be lower for consumers and fairer for farmers and ranchers.

And here comes the money shot:

As we restart the world’s largest economy and make great strides in the economic recovery, the Biden-Harris Administration is committed to restarting right for the American people – consumers and producers alike – by transforming the food system.

Is that you sputtering and choking, Dear Reader?

Yes, you read that right.

We saw on Friday that the feds plan to rework the entire financial system, eliminating banks as we have known them.

Now this; they aim to “transform” our farms, too.

Empty Shelves

At least 2 million people starved in the Ukraine after the Soviet government took charge. As many as 55 million died in China after Chairman Mao sought to “transform” the farm economy in 1958.

As far as we know, no centrally planned, government-directed agriculture program has ever succeeded.

Zimbabwe had been known as “the breadbasket of Africa.” Its rich fields and temperate climate made it one of the most productive countries on the continent.

But then, along came a government determined to transform the food system… and the financial system, too… Farms were taken away from prosperous white farmers and given to government cronies.

And soon, the shelves were empty.

Venezuela? Want a loaf of bread? A roll of toilet paper? Aspirin… antibiotics… beta blockers? Forget it. The stores are empty.

Venezuela is now at what probably is the apex of its government-imposed misery. Prices are meaningless; there is little to buy. Food output has dived. People rummage through garbage bins trying to get enough to eat. Millions leave the country.

Will it reach that point in the U.S.?

Unlikely. But who knows?

It might not be a bad idea to plant some potatoes, just in case.

Regards,

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Bill

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September 28th, 2021

Posted In: Bill Bonner's Diary

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