It's February already! When I was just 19 someone told me that when I turned 21 the speed at which time elapses would double, and then when I turned 45, it would double again. With January gone in a blink, the subjective acceleration of elapsed time is confirmed again. It makes me aware of how little time any of us have in our brief spans of life, and so how important it is to think forward to the future we help to create.
There are so many things I wanted to write about in depth, but perhaps what I need to do is just write something - especially since the comments may be the best part of this blog if the old Roubini posse hangs out here.
Along with the rest of the world, I am watching events unfold in Egypt and I am awed by the civilised and moderate nature of the Egyptian crowds. Students have formed protective rings around the most important heritage sites to prevent damage. Neighbourhood Watches have sprung up to provide civil security. Supplies of food and water are couriered to the protestors and shared with the police and soldiers. There is no obvious political leadership among the protesters, but their self-organisation is still impressive.
The looting that has occurred appears to have been a tactic of the security forces to prepare the way for an aggressive crackdown.
I wish it was only undemocratic regimes that used the technique of the agent provacateur, but there is too much evidence otherwise. Every post-9/11 group of "terrorists" arrested in the USA for bomb plots has had an FBI informant as the main agitator, planner and source of weapons or equipment. Here in the UK, we have police undercover agents infiltrating green and peace groups - sleeping with and even marrying activists - and they too foment unlawful violence. (It's worth clicking the link for the picture of the protestors in front of Scotland Yard.) At the G20 protests a couple years back, the peaceful crowd started to video an agitator and reported him to organisers and police, only to see him run for police lines and disappear among his colleagues. The agent provocateur has become a mainstream strategy of a political class which views organised, democratic resistance as a threat to entrenched privilege. The unscrupulous politician might even instigate violence to foment fear and justify further statist oppression.
A nation of 50 million Arabs is peacefully demanding democratic reforms and accountability. This is so starkly at odds with the narrative we have been fed by our leaders in the West that we should probably rethink what else they might have got wrong.
Now imagine if such activism spreads to China. I guarantee you that the Chinese elites are imagining it too. In a country where food and fuel take about half the money in the average consumer wallet, the risks of political instability from rising inflation are very real.
The monetary excressences of the central banks to maintain the dividends and bonuses of their corporate cronies are going to spur a political backlash as inflation takes hold. The Chinese elites, just like our own, have gained the disproportionate benefit of monetary laxity through their speculations in real estate and commodities. But now comes the inflationary backlash . . .
The current spike in food prices has exceeded the spike in 2008. Rice is limit up two days in a row. Storms and crop failures are threatening worse to come.
The role of public policy in worsening market failures in energy and food is worthy of deep and searching examination. As Barry Ritholtz points out, oil companies and agribusiness are among the top corporate welfare queens, sucking on the Treasury for subsidies while reporting huge profits largely secured from taxation by sweetheart tax breaks and global avoidance strategies. When real people go hungry, and many are unemployed, the offensiveness of this political and economic injustice becomes too great to stomach.
Egypt used to have a food surplus. Thanks to the miracles of modern agribusiness, population growth, and mismanagement by corrupt politicians, it is now a net importer of food. Food security is going to be a priority for any new leadership in Egypt. A recent UK study of food security makes clear that it is an issue we will all have a stake in resolving.
As the Year of the Rabbit dawns, China's elites will be weighing life without easy credit against life with political chaos and hungry protesters. I used to be quite confident that they would crack down on banks and the shadow banks that have grown like fungus in the warm, moist environment of monetary excess. Now I am not so sure. Like their peers in the banks, oil companies and agribusinesses of the West, many Chinese elites cannot imagine a world of financial constraint and fiscal austerity. Despite the risk that they could lose it all to political instability if they delay and inflation takes hold, they appear to be wavering.
Interesting times . . .
What is clear is that our systems for energy and food production and distribution have become so highly concentrated and so easily manipulated by the corporate few that a popular uprising might be the best hope of reform for the hungry many.
Professor Roubini has a piece in the FT today discussing the stagflationary risks of instability.
Writing this, I went back and read "Famine Futures" which I wrote in 2008. That post goes into more detail about how progressively more concentrated ownership of critical energy and food production, alongside free market reforms and financialisation of commodity markets, have led us to where we are.
What I don't know as I watch political change unfold, is where we go from here. I'm still thinking a few chickens in the back yard might be a good investment.
Update: Why US farm policy caused Egypt crisis, by Thomas Kostigen