You probably don't need me to tell you that food prices are going up. You have probably noticed that the contents of your shopping basket cost more than they did this time last year. Food price inflation is now 5%, and may soon start to impact on the overall rate of inflation.

It's not just student food budgets that are feeling the pinch. Indian restaurants (and we have a few of them in Selly Oak) are affected by the rising cost of basmati rice. Worldwide prices are increasing on an even bigger scale than in Britain. Flour prices in Pakistan have doubled. In Mexico, tens of thousands marched last year protesting against the cost of tortillas. Tortillas are the main staple food for the poor in Mexico, and their price has quadrupled in recent years. In Italy there were the so-called "pasta riots", and food riots have also happened in places such as Yemen, Senegal and Morocco. According to the United Nations' Food and Agriculture Organisation (FAO) 37 countries are facing food crises. The FAO's food price index has risen 40% in the past year, which has catastrophic implications for some of the world's poorest. Put simply, the World Bank reckons that for each 1% rise in food prices, the calorie intake of the poor drops by 0.5%.

It is also the most vulnerable in the UK who are most affected by soaring food prices. Those on fixed incomes, such as the elderly on pensioners and those on benefits, are more likely to suffer. This is another version of Sod's law: if something bad is going to happen, invariably those most affected are those in the worst position to cope.

Food prices are rising for a number of reasons. The high price of oil is obviously a factor. With a barrel of oil now costing over $90 a barrel, farming costs, such as transportation, are increasing. High oil prices are also leading countries, including the USA, to convert grain into fuel for cars rather than for food. In countries such as India and China, scarce water supplies are being used by the rising populations, rather than on agriculture. The Indians and Chinese are also eating more meat, which requires more grain to feed animals. Food production has always been affected by droughts and floods, but now climate change means that these droughts are becoming more frequent and at irregular intervals. This scarcity of both water and farmland is leading to speculation that this rise in food prices may be longer than expected, according a study out this week by Bidwells Agribusiness.

This is a very depressing picture, and may lead you to the depressing conclusion that we are all screwed, caught in several vicious circles. Have no fear: hope does still remain. Even those who know nothing about economics (I also come under this bracket) know that supply and demand are very important. As demand for food increases, it seems logical that farmers will increase supply. This should keep prices at a reasonable level. On the other hand, in 2007 food production reached its highest level ever, and still prices rocketed. Britain's food industry is also very competitive, which should theoretically keep prices low. One must take into account the fact that most big businesses are greedy beggars. Late last year Sainsbury's and Asda admitted that they had kept the prices of dairy products artificially high, which cost consumers £270 million. It is also hoped that Biofuel engineers can develop a method of biofuel that doesn't require grain, which would leave more food supply. However, with the world's population predicted to reach 9 billion by 2050, rising food prices is not going to be an issue which goes away too soon.

Cory

The Telegraph on their former owner being convicted of fraud:

Conrad Black case lacked evidence, say jurors

Conrad Black was found not guilty on the majority of fraud charges against him because of the lack of “paper evidence”, one of the jurors in the case said.

Of course, he was still guilty of three counts of fraud. Which, at the time of writing, is three more than both me and Adam combined. There is also the fact that perhaps if one was going to commit major fraud, one wouldn't write all the evidence down. But meh.

The news did make me giggle though. Not in the same league as the news as Alan Johnston's release, but marvellous nonetheless.

Cory

Lots of banks aren't doing their job properly:

Several leading banks may be facing unlimited fines over allegations that they dumped confidential customer account details in bin bags on streets...

Mr Thomas said among the findings in bin bags were bank statements, loan applications which had been turned down and paying-in slips.

It comes after BBC investigators found customer names, addresses and account details when rifling through discarded rubbish.

Just rifling through discarded rubbish, they were. As you do.

This is pretty dreadful. Made even worse by that fact that one of the banks in question is my bank!

In response to all this, Yahoo has given us some guidelines on how to protect identity fraud. Now we ought to do that stuff, but there seems precious little point if your bank is just going to take your details and just dump them on the street.

Cory

...now that's what I call business.

Cory

It's nice to see the Tory party self-destructing again, after all Labour's been through over the past few weeks.

Now we have right-wingers like John Redwood and Norman Tebbit banging on about tax cuts. Why do they want lower taxes to be part of Tory policy? Basically, because that's what the Tories have always argued. Like in the 2005 election. And the 2001 one. The fact the Tories lost both these elections seems to have escaped Messrs Redwood and Tebbit.

They come armed with some papers from Thatcherite think tanks - including one slightly confusing one from the Taxpayer's Alliance:

All the evidence shows that if you cut taxes, people work harder, you generate more growth and you get more money in the government’s coffers.

It was also argued that if tax rates were lowered, the super-rich would spend less time trying to evade paying tax. I'm sure it would, but don't evade paying tax in the first place, you slimy selfish creatures of flith! Especially when director's pay is up 28% this year - seven times the average wage increase.

The simple fact is that lower taxes means less schools and hospitals. It's time the Tebbits of this world stopped tub-thumping. Not that I mind a huge schism in the Tory party that much...

Cory

No, not another article about Israel, but about this divorce settlement:

Insurance magnate John Charman has been ordered to pay his former wife a total of £48 million in what is believed to be the biggest divorce award in legal history, it emerged today...

In percentage terms, the judge held this to be just under 37% of the assets which he found amounted to just over £131 million, including trust assets...

..."I made a fair and open offer to my wife of £20 million, which would be impossible for any reasonable person to spend in their lifetime."

Surely, if this chap owns £131million, than the thing we ought to be asking is why his wife didn't receive more!

If £20 million is more than enough for a reasonable person to spend in their lifetime, then surely he's got enough money with the £83million he has left?

Part of his defence was that he wanted the money for his family. But he already has put £25 million in a fund EACH for his two sons.

If I had my way, I'd take another £40 million from him and put it into our schools. Or hospitals.....(OK, I'll end the militant lefty rant here).

I could understand the fuss if a bloke only owned ten grand and his wife was given three, but with £83 million left?!? Tish and pish, I say, not for the first time.

-posted by Roy

Following my earlier post on the Natwest Three, I thought I'd add some more detail. There's a good article in Private Eye about the extradition I think you ought to read. I'm not going to quote any, because a) I'm not sure on copyright laws and b) if you want to read it all that badly you can buy your own (skinflints!), but here is the thrust:

There are several dodgy e-mails sent between the three as evidence, including this peach, from David Bermingham to Gary Mulgrew (two-thirds of the Natwest Three):

I will be the first to be delighted if he (Andy Fastow, their chief financial officer) has found a way to...steal a large portion for himself.

The case should be investigated by the Americans and not the British. The Americans have their case together first, therefore under the "rules" of international frauds, they should go ahead and prosecute. Many Americans who will stand as witnesses were very unlikely to come to the UK and testify anyway. And the allegedly dodgy account where the "ill-gotten gains" was supposed to be paid into set up was in the Cayman Islands, not London.

There is more than enough case to answer (the criteria needed to extradite suspects) and so far the three have been staying in a hotel, not a prison. Hardly the squalor the British Press wanted us to believe these bankers would be placed in.

The prosecution have asked the defendants to serve seven to nine years in jail if found guilty. 35 years is merely the theoretical maxiumum. 

As I say, for the rest buy Private Eye. Too much has focused on the admittedly naff Treaty, rather than concentrate on the fact that these people are suspected of stealing hundreds of thousands, if not millions, of dollars. Surely it is in the interests of all concerned that the three face trial, and justice, rather than heed to the curious campaign led by rags such as the Telegraph.

For a BBC FAQ about the Natwest three, read this.

-posted by Roy

A marvellous, brilliant post on his blog by Stephen Pollard, about the three chaps from Natwest who are being extradited to the US in order to face fraud charges:

And, er, that’s it. That’s the huge injustice that they are facing. A trial, where the evidence will be weighed, and a jury will decide. When a trial takes place here we call it justice. When it takes place in the US we call it an outrage.

The British authorities don’t want to try them, the cry has gone out, so they should be left alone. Well, maybe, just maybe, that’s because the US is far tougher on white-collar crime than we are.

But they’ll await trial alongside murderers and rapists! Indeed. That’s what happens when you’re locked up. It’s not meant to be pleasant.

Most stupidly of all, we are told that we shouldn’t extradite them to the US because they didn’t extradite IRA suspects to us. Genius. Explain, please, how the best response is allowing other indicted defendants to escape trial, too?

None of the fuss has anything to do with justice. It’s merely the latest manifestation of the British establishment’s default mode: sneering superiority towards those awful hick Americans. And it’s as nauseating as usual.

It does seem strange. If these men have not done anything wrong, why not stand trial in America? It's good that America takes more of a stand over corporate crime. Pity the same doesn't happen over here.

-posted by Roy

I was watching Newsnight with my 16-year old brother a couple of days ago, when they were discussing the fiasco over Thames Water, the company that has performed crap but still increases its profits.

This, of course, shows why the utilities should be nationalised, not run by private companies. The concept of competition doesn't work for utilities. A budding entrepreneur cannot set up another set of water pipes in people's houses, to give them a clear "choice" about which water company they use. The result is an entrenched monopoly, whose huge profits - of £346 million - mainly go to Thames Water's German owner RWE rather than to updating 160 year old pipes to cut down leaks. If Thames Water was nationalised, this £346 million could go to updating the pipes. Or to its customers, who are paying water bills 24% above inflation.

Having watched the Newsnight piece on Thames Water, my brother said, "More things should be nationalised, shouldn't they?" It was the happiest thing I had heard all day. Another convert!

-posted by Roy

Good reminder frm James Bartholomew. Money Quote :

 

Tens of millions died under communist rule in China. And after all the oppression and suffering, there was still no equality. There was the privileged ruling class with, in Russia's case, special dachas in the country and road lanes in town. Imposing equality is not an easy ride. It is oppressive and doomed to failure.

Capitalism, meanwhile, has claims, at the least, to reducing inequality over time. The inequality was enormous when George III was sitting on his gilded throne in 1806, with thousands of servants and farm workers and other underlings at his beck and call, while elsewhere in the country were those who could barely find enough to eat and, in some cases, died of hunger.

Nowadays, more than nine out of 10 young people have mobile phones, 99 per cent of households have colour televisions, most households have cars. Yes, the rich are still with us. But the contrast in financial wealth has been greatly reduced over the long term. That was not due to any government, let alone a deliberate attempt to promote equality. It was achieved by capitalism.

Why is the system now taken for granted and despised? Perhaps it is because the collapse of the communist states has removed from our sight useful reminders of how vastly superior capitalism is to state control. We should be careful. 

-Posted by Adam