Unintended Consequences

The following article from the American Thinker posits that U.S. policies may have had the unintended consequence of contributing to turmoil in the Mideast. I think he may have a point. Yet another reason to scrap ethanol.

America and the Middle East Food Riots

By Steve McCann

Perhaps the most overused but most accurate term used to describe the policies and ideology of the American left is the "Law of Unintended Consequences."  There is virtually nothing that these people espouse that, once put in place, has not had detrimental effects on either the people of the United States or the world. 

Today there is a global food shortage and skyrocketing prices.  This has become the underlying factor in the riots in Tunisia, Algeria, and Egypt, where up to 56% of a person's income is dedicated to the acquisition of food.  These riots are now leading to the upheaval of governments and the very real possibility of the ascendancy of the radical elements into control.

While bad weather in various parts of the world is an element of the accelerating food prices, there are two other factors directly related to the United States and its policies.

First, because of the enormous deficits run up by the Obama administration and the Democrat-controlled Congress, the Federal Reserve has had to effectively print trillions of dollars, which have flooded the global market.  Commodities are priced in dollars; consequently, emerging markets throughout the world, and the food sector in particular, are suffering from rapidly rising inflation.

The CRB food index is up an incredible 36% over last year.  Raw materials are up 23%.  Since 2009, the dollar has declined by over 13% against the Japanese yen and 25% against the Canadian dollar.

Larry Kudlow in the National Review writes in regard to the riots in Africa and the Middle East:

So I have to ask this tough question: Is Ben Bernanke's ultra-easy QE2 money-priming partially to blame.

But food riots in the North Africa/Middle East area are bumping smack into long-time resentment over autocratic government.  If food is in fact the trigger for what may be a revolution in Egypt, then US monetary policy has to shoulder at least some of the blame.