“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Saturday, May 03, 2008

Notable news of the week

Headlines in the local dead tree that caught my eye this week:

Surprise, surprise and to the dismay of some no doubt.
Jobless rate falls as dollar rises

The economy showed off unexpected signs of resilience Friday as job losses slowed, the dollar gained a bit of muscle for a change and there were even indicators that food prices may be easing.
Of course the article tempered the good news with cautions that the unemployment numbers may only be a temporary dip and reiterated the credit crisis. My thought is that the housing /credit crisis is overblown. Foreclosures are fractional percentages of all mortgages and the numbers we have been given may reflect the total value of all sub-prime mortgages but the number of mortgages in trouble is much, much less. Also, foreclosed properties still have value. Nevertheless developers and builders who want to weather this latest downturn better have deep pockets. Having lived through several boom and bust building cycles and recessions, I have been both amused and dismayed at the doomsayers and political opportunists/propagandists who have tried their damnedest to exploit a correction in the natural business cycle. Market corrections are most often good things and this one is too. Yes, there will be some pain for those who bought at the height of the market but overspeculated markets burn hot and fast. The real estate market had become irrational and unsustainable. Remember "irrational exuberance"? The current generation of young turks have been blooded by a little market reality. That's a good thing.

Oil Prices Drop
More good news, oil prices dropped to $111.oo a barrel as a Nigerian oil strike ended. Why oh why does most oil have to come from the unstable parts of the world? Regardless of peak oil or not, it's in the US long term interest to reduce its dependency on middle eastern oil.

Aha! I suspected this.
Pushed by high prices, immigrants horde rice
Skyrocketing prices and media reports of a shortage are driving many immigrants and U.S. Asians, Hispanics, Indians and others stock up on rice.
The article went on to say that customers "at Indian corner markets" have been buying two bags instead of the usual one or even going for the 50 lb bags. I was thinking that some of these people might have been buying extra in order to ship or take back relief to their relatives in the "old country."
It was interesting to watch the rice scare play out. It started with real shortages in Bangladesh and Pakistan where Katrina-like news reports hyped food insecurity and kicked off the hoarding and speculation. The Phillipine government in particular had to beat back the bogus news of shortages as their people were on the verge of panic.

The global world is like one big herd spooked by the slightest ripple of the wind in the brush and 24/7 news is the bane of modern man.


  1. We were in Costco yesterday. Big sign says, "Due to market conditions, 5 bags only per customer"

    Well, there were plenty of bags, and no customers for the rice, at our Costco.

    What are the democrats going to run on, if the war is settling down, employment is ok, and gas prices ease?

  2. "The Price of Rice?"

  3. Non-Free Economies just can't do agriculture. First they put in place Import Tariffs to protect their farmers; then, they institute Export Tariffs to "protect" the consumers; Then, when prices get high, and supplies get low, which is a dead-bang certainty they implement price subsidies.

    Now that the government is the one buying they start trying to Control Prices. Good Night, Irene.

    Case in point: Farmers in China are cutting back on Rice production because the Government won't let them Export their Rice, and they can't sell for a high enough price, locally (the price is controlled,) to be able to afford fertilizer, and other inputs.

    India, also, is ate up with this problem, and Argentina is getting there. Egypt, same old, same old. Bangladesh, Pakistan, Zimbabwe - more of the same.

  4. Bobal: Well, there were plenty of bags, and no customers for the rice, at our Costco.

    My rice dispenser, which can hold about a six month's supply even for us, is only half empty. Fifty pound bags used to cost about 22 dollars, now they are 45 dollars. By the time my rice dispenser is empty, rice will be back a bit, maybe 28 dollars, because the harvest is just going in the ground now, and it will be ready then, and this big commodities bubble is about to pop.

  5. Advisers to Mr. Obama concede he lost support among some white voters in the wake of the storm surrounding Mr. Wright. Since then, the campaign has sought to increase its appeal to white voters. At Mr. Obama’s first stop in the state on Friday, a rally in Charlotte, most seats in the Cricket Arena were filled with black supporters. Yet many of the seats directly behind Mr. Obama — in the view of news cameras — were filled by white supporters.

    Stick in a bunch whites for the cameras:) ah jeez

    Keeping rice that long, doesn't it get buggy, T. ?

    I noticed my "Macaroni and Cheese"(The Cheesiest) which had been on the shelf maybe that long, was a little buggy the other day.

  6. India, also, is ate up with this problem, and Argentina is getting there. Egypt, same old, same old. Bangladesh, Pakistan, Zimbabwe - more of the same.

    In the Philippines, a lot of good bottom land was turned into golf courses and townhouses and stuff, because people thought the rice fairy (exports from Vietnam) brought rice when rice was short. Well guess what, Vietnam turned off the export spigot, just like most of the other exporters. The market rate is 34 pesos per kilo, and the government subsides it at 18 PHP per kg, but limits quantities to 3 kilos per customer. This results in people standing in line all day to get what they need to eat. A productive economy should have people working all day to get what they need to eat, not standing in line.

  7. Bobal: Keeping rice that long, doesn't it get buggy, T. ?

    I guess so, but the process of steaming it kills the bugs, so it just amounts to a little protein added to what is mostly just carbs. Yum.