Friday, July 02, 2010

Laughing all the way to the bank while dancing on corpses

Today's must-read: a truly horrifying article by Johann Hari in the Independent about how US investment bank Goldman Sachs set up a speculative bubble in food futures and caused mass starvation as a result:

In 2006, financial speculators like Goldmans pulled out of the collapsing US real estate market. They reckoned food prices would stay steady or rise while the rest of the economy tanked, so they switched their funds there. Suddenly, the world's frightened investors stampeded on to this ground.

So while the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose – which meant the all-rolled-into-one price shot up, and the starvation began. The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

Two hundred million people went hungry as a result, not because there wasn't any food - supply had in fact risen - but because futures market speculation had pushed prices beyond what they could afford to pay. There were food riots in 30 countries, and at least one starvation-induced revolution. The UN Special Rapporteur on the Right to Food has called it "a silent mass murder" entirely caused by "man-made actions". Another word for it would be genocide.

But hey, the bankers made money, so it must be OK, right?

This is the sort of shit which caused the French Revolution. And if they'd done it in the places where people were actually starving, they would have been strung up. But the joy of globalisation is that you can profit from a famine on the other side of the world, while being totally insulated from the angry, starving mobs you have caused.

Our bankers are genocidieres. Time for some trials.