View from the Loft

Inexcusable: hunger in America

A recent report released by Feeding America, which operates a nationwide network of food banks and other programs (such as providing school kids with lunches during the summer), shows that the number of people using food banks and reporting "food insecurity" has increased dramatically.

Here are some findings from the report (I urge you t read more at the link):

• Feeding America is annually providing food to 37 million Americans, including 14 million children. This is an increase of 46 percent over 2006, when we were feeding 25 million Americans, including 9 million children, each year.
• That means one in eight Americans now rely on Feeding America for food and groceries.
• Feeding America's nationwide network of food banks is feeding 1 million more Americans each week than we did in 2006. 
• Thirty-six percent of the households we serve have at least one person working.
• More than one-third of client households report having to choose between food and other basic necessities, such as rent, utilities and medical care.
• The number of children the Feeding America network serves has increased by 50 percent since 2006.

After a year-long, bitter, rancorous debate--if you can call it debate, considering the epithets, falsehoods, and accusations being thrown around with abandon--some sort of health care reform has been signed into law. But health begins with nutrition. You can't be healthy if you can't get enough to eat, or if you can't get enough of the proper food to eat. Yet, according to Feeding America's study, one in four children is food insecure. ("Food insecure" is governmentese for not being certain where you'll find your next meal.) Since 2004, the number of children receiving food from Feeding America's food pantries has increased by 50%.

But people of all ages are finding that they have to turn to food pantries and other sources to get enough to eat. I know that food stamp use is at a record high, and this is true for the clients that seek help at food pantries as well (the number of their clients receiving food stamps has increased by 64% since 2006). Feeding America reports that over a third of their client households incude at least one employed adult, but the household income is so low that even the most basic necessities are difficult to afford. Ten per cent of clients are homeless. For all clients, the average monthly income is just $940.

What is wrong with a country that forces people to choose between heat and food, or medical care and food? What does that say about our social policy?

There are a lot of officeholders who don't seem to regard adequate food, shelter, and, yes, health care, to be basic human rights. Just recently several GOP Congress members have claimed that extending unemployment benefits would just discourage people from looking for work--this at a time when there just aren't enough jobs to go around. I suppose feeding children just encourages them to be layabouts who won't take responsibility for getting their own food. Or maybe it creates a bad habit, the habit of eating.

Please consider contributing to Feeding American at the above link, or seek out a local food bank. Money goes farther than donated goods, but any kind of donation is welcomed. If you are planning a garden this year, consider planting extra that can go to a local food pantry--fresh produce is always needed.

And here's something else you can do: ask Congress to increase funding for emergency food assistance, especially for children. Every five years Congress must reauthorize--and, one hopes, improve--government-funded child nutrition programs. Go here to sign the petition asking Congress to increase funding at this crucial time when we've seen such an alarming increase in hunger.

Interview of Michael Moore by Naomi Klein

This is a must-see/must read: Naomi Klein interviews Michael Moore following the opening of his latest film, Capitalism: A Love Story. In the interview, available as a video and transcript, Moore answers questions such as

How is President Obama handling the economic crisis? Who is taking on Wall Street? And who is letting Wall Street take advantage of us?

and many, many others.

One of the puzzling questions is why people like the teabaggers are so eager to defend capitalism, the very system that's cheating them--and all of us ordinary people--out of our hard-earned money.

It's a terrific, mind-opening interview. Do give it your time and attention; you'll be glad you did.

What Billmon said.

Here.

Another cheery prediction re: the economy

Perhaps you don't visit the websites I do, so maybe you aren't feeling inundated with ugly forecasts about where the economy is going--if so, lucky you, and forgive me for the doom-and-gloom. But I just thought you ought to know what the non-mainstream economists are saying. Just in case they're right ...

This didn't make me feel any too optimistic:

There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place.

Willem Buiter, a former member of Britain's Monetary Policy Committee (and thus not likely a paranoid fringe element), went on to say

The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally . . . Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed. 

He's talking about the collapse of the dollar. In this he joins such economists as Peter Schiff, who correctly predicted the bursting of the housing bubble and its morphing into a credit crisis. Schiff believes that the U.S. is about to go through economic times worse than the Great Depression, that there will be civil unrest, and that people will be cold and hungry.

Currency collapses are associated with hyperinflation, which Wikipedia defines as

inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month.

Economist John Williams predicted back in April that the U.S. could see hyperinflation as early as 2010, but that it is no more than a decade away. He said:

The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, and gross mismanagement.

The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover their obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.

Looks like hard times ahead, if these guys are right. I fervently hope they aren't.

Homelessness, hunger on the rise

Thank you Alan Greenspan and George W. Bush, and while we're at it, thanks to all the economics geniuses who got us into this mess and all those free-traders who cost the US so many jobs.

Our economy is imploding, and the effects have been noticeable for some time to those who cared to look. All the happy-happy talk about low unemployment and the robustness of the economy has rung hollow for many, many months.

The poor and those right on the edge of poverty are usually the first to feel the effects of a worsening economy, so the figures for 2007 on homelessness and "food insecurity" coming from the U.S. Conference of Mayors should come as no surprise to anyone who hasn't been buying the government's propaganda.

According to its annual report on hunger and homelessness,

• requests for emergency food increased in 4 of every 5 cities, with the median increase being 10%
• 13 of 19 survey cities said they could not meet demands for emergency food
• across all cities, an average of 15 percent of families with children looking for emergency food must be turned away
• 9 in 10 of the cities sampled for details on the urban hunger crisis say they expect increases in food requests next year
• the average duration of homelessness was 6 months for families and 5 months for individuals (down from the previous year's 8 months)
• nearly 1 in 4 shelter stays were by members of family groups
• cities reported increases in households with children seeking transitional or emergency shelter
• despite the addition of thousands of beds for the homeless in the survey cities, half the cities reported turning away people some or all of the time

According to last year's report, a third of adults seeking emergency food were employed, and 23% of requests were simply unmet. There's little reason to think that things improved for 2007, given that food banks sent out desperate appeals for resources as the year waned.

Foreclosures, inflation in food prices, lack of affordable housing, high medical costs, and the high cost of fuel have all exacerbated the problems of homelessness and hunger in urban areas. In many cities, "tent cities" have sprung up spontaneously or have been established by charitiees or local government to provide shelter for the homeless (just Google "tent city" in Google news). In the latter case, the high increase in the number of homeless has overwhelmed more permanent shelters. And sometimes, as in Ontario, California, spontaneous tent cities have been taken over by local governments, often in partnership with local charities, in order to provide safety and services. Remember the Hoovervilles of the Great Depression? Perhaps we'll be calling them Bushvilles ...

We're going to see many more homeless people as the foreclosure crisis deepens, as jobs are lost (see the Bureau of Labor Statistics' "The Employment Situation: December 2007," and then read Mike Shedlock's commentary and analysis for a better understanding of that situation), as energy and food prices increase, and as the cost of health care continues to skyrocket.

It is unconscionable that the plight of the hungry and homeless is completely absent from our political discourse. We hear a lot about saving the middle class, but nothing about those who live in poverty. A study conducted by Penn State researchers in 2005, "An Atlas of Poverty in America: One Nation Pulling Apart, 1960-2003," found that of the 35 million people in the US living below the poverty line, 7 million are employed but unable to earn a living wage. In 17 states, 50% of workers have incomes below the poverty line. The stereotyping by the right wing about the poor being lazy and unwilling to work is simply not true; most of those who aren't working are children, the elderly, and the disabled. But we're going to see an increase in both the unemployed and in the number of working poor as the economy continues its decline and inflation takes its toll.

Without even the recognition that poverty exists in this nation, how will we address these problems? Where will we find the political will to address hunger and homelessness when our so-called leaders never mention them or seem to know these conditions exist in the United States?

Who will speak for the poor?

More on nickels and pennies

Recently I noted that a nickel is now worth 6.99 cents and a penny is worth 1.12 cents, due to rising metal prices, a situation that caused the US to enact new regulations that prohibit the melting down of nickels and pennies under threat of five years in prison and a $10,000 fine.

Mike Shedlock (Mish) has more. First, he quotes the US Mint Director:

"The nation needs its coinage for commerce," U.S. Mint director Ed Moy said in a statement. "We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers."

Then he says:

Note the irony in the mint for being concerned about those who would "take advantage of the American taxpayer" when the actual production cost for each penny is now up to 1.73 cents according to the Houston Chronical. Year in and year out the mint wastes money by coining pennies.

[snip--detailed chart]

Notice that the Mint produced $78,612,000 worth of pennies at a cost of $135,998,760 thereby wasting $57,386,760 of taxpayer money through November of 2006. Worse yet are the continued handling charges (and time wasted) by merchants and banks sorting and counting the damn things.

Furthermore,

The mint had to be crazy to announce that a nickel is worth 7 cents. I got to thinking about this a bit more and a nickel is really .05 dollars plus a call option on the price of copper and nickel (the metals) in the nickel. If that option is ITM enough (in the money) the mint can not prevent people from hoarding them which will in turn drive up the cost of producing them. In fact, the actual price does not even have to get high enough, the mere expectation that metal prices will get high enough could cause hoarding. Of course the mint tried to negate that call option by making it illegal to melt the coins but that will not stop hoarding if the expected or actual price of copper and nickel gets high enough.

So since, as he points out, "We are in the ironic situation where the value of the dollar is falling but the value of a nickel is rising," when could the nickel (as currently constituted) be worth more than a dollar?

Mish quotes Aaron Krowne:

If base metal values continue to increase by 5% per year on average, and the dollar continues to depreciate by about the same, then in about 26 and a half years, a nickel will be worth a dollar in inherent value. If the rates are 10% per year, then in a bit over 13 years this milestone will be reached.

Krowne ends by urging people to hoard pennies and nickels:

You're effectively giving away free money every time you spend them. At some point in the near future a secondary market will likely develop for these coins, which trades them closer to their inherent value (in fact I've already heard of people assembling and selling 20 lb bags of the worth-2x-face-value pre-1983 pennies). This does not require melting and so is not effected by the law.

Further, hoarding the coins quickly drains them from circulation, forcing the Mint to act sanely and refactor or discontinue the coins, and finally, suspending the criminal penalties. History is once again repeating itself; the government cannot escape the iron laws of the market.

I imagine that the composition of nickels and pennies, should they continue to be produced, will change at some point as it has in the past for various coins.

Thanks to Hannah for alerting me to Mish's posts.

We're number one! We're num--oh. Not so much.

You gotta hand it to BushCo. Everything they could screw up, they did screw up. Behold the World Economic Forum's annual rankings:

The U.S. lost its position as the world's most competitive economy to Switzerland as budget and trade deficits prompted a slide to sixth in the World Economic Forum's annual rankings.                

Switzerland jumped from fourth place last year and Finland, Sweden, Denmark and Singapore all overtook the U.S. with Japan, Germany, the Netherlands and the U.K. rounding out the top ten in the study of 125 nations by the Geneva-based forum.

We're number 6! We're number 6!

But it's even worse than that:

While the U.S. remained the best country to do business in, it ranked 69th for its economic environment with the government set to post a fifth consecutive annual budget deficit and after its current account deficit widened more than forecast last quarter to the second-largest on record.

Not only has BushCo given us record deficits and what looks to be a round of inflation, its pandering to the anti-science crowd is hurting us as well:

Switzerland, home to companies such as Nestle SA and Novartis AG, topped the table because of its reputation for innovation, research and development and its scientific infrastructure, the forum said, adding Scandinavian economies performed well for similar reasons.

Not to mention that innovation is hard to come by when teachers have to "teach to the tests" under No Child Left Behind (called by some wits "No Child's Behind Left).

And BushCo still has two years to go.

Yay us.