U.S. Economic/Financial News

Food Insecurity Skyrocketing in the U.S.

Nov. 16 (EIRNS)—A report published Nov. 15 by the Economic Research Service of the U.S. Department of Agriculture, documents growth of food insecurity in the United States as the economic crisis has worsened. According to the report, 14.7% of U.S. households, or 17.4 million, were food insecure in 2009 (defined as having difficulty providing enough food for all members, due to insufficient resources at some point during the year).

While this is only slightly higher than 2008's 14.6%, breaking down that figure results in a more dramatic picture. The number of households that reported obtaining emergency food from food relief pantries increased by 44% from 2007 to 2009, from 3.9 million to 5.6 million households. Food pantry use by married-couple families rose 66%, 57% for multiple-adult households without children, and 65% in the Midwest. In 2009, food pantry use in suburban areas topped that in large cities for the first time since 2001.

Federal government spending on food and nutrition assistance programs grew 27% in 2009, due both to a significant hike in Congressional funding and record growth in caseload, primarily in the food stamp program.

Brits Defend Bernanke Hyperinflation Policy

Nov. 14 (EIRNS)—London Economist chief economic correspondent Greg Ip is the latest British "expert" to instruct Americans to go along with Fed chairman Ben Bernanke's Nov. 3 hyperinflationary printing policy—even while the Bank of England avoided Bernanke's "quantitative easing" insanity themselves, when it met Nov. 4.

Writing in the Washington Post today, Ip claims the hyperinflation policy is necessary and "will not cause inflation." (!) He claims the Fed money presses are not really printing money—because the banks are not going to make any investments in the U.S. economy with the new Fed liquidity—they'll just speculate with it, feeding it back into the financial system. It would only count as printing money, Ip instructs us, if consumers or businesses were allowed to get their hands on any of it; and the banks will protect you from that.

Bernanke's QE2 Attacked by 25 Economists

Nov. 15 (EIRNS)—Twenty-five economists have issued a public attack against Fed chairman Ben Bernanke's "quantitative easing," QE2. In an open letter to be published this week as an ad in the Wall Street Journal and the New York Times, they say, "We do not believe such a plan is necessary or advisable," and it would "risk currency debasement and inflation," not to mention doing nothing for "promoting employment." Noting that Bernanke's actions had drawn worldwide criticism ("from other central banks"), they emphasize that they "disagree with the view that inflation needs to be pushed higher," and maintain that QE2 "is neither warranted nor helpful" in solving the economic crisis.

Signers include a combination of investors and academics, including: neo-con William Kristol; Bush-era Congressional Budget Office director Douglas Holtz-Eakin; neo-con academic and self-proclaimed (anti-)FDR "expert" Amity Shlaes; and Harvard-based "empire builder" Niall Ferguson. These people have been in consultation with incoming Congressmen, keying on likely House Budget Committee Chairman Paul Ryan (R-Wisc.). While not exactly a list of "Glass-Steagall signers"—the letter proposes "improvements in spending and regulatory policies"—there is obviously a fissure in the Republican Party on this issue.