Outside The Box - Business Mirror
ABS-CBN News Online
Today, around the world, we are seeing the results and consequences of government pride and subsequent action to control the vastly complex organism called the economy.
From Europe and Africa, through Asia to the Americas, the world is facing a food crisis. No nation will be spared from the "unintended" consequences of many widespread bad government policies over several decades. Even China, while officially denying (as usual) any supply problems, is paying farmers substantial cash amounts to increase wheat and rice production.
Riots and near-riots occurred in several countries in the last few months, in as diverse places as India, Mexico, Egypt and Russia. Although public unrest over food shortages is not uncommon through history, the recent disturbances center primarily on the availability of subsidized food.
Perhaps the most indicative example of bad government policy happened in Egypt where literally thousands "torched buildings, looted shops and hurled bricks at the police who responded with tear gas Sunday" (Associated Press). Since the 1970s, the Egyptian government has subsidized bread prices, a loaf selling for the equivalent of 1 US cent or about 40 Philippine centavos. Bread that is not subsidized by the government sells for about 10 times higher.
Of course, this 30-year policy was designed to "help the poor." Then again, all government interference in the free market is to help the poor. How much is Egypt spending each year on food subsidies to help the poor? Nearly $14 billion...
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