There's a whole world out there, Part One

Recently, my wife and I were discussing some of our financial concerns. We're concerned about the cost of food and gasoline, we're worried about affording health insurance, there are stories floating around my wife's workplace about cuts in hours, my job doesn't pay squat and other opportunities in my field are few and far between, every month we expect to be told of a significant rent increase (which hasn't come yet, happily, but we don't see how that can continue much longer), the list goes on as I'm sure many others' do as well.

It's not just individuals, either. It's institutions. Earlier in the week, the dollar sank to a new low against the Euro while Asian and European stock markets fell sharply as investor confidence in the US financial system dropped. Some investors are even questioning the value of US Treasury bonds.

Meanwhile, the FDIC has a secret list of 90 "troubled" banks, ones that are at risk of failing. We are, of course, told not to worry, the list means nothing, in fact it's a good thing because it proves the FDIC is on top of the situation. Told that, that is, by investment advisors and the banking industry, people who have a vested interest in seeing the system maintain an aura of stability - much like the classic Monty Python routine about the building maintained by hypnosis, which only remained standing because its tenants believed it would. What those Very Informed and Important People don't mention, of course, is that the reason for the secrecy is not to protect depositors (who are for the most part federally insured) but the banks. So I'm not all that reassured.

But then sometimes, such as after reading this from Reuters, I think: Just what the fuck are we complaining about?

Record growth in the world's poorest countries has failed to prevent an increase in their total numbers of poor people, the U.N. Conference on Trade and Development (UNCTAD) said on Thursday.

Recent rising food costs threaten to undercut what modest progress has been achieved, while three quarters of people living in least developed countries (LDCs) still survive on less than $2 a day, it said in a report.

That is nearly 600 million people living on an income which does not allow for meeting basic needs for food, water, shelter, health or education.

The 49 LDCs experienced record growth of 7.9 percent in 2005, followed by 7.5 percent in 2006 and a projected 6.7 percent in 2007, the report said.

However, that growth was apparently generated by rising prices for exported energy and mineral resources, not by growth in production in the underlying economy.

In fact, as compared with 10 years earlier, half of the LDCs have experienced deindustrialization, reflected in a declining share of manufacturing in GDP,

the report said.

Which means the growth was the result of inflation rather than economic expansion, and the underlying economy in half of those nations is worse that it was before. That means the growth is also very likely unsustainable, especially in light of this:

Sharp rises in food prices in 2007 and early 2008 have led the prices of staples such as maize, wheat and rice to double in some countries over the past year and a half, a severe blow to poor people spending a large share of their income on food.

"The bigger food import bills will widen further the already high trade deficits of the LDCs. This will affect all food-importing LDCs, and the balance-of-payment impact will be accentuated as countries also have to deal with rising energy prices," [the report] said.

Reuters quotes the report as citing "rapid population growth and other factors" for the failure to gain on poverty, and while population growth can matter (although the best way to reduce population growth is achieving economic security), it's those "other factors" that deserve more attention, "other factors" such as being trapped in a cycle of debt because of pressure to produce for export rather than consumption (the better to raise the capital to pay the banks) and economies built on serving elites rather than the people.

The report can be found at this link.