Farmer in Chief

http://www.nytimes.com/2008/10/12/magazine/12policy-t.html

October 12, 2008

The Food Issue

By MICHAEL POLLAN

Dear Mr. President-Elect,

It may surprise you to learn that among the issues that will occupy much of your time in the coming years is one you barely mentioned during the campaign: food. Food policy is not something American presidents have had to give much thought to, at least since the Nixon administration — the last time high food prices presented a serious political peril. Since then, federal policies to promote maximum production of the commodity crops (corn, soybeans, wheat and rice) from which most of our supermarket foods are derived have succeeded impressively in keeping prices low and food more or less off the national political agenda. But with a suddenness that has taken us all by surprise, the era of cheap and abundant food appears to be drawing to a close. What this means is that you, like so many other leaders through history, will find yourself confronting the fact — so easy to overlook these past few years — that the health of a nation’s food system is a critical issue of national security. Food is about to demand your attention.

Complicating matters is the fact that the price and abundance of food are not the only problems we face; if they were, you could simply follow Nixon’s example, appoint a latter-day Earl Butz as your secretary of agriculture and instruct him or her to do whatever it takes to boost production. But there are reasons to think that the old approach won’t work this time around; for one thing, it depends on cheap energy that we can no longer count on. For another, expanding production of industrial agriculture today would require you to sacrifice important values on which you did campaign. Which brings me to the deeper reason you will need not simply to address food prices but to make the reform of the entire food system one of the highest priorities of your administration: unless you do, you will not be able to make significant progress on the health care crisis, energy independence or climate change. Unlike food, these are issues you did campaign on — but as you try to address them you will quickly discover that the way we currently grow, process and eat food in America goes to the heart of all three problems and will have to change if we hope to solve them. Let me explain.

GM, Ford, Chrysler Face Bankruptcy Risk on Crisis

By Jeff Green and Greg Bensinger

Oct. 10 (Bloomberg) — General Motors Corp., Ford Motor Co. and Chrysler LLC, the three biggest U.S. automakers, may be forced into bankruptcy as the global credit freeze damps U.S. sales, Standard & Poor’s analyst Robert Schulz said.

“Macro factors could overwhelm them at some point” even as GM, Ford and Chrysler vow to stick with their turnaround plans, Schulz, S&P’s lead automotive credit analyst, said today in a Bloomberg Television interview in New York. The companies said they have no plans to seek bankruptcy protection.

His assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. S&P said yesterday it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest since 1992.

With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a “strategic” decision, Schulz said.

“We don’t see that as something they would choose,” he said. Schulz said the “trigger” for a forced restructuring under bankruptcy protection would be based on the automakers’ ability to preserve liquidity as

Russian president Dmitry Medvedev calls for Europe to freeze out US

http://www.telegraph.co.uk/news/worldnews/europe/russia/3159998/Russian-president-Dmitry-Medvedev-calls-for-Europe-to-freeze-out-US.html

By Adrian Blomfield in Moscow
Last Updated: 6:33PM BST 08 Oct 2008

President Medvedev blamed Washington’s ‘economic egotism’ for the world’s financial woes Photo: AP

Confident that a spat with Europe prompted by Russia’s invasion of Georgia in August was over, Mr Medvedev arrived in the French spa town of Evian determined to woo his fellow leaders into creating an anti-US front.

Gone was the kind of war time rhetoric that saw Mr Medvedev lash out at the West and characterise his Georgian counterpart Mikheil Saakashvili as a “lunatic”. Instead Mr Medvedev spoke of a Russia that was “absolutely not interested in confrontation”.

Yet there was little doubt that Mr Medvedev was playing the divide-and-rule tactics of his predecessor Vladimir Putin by seeking to pit the United States against its European allies.

US debt clock runs out of digits

http://news.bbc.co.uk/2/hi/business/7660409.stm

The US government’s debts have ballooned so badly the National Debt Clock in New York has run out of digits to record the spiralling figure.

The digital counter marks the national debt level, but when that passed the $10 trillion point last month, the sign could not display the full amount.

The board was erected to highlight the $2.7 trillion level of debt in 1989.

The clock’s owners say two more zeros will be added, allowing the clock to record a quadrillion dollars of debt.

Douglas Durst, son of the late Seymour Durst – the clock’s inventor – hopes to replace the Manhattan clock with its lengthier replacement early next year.

For the time being, the Times Square counter’s electronic dollar sign has been replaced with the extra digit required.

For its part, the digital dollar symbol has been supplanted by a cheaper version – perhaps a sign of the times for the American economy.

Some economists believe the $700bn bail-out plan for ailing US financial institutions could send the national debt level to $11 trillion.

Banking crash hits Europe as ECB loses traction

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3104666/Banking-crash-hits-Europe-as-ECB-loses-traction.html

The global credit crisis has slammed into Europe with stunning violence over the last two days, triggering five major bank rescues and a near total shut-down of the region’s credit markets.

The Dutch-Belgian bank Fortis, Britain’s Bradford and Bingley, and Iceland’s Glitnir, were all partially or fully nationalized after failing to roll-over debts in the short-term money markets, while the French state pledged support for the Franco-Belgian lender Dexia after the share price collapsed on reports of a capital shortage.

“The European financial sector is on trial: we have to support our banks.” said French President Nicolas Sarkozy. He has reportedly ordered the state investment arm Caisse Des Depots to shore up Dexia, even though the bank is based in Belgium.

Germany’s Hypo Real Estate, a commercial property lender, was rescued with a €35bn lifeline from a consortium of local banks. The lender has $560bn in liabilities, almost as much as Lehman Brothers.

Hypo Real’s share price crashed 74pc, setting off a masse exodus from financial stocks in Frankfurt. Commerzbank fell 23pc and Aareal Bank was off 43pc.

US Economy: Even Hank Paulson’s bail-out plan cannot detox global banking

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3088685/US-Economy-Even-Hank-Paulsons-bail-out-plan-cannot-detox-global-banking.html

Even if Congress backs the Paulson bail-out, the $700 billion blast cannot save the US, Britain or the world from the deepest economic slump since the Thirties. If Congress balks, God help us. The credit system is suffering a heart attack. Inter-bank lending is paralysed. Funds are accepting zero interest on US Treasury notes for the first time since Pearl Harbour, because no bank account is safe.

Wherever you look – dollar, euro, sterling Libor (the rate at which banks lend to each other), or spreads on credit derivatives – the stress has reached breaking point. If borrowers cannot roll over the three-month loans that are the lifeblood of business, they will default en masse.

Cartoon of the Month

Pakistani and American Troops Exchange Fire

By ERIC SCHMITT

WASHINGTON — Pakistani and American ground troops exchanged fire along the border with Afghanistan on Thursday, a top American military official said, ratcheting up tensions as the United States increases its attacks against militants in Pakistan’s restive tribal areas.

The clash started after the Pakistanis fired shots or flares at two American helicopters that Pakistan says had crossed its border.

The two American OH-58 Kiowa reconnaissance helicopters were not damaged and no casualties were reported.

But American and Pakistani officials agreed on little else about what happened.

American and NATO officials said that the two helicopters were flying about one mile inside Afghan airspace to protect an American and Afghan patrol on the ground when the aircraft were fired on by troops at a Pakistani military checkpoint near the Tanai district in Khost Province. The officials said small-caliber arms were used.

In response, the American ground troops shot short bursts of warning fire, which hit well shy of the checkpoint, and the Pakistanis fired back, said Rear Adm. Gregory Smith, a spokesman for the United States Central Command.

But a spokesman for the Pakistani Army, Maj. Gen. Athar Abbas, said Pakistani forces fired warning shots at the American aircraft after they crossed into Pakistan’s territory in the area of Saidgai, in the Ghulam Khan region of North Waziristan. “On this, the helicopters returned fire and flew back,” General Abbas said. The general’s statement did not address the account of ground fire.

Local residents said that one of the two helicopters had entered inside Pakistan territory by about a mile, while the other hovered on the Afghan side of the border.

“When our forces fired warning shots, we were a little scared of a possible retaliatory fire from the helicopters,” said one of the residents, Hajji Said Rehman Gorbaz. “But we were happy to see the helicopter flying back into Afghanistan. We were happy that our forces fired at the helicopter.”

Pakistan’s president, Asif Ali Zardari, said Thursday that his nation’s military had fired only flares at the helicopters, seeming to draw a distinction with warning “shots,” which usually refers to bullets or other ordnance that could more seriously damage the helicopters.

“They are flares,” Mr. Zardari said as he sat down to meet Secretary of State Condoleezza Rice at the United Nations. He said the flares would alert the pilots that they had crossed the border, which he said is rugged and poorly marked.

Ms. Rice agreed that the border between Pakistan and Afghanistan was “very, very unclear.”

But the encounter drew immediate protest from Pentagon officials in Washington. “The flight path of the helicopters at no point took them over Pakistan,” a Pentagon spokesman, Bryan Whitman, told reporters.

Mr. Whitman said United States and NATO military officials were speaking to their Pakistani counterparts to determine what happened and to ensure there was no repeat, adding, “The Pakistanis have to provide us with a better understanding of why this took place.”

General Abbas, the Pakistani spokesman, said the clash had been reported to NATO headquarters in Kabul and was under investigation by Pakistani and NATO officials.

Military officials and diplomats said the episode showed there was a risk of a much more serious, and lethal, misunderstanding along the border.

Pakistani civilian leaders have denounced an incursion by American Special Operations forces into Pakistan on Sept. 3, which was authorized under orders given by President Bush in July, and the Pakistani Army has vowed to defend its border.

Yousaf Raza Gilani, Pakistan’s prime minister, told reporters on Wednesday, “We will not tolerate any act against our sovereignty and integrity in the name of the war against terrorism.”

The United States says its goal is to stop attacks on troops in Afghanistan by Al Qaeda and by Taliban militants based in Pakistan.

The latest clash on Thursday comes after a week of claims by Pakistani intelligence officials that American helicopters had strayed across the border, and that an American remotely piloted surveillance aircraft had crashed, apparently because of a mechanical failure, in Pakistani territory.

American officials denied these claims, saying they were being manufactured by Pakistani officials in response to rising anti-American sentiment in Pakistan after the increased American activities in the border area.

Thom Shanker contributed reporting from New York, Salman Masood from Islamabad, Pakistan, and Ismail Khan from Peshawar, Pakistan.

US dollar set to be major casualty of Hank Paulson’s bailout

http://www.telegraph.co.uk/finance/economics/3062121/US-dollar-set-to-be-major-casualty-of-Hank-Paulsons-bailout.html

By Edmund Conway
Last Updated: 10:47PM BST 22 Sep 2008

Whether or not tomorrow’s accounts of today’s turmoil prove David Owen of Dresdner Kleinwort right; whether or not this is the beginning of the end of the dollar’s pre-eminence in the world’s central banks and foreign exchanges, the economic landscape has undoubtedly changed forever.

The US taxpayer bail-out of America’s banking sector is an event whose significance will reverberate for many years. What it means for free markets, for the way Western economies are run, for the prosperity of the world economy, must remain to be seen.

But as investors scrambled to make sense of last week’s events, already one conclusion was all but irrefutable – the US dollar will have to take another major fall.

Ron Paul Discusses Financial Turmoil and the Fed 9/18/08