During 2003-08, the years when the uncontrolled greed of a handful of speculators was sending the price of commodities to intolerable levels, this columnist was among the few who pointed to such market manipulation as the cause of price fever, rather than “market conditions”. Today, it is clear that it was the greed of a few financial institutions and their managers that caused the rise in food prices that killed hundreds of thousands in Asia and Africa from starvation caused by super high food prices, and which sucked the purchasing power out of middle and lower income consumers by raising the price of oil and other commodities to levels where continued economic health was unsustainable.
The 2008 Market Crash caused not a ripple in the consciences of this handful, who continued to award themselves generous bonuses as a reward to ensuring economic disaster. Such speculation – forward trading where the speculator need not take delivery of the commodity – caused death and hardship across the world, and it was expected (not least, perhaps, by US voters) that President Barack Obama would make good on his promise to deal harshly with such economic depredators. Instead, he handed over the reins of the Treasury Department to Timothy Geithner, himself a creature of the very system that is causing a second tsunami of high prices and collapse of consumer demand to build up.
Under Geithner, the US taxpayer has underwritten nearly two trillion dollars in write-offs and advances to the very agencies that caused the speculative fever which began in 2003, after the defeat of Saddam Hussein. Now, when speculation has once more led oil prices to rise to levels nearly double that justified by market fundamentals, and when the prices of food and other commodities are once again being driven up by speculation, President Obama is silent. What is needed is to put in place curbs on pure speculation, and to enforce severe penalties on those guilty of fixing the market so as to ensure a huge increase in prices of goods essential for survival, including food grains, sugar, oils and petroleum.
Barack Obama, who sucked in hundreds of millions of dollars from millions of the poor and the middle class, will be betraying his obligation to them if he does refuse to act against the speculation that is once again leading the world to economic disaster. Should commodity prices lead to a shrinkage in consumer demand that causes an economic collapse, the responsibility will be on the “idealist” who turned the other way while greed was once more given complete freedom to operate
Along with petroleum and food grain futures markets, the pharmaceutical industry is an example of a cesspool wherein maggots ensure the death of hundreds of thousands by overpricing. Much of the “original” research done by selected pharma majors comes from public laboratories that transfer the findings to them for market development. Much more than such research, what some pharmaceutical companies is doing is to use the legal system (which can be bought in several countries teeming with the world’s poor) to block access to cheaper variants of drugs that are presently being sold for very high prices. In Asia and Africa, the unbridled freedom given to a few to milk the many has led to a manifold increase in the prices of drugs, so that several deaths are being caused daily because of lack of affordable treatment. This in a time when hysteria has been created about “new” viruses, such as that for H1N1. If the millions now wearing masks because of the Swine Flu scare would bother to take analogous precautions against contracting a disease that has killed many, many more people each year (AIDS), public health would have improved substantially. But, because of the success of the poor who managed to ensure cheaper drugs to retard the disease than were being offered by the handful of “killer” pharma companies, there is no financial incentive to whip up a hysteria the way it has happened with Swine Flu. Should the treatment for Swine Flu be made affordable rather than extortionate (it costs $200 for a positive test in India, a desperately poor country with a population in excess of 1.16 billion), we can be sure that the sponsored hype about the disease will abate.
To expect President Obama to do much about such depredation may be asking for too much, from a President whose first actions were to compromise with his worst critic (Hillary Clinton) and appoint a crony of financial speculators as his Treasury Secretary. It would be too much for Third World governments, almost all of whom are deep in corruption, and therefore easily manipulated by selected pharmaceutical giants, or for the listless, starving populations of Third World countries. The only chance for salvation from speculators and price gougers can come from public opinion in the US and the EU. The overwhelming majority of the populations in both are idealistic and unwilling to accept unethical behaviour, if told the truth. They need to mobilise opinion against (1) speculators in food, petroleum and raw materials, and (2) price gougers in drugs needed for epidemics and for serious illnesses. Only by such action can the rest of humanity be rescued from the present misery.
What is impermissible is that the world continues its slide towards economic disaster, because speculators are once again driving up commodity prices. What is intolerable to any civilised society is to watch idly by while a few push up drug prices so high that millions go untreated. During the two decades that ended with the defeat of the Nazis, there were some who profited from the death and loot that the Nazis indulged in, their consciences untroubled despite knowledge of the source from which these profits were coming from. Today, a similar mindset is at work, and in many of the locations guilty of profiteering from genocide during the World War II. This time, civilised people must act, before hundreds of thousands more perish. President Obama, please watch your own speeches, then search your conscience, and shed the paralysis that has come upon you.