1 Biggest fall in food prices since 2008 (BBC) Last
month saw a 5.2% fall in global food prices, the biggest drop in seven years,
according to the UN. Its Food and Agriculture Organization (FAO) saw monthly
falls in all major commodities, from milk and vegetables to oils, sugar and
cereals.
Food producers are being hit by slowing demand in
China and a Russian embargo on Western products. Now the European Commission is
to release €500m ($557m) to help Europe's farmers. The commission said the most
significant part of the package would support the dairy sector in all EU member
states. Dairy farmers have suffered a 20% fall in European wholesale milk
prices in the past year.
The European Commission aid comes on top of extra
help for European fruit and vegetable farmers, who have been hit by the Russian
embargo on Western food imports in retaliation for EU and US sanctions over the
crisis in Ukraine. Farmers across Europe have been protesting in recent weeks
against the plunging prices that they say are destroying their businesses.
The falling prices are unlikely to be reversed any
time soon. The FAO said in a statement: "Ample supplies, a slump in energy
prices and concerns over China's economic slowdown all contributed to the
sharpest fall of the FAO Food Price Index in almost seven years."
The FAO has raised its forecast for world cereal
output in 2015 to 2.54 billion tonnes, thanks to what looks like good wheat and
rice harvests in Argentina, Brazil and the US.
2 Fed must worry about inequality, not inflation
(Joseph Stiglitz in The Guardian) Seven years after the global financial crisis
triggered the Great Recession, “official” unemployment among AfricanAmericans
is more than 9%. According to a broader (and more appropriate) definition,
which includes part-time employees seeking full-time jobs and marginally
employed workers, the unemployment rate for the US as a whole is 10.3%.
But, for African Americans – especially the young –
the rate is much higher. For example, for African Americans aged 17 to 20 who
have graduated from high school but not enrolled in college, the unemployment
rate is over 50%. The “jobs gap” – the difference between today’s employment
and what it should be – is three million.
The Fed has a dual mandate – to promote full
employment and price stability. It has been more than successful at the second,
partly because it has been less than successful at the first. So why will
policymakers be considering an interest rate hike at the Fed’s September
meeting?
The usual argument for raising interest rates is to
dampen an overheating economy in which inflationary pressures have become too
high. That is obviously not the case now. Indeed, given wage stagnation and the
strong dollar, inflation is well below the Fed’s own 2% target.
If the Fed focuses excessively on inflation, it
worsens inequality, which in turn worsens overall economic performance. Wages
falter during recessions; if the Fed then raises interest rates every time
there is a sign of wage growth, workers’ share will be ratcheted down – never
recovering what was lost in the downturn.
I often feel a great deal of sympathy for Fed
officials, because they must make close calls in an environment of considerable
uncertainty. But the call right now is not a close one. On the contrary, it is
as close to a no-brainer as such decisions can be: now is not the time to
tighten credit and slow down the economy.
3 Giving compliments without causing offence (Gaby Hinsliff
in The Guardian) Here are three simple rules that should keep most men out of
trouble. First, if you need to preface something with the words “horrendously
politically incorrect”, then you probably don’t want to be saying it to a total
stranger in a work context.
Second, if you routinely compliment someone on their
looks but never on their thinking, you’re basically saying that you don’t take
them remotely seriously. Amazingly, people dislike this.
And third, as ever, it’s all about tone and context.
From someone junior at work, “nice dress” can be smarmy; from someone senior,
it can be faintly pervy.
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