Showing posts from July, 2013

GMOs: Franken food or technological savior?

Amy Harmon has a great in-depth story in the New York Times about the science and controversy surrounding GMO crops.  She builds the article around the worldwide problem of citrus greening, but nicely builds in abroader story about GMOs in general. Another great source for learning more about the GMO controversy is the book Tomorrow's Table , by Pamela Ronald and Raoul Adamchak. My own take on GMOs so far: The hysteria against them is likely overblown, but the extraordinary promises by technological optimists are overblown too.  Traditional breeding is a solid and, over the long run, often superior and less costly substitute to GMOs.  What's more worrisome to me is that intellectual property laws and regulatory costs may be acting to concentrate the seed business and make it less competitive.  These later issues are complex, not exactly my forte, and I don't presently see clear answers to any of it. Anyhow, it's nice to see good reporting on an evocative topic.

Commodity Speculation or Market Power?

After seeing how much Goldman profited from selling MBS that they knew were junk, it's hard to feel sorry for Goldman receiving so much grief  for its commodity storage and trading activities.  The worry seems to be that because Goldman has become increasingly involved in commodities markets that they must be manipulating prices for profit, and in the process pushing prices away from their fundamental values---ie., supply and demand. Do we actually know whether there is a problem here? It's possible that Wall Street is trying to manipulate the market.  But this is a hard thing to do, even for a really big company, especially one that doesn't produce the stuff it's trying to monopolize.  Also bear in mind that anyone can buy and store commodities, so it's not like there are huge barriers to entry.  Those who have tried to corner commodity markets in the past haven't fared well. My sense is that cornering a commodity market via hoarding is basically impossibl

The Farm Bill, a.k.a Hunger Games

At this point in our broader political discourse, I probably shouldn't surprised about the House's vote on the farm bill, which continues generous support for wealthy farmers and eliminates food stamps.  I'm trying to keep my blogging more positive and analytical than normative.  I think the analysis of this is pretty clear, so not much to say here that others, like Paul Krugman , have already done much better than I can. (Incidentally, the 1400+ comments on that article, many of which look very thoughtful, looks like a record to my recollection). One thing I might add:  In my career studying agricultural policy in the US, I have heard many, many economists of all political stripes lambast our agricultural subsidies.  Greg Mankiw pointed to them as one of the key areas where most economists generally agree.  But I rarely hear economists of any political stripe criticize our food stamp program.  About the harshest economic criticism I've seen as that we should giv

Macro, Multipliers and the Environment

A little follow up from my post the other day :  It's probably going too far to say investment to curb climate change, if made during a depression, is a free lunch.  But certainly the basic benefit-cost analysis for what constitutes the most efficient policy with respect to climate change, or any other environmental or public good, changes when there is another massive market failure at play.  Spending to reduce emissions would seem to have two benefits: reduced externalities plus closing the macro output gap. In some ways it feels a little like the so-called "double-dividend" hypothesis: the idea that taxing pollution can solve the environmental externality while raising revenue that can reduce distortionary income or sales taxes.  That rather compelling idea still gets kicked around a lot, and there is probably a small truth to it, although the calculation turns out to be more subtle (see Goulder's review , for example). At first blush, the macro double dividend