C-rice-es?

The recent natural disasters in Burma and China not only destroyed the food stocks of the disaster areas, they also ruined many planted fields. On top of all this, there may be a famine looming in North Korea. Will these tragedies exacerbate already high food prices?

Why not ask the people who have money on the line? Check out this summary of Powershares DB Agriculture, an ETF tracking agricultural futures markets. On May 2 and May 12, the respective dates of the Burmese and Chinese disasters, the fund was flat. It looks like the disasters weren’t enough to buck the general downward trend over the last six months. Apparently farmers worldwide are expecting bumper crops, so agricultural products are expected to become cheaper after harvest this fall.

Interpreting Large Numbers: Myanmar Cyclone Edition

Imagine 44 full double-decker 747’s:

If all these airplanes crashed with no survivors, the death toll would equal that of Myanmar’s cyclone as reported this evening (500 passengers and crew per plane x 44 planes = 22,000 victims).

Experts Schmexperts

ABC News reports:

Sen. Hillary Clinton, D-N.Y., declined this morning to name a single economist who backs her call for a gas tax suspension.

“I’m not going to put my lot in with economists,” Clinton said in an exclusive appearance on a special edition of “This Week” from Indianapolis.

Can we expect Senator Clinton to follow this logic further? Will she not put her lot in with doctors when she needs surgery, not put her lot in with accountants when doing her taxes, or not put her lot in with lawyers when going to court?

If you are relatively uninformed on a particular topic, it is rational to heed the opinions of experts. Experts won’t be correct all the time, but they will be correct more often than you are. Virtually all economists oppose the gas tax holiday as at best useless in lowering gas prices for consumers and at worst as a transfer of American government revenue to OPEC.

I suspect Clinton doesn’t expect the tax holiday to work, but she expects the rhetoric of the debate to cast her as being on the side of poor Americans. Maybe she would denounce her doctor’s opinion if she thought that would get her elected.

For a summary of economists’ opinions about why the gas tax holiday is a bad idea, check out this Economist blog.

Hat tip: Greg Mankiw