Isn't Scumbag Capitalism brilliant?

Those paragons of virtuous capitalism, Goldman Sachs and their Wall Street cronies, continue to shock. Back in 2006 there was a sudden spike in food prices around the world. Wheat went up 80%, Maize 90% and Rice 320% within a year. As ever, the poorest suffered most. People starved. To death.

Only now is it becoming clear what happened. Johann Hari writing in the Independent explained the process in, 'How Goldman gambled on starvation'  (2/7/2010). As the sub-prime market went into free-fall, companies like these put their money into the derivatives market. "A market in 'food speculation' was born. Farmer Giles agrees to sell his crop in advance to a trader for £10,000. But now (thanks to deregulation) that contract can be sold on to speculators, who treat the contract itself as an object of potential wealth. Goldman Sachs can buy it and sell it on for £20,000 to Deutsche Bank, who sell it on for £30,000 to Merrill Lynch - and on and on until it seems to bear almost no relationship to Farmer Giles's crop at all. 

"So while the the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose - which meant the all-rolled-into-one price shot up, and the starvation began."

"So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won…..What does it say about our political and economical system that we can so casually inflict so much pain?"

"If we don't re-regulate, it is only a matter of time before this all happens again. …In Britain, where most of this 'trade' takes place, advocacy groups are worried that David Cameron's government will block reform entirely to please his own friends and donors in the city."

"Only one force can stop another speculation-starvation-bubble. The decent people in developed countries need to shout louder than the lobbyists from Goldman Sachs. The World Development Movement is launching a week of pressure this summer as crucial decisions on this are taken: text WDM to 82055 to find out what you can do." 

Go to it decent people, and lets rein these scumbags in.