Two economists whom we respect recently pointed out a very important aspect to the current situation in Egypt and the Middle East, namely the role that inflation (particularly inflation in the cost of food) plays in the larger picture.
Rising food prices can be the straw that breaks the camel's back (so to speak), increasing the pressure on the public with every single meal, and creating a catalyst for action against other forms of government oppression.
Economist Larry Kudlow recently wrote a noteworthy post on this subject, entitled "Food riots: is Bernanke partially to blame?"
Economist Brian Wesbury sounds a similar note in his most recent weekly outlook, entitled "Egypt, dollars, and history." He points out that the Fed's easy monetary policy has contributed to a 66% rise in the Goldman Sachs Agricultural Index over the past six months, the most for any six-month period since 1974. He also notes that the disastrous revolution in Iran in 1979, which led to the establishment of the far-more oppressive tyranny that still grips that country, took place during the hyperinflation of the 1970s.
As Larry Kudlow writes, "a region-wide revolt against the autocrats may be healthy if it leads to greater democratization and liberalization," but that outcome is by no means certain or even likely.
It is important to recognize that seemingly-esoteric economic issues, such as the over-steering of monetary policy by the Federal Reserve -- as well as the decision to subsidize and mandate the increased use of food as fuel -- impact people all over the world, with numerous unintended consequences, some of which can be deadly.
Rising food prices can be the straw that breaks the camel's back (so to speak), increasing the pressure on the public with every single meal, and creating a catalyst for action against other forms of government oppression.
Economist Larry Kudlow recently wrote a noteworthy post on this subject, entitled "Food riots: is Bernanke partially to blame?"
Economist Brian Wesbury sounds a similar note in his most recent weekly outlook, entitled "Egypt, dollars, and history." He points out that the Fed's easy monetary policy has contributed to a 66% rise in the Goldman Sachs Agricultural Index over the past six months, the most for any six-month period since 1974. He also notes that the disastrous revolution in Iran in 1979, which led to the establishment of the far-more oppressive tyranny that still grips that country, took place during the hyperinflation of the 1970s.
As Larry Kudlow writes, "a region-wide revolt against the autocrats may be healthy if it leads to greater democratization and liberalization," but that outcome is by no means certain or even likely.
It is important to recognize that seemingly-esoteric economic issues, such as the over-steering of monetary policy by the Federal Reserve -- as well as the decision to subsidize and mandate the increased use of food as fuel -- impact people all over the world, with numerous unintended consequences, some of which can be deadly.
