Oil, food, electricity

In a terse economic analysis, Paul Krugman leaves out the emotional impact of starvation in discussing food supply. He also talks about the broad economic forces that are no one's fault. But this rang a bell:

Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed.

The same thing happened with oil supplies. Costs money to store the stuff, so use tankers as if they were your tank farm.

Enron and others manipulated the California deregulation to constrict supply, too, and we know what the result was.

The people who run the companies with market power in all these markets for products with inelastic (and growing) demand love price volatility. Because demand for these commodities is pretty close to fixed, low supply brings big price spikes and obscene profits. If Enron had had a few more Californias, it would still be doing its evil and rolling in dough. The oil companies are sucking up huge profits from all our wallets. People in the third world are having trouble affording enough to eat.