The global matrix of food price manipulation and subsidies has produced two casualties; a billion starving people in countries in Africa and around the world and a billion people eating themselves to death in countries like America.

This is classic market-failure. Food is too cheap in the U.S. and too expensive in Africa. In a true, free market capitalist system, Adam Smith’s ‘invisible hand’ would come into play and global food prices would ‘clear’ at levels where Americans could not afford to eat themselves into diabetic comas and Africans wouldn’t be wasting away.

The culprit jamming up the works of free markets are U.S. and European farm subsidies. American farmers get free billions from the government, a holdover from the New Deal when American farmers were suffering like their African counterparts today. Even though farming in America became self sufficient decades ago, the subsidies are still in place because the corporations who indulge in this corporate farm welfare from the Feds are not fond of competing. Apparently they don’t like Africans much either.

As a result of the subsidies, the price of corn, and in particular HFCS (High Fructose Corn Syrup) is so cheap, processed food manufacturers in the U.S. can afford to inject it into virtually all processed food, hence the obesity problem. Meanwhile, when food from Africa appears on the market to sell, it doesn’t get sold because the price can’t compete with the subsidy-enabled ‘death price’ of U.S. food.

You can see the machinations of food price subsidies working in the U.S. economy in subtle ways. For example, this story from the Chicago Tribune:

“Despite soaring prices of everything from cheese to chicken, McDonald’s executives said Thursday they will spare consumers the brunt of food cost hikes, and have no plans to tamper with the firm’s vaunted dollar menu.”

The only way this is possible is if the company, and the agribusiness-men who sit on each other’s board of directors collude and then either directly or indirectly subsidize food costs by shaking down the government for some more subsidies (Congress just gave farmers another free 300 billion last week), or they do it by leveraging their balance sheets with more derivatives trading (financial derivatives are the High Fructose Syrup of Wall Street), in a sense borrowing their way to lower costs using off-balance sheet financial gymnastics.

If the derivatives blow up, it doesn’t matter because they no longer own them (after securitizing and selling them). Who ever does own them (Calpers?) will get bailed out by the U.S. tax payer after they blow up (as part of the government’s multi-hundred billion dollar welfare-for-Wall Street program) resulting in even greater market failure.

Many of the loans on Bear Stearns books were collateralized, in essence, by starving Africans and Obese Americans. And now that the obese in America will see their taxes go up (or purchasing power go down via high inflation to bail out the bankers) it’s plain to see that the tax-adjusted price of the ‘cheap’ McDonald’s food is the same, or more, as non-HFCS injected food. Was the toy in the Happy Meal worth it?

Hollywood doesn’t help. I noticed that in this summer’s blockbuster Iron Man the billionaire hero, after flying to the Mid-East and killing lots of dark skinned people wants only to return to America and chow down on some Burger King. If you connect the dots, you begin to understand that it’s food subsidies gifted to food companies in the U.S., at the expense of farmers around the world, that causes, in part, the rising tide of violence against those responsible for the food price manipulation. If American farmers in the U.S. competed fairly in the global food business the overall level of violence around the world would go down, in my opinion.

But in an economy like the one in America where 50 cents of every tax dollar goes to war, is that really a desired outcome?