Could all those bailout billions been put to better use? How about feeding poor, starving people?
"The amount of money used for the bailouts in the U.S. and Europe -- people here are saying that money is enough to feed the poor in Africa for the next three years," said Stephen Muchiri, head of the Eastern Africa Farmers Federation.
No question: On its face, there is an obscene disparity between the trillions of dollars that will be spent by Western governments to keep financial markets from breaking down and the paltry $12.3 billion pledged in July by governments and other donors in Rome to tackle the world food crisis. Even just in the United States, the Department of Energy appears to see little problem with loaning GM $5 billion to purchase a nearly worthless Chrysler, but the White House couldn't find the cash to expand the State Children's Health Insurance Program from $5 billion to $12 billion a year so as to cover everyone. These are the kinds of funding gaps that drive caring people insane.
But suppose that the U.S. and various European governments had decided not to bail out their banking systems, and in consequence, credit markets completely collapsed and world trade ground to a halt. It's quite possible that global poverty and hunger would drastically worsen. If farmers have no access to credit, they are unable to pay for seed and fertilizer and labor. If shipping companies have no access to credit, food doesn't move across the oceans. If enough banks collapse, mass unemployment is sure to follow.
I do not mean to privilege one form of spending over another. I think one of the clear lessons from the efforts of governments to address the financial crisis is that when properly motivated, political leaders will throw astonishing amounts of money at a problem. If we can find $700 billion to bail out our banks, surely we can fund national health care and end starvation. But it's also not an either-or question. We would all likely be worse off, in Africa and the United States, if the wheels came completely off the global economy.