The Lookout
  • Global food prices rise to unprecedented levels

    chinese food marketFood prices worldwide rose for the seventh straight month in January, up 3.4 percent from December 2010. Food prices in the global market are now the highest they've ever been. And don't look for prices to trend downward anytime soon, according to the United Nations Food and Agriculture Organization (FAO), which put out the report.

    So what's behind the surge in prices? The FAO cites a few likely factors, chief among them extreme shifts in weather patterns: intensely hot summers, longer, bitter winters, extended droughts and heavy rains. All these conditions lead to crop damage—and smaller harvests make for higher prices. Meanwhile the use of agricultural products for industrial applications—such as the transformation of corn into biofuels—has also hurt. More corn channeled into ethanol production means less corn to feed people.

    The New York Times also notes that even with supplies diminishing, expanding prosperity in places such as China and India has spiked the global demand for food—especially for meats and high-quality grains—compounding the upward price pressures.

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  • AP091123057662The for-profit education industry has spent millions over the past year to quash regulations that would withhold federal funds from colleges that saddle students with debts they cannot repay.

    The lobbying push comes at a critical moment for for-profit universities. Activists and lawmakers have called for tighter regulation of the burgeoning for-profit educational sector in the wake of a Government Accountability Office report finding that four for-profit institutions encouraged their students to lie on financial aid forms so they could get more money from the federal government. (For-profit lobbyists are suing the GAO, saying the report was inaccurate.) A Businessweek reporter also recently found that the University of Phoenix and other schools recruited students from homeless shelters and signed them up for thousands in federal loans, leaving taxpayers on the hook when the loans weren't repaid.

    The Department of Education wants to withhold some of the billions in annual federal subsidies that get disbursed to for-profit colleges that have high student debt and low loan repayment. Nearly half of all for-profit students will default on their loans, suggesting that their outstanding loans outpace their earning power.

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  • Making sense of the monthly jobs numbers

    job seekersEveryone's puzzling this morning over the government's January jobs numbers. A household survey asking a representative sample of Americans whether they're employed showed a healthy decline in the jobless rate, to 9.0 percent from 9.4 percent. But a separate survey, which asked employers about additions to their payrolls, showed that the United States added just 36,000 jobs last month—far fewer than expected, and not nearly enough to account for the 0.4 percent drop in the unemployment rate.

    So what's going on?

    Some have argued that the difference is due to changes in survey methodology. This month, the government changed its estimate of the baseline size of the U.S. population—as it does each January—to a figure nearly 100,000 lower than previous estimates. These analysts say the decrease in population brought down the unemployment rate in the household survey. In addition, December's payroll numbers were revised upward by 18,000—effectively lowering the number of jobs added in the new payroll survey.

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