What Goldman Sachs should admit: it drives up the cost of food

As Goldman shareholders meet today, they should be hearing about the financial titan's exploitative business practices

Goldman Sachs has been an active speculator on the commodity markets since their deregulation in the 1990s !oday, "# $ay, is the annual general meeting %AG$& of financial speculator Goldman Sachs, the archetypal villain of the global economic meltdo'n, bailed out by (S taxpayers to the tune of )* *bn +erhaps they'll hand out last year's ,ommunity -mpact report, 'hich sho's ho' they've tried to redeem themselves 'ith charity, like serving up almost #0,000 meals and preparing about "*0,000 others in community pro.ects in the (S and around the 'orld !he irony, of course, is that 'hile they're serving up a fe' meals, their core business is virtually starving people at the same time -n "01", the (S investment bank made an estimated )/00m from speculating on food !he 0orld 1ank estimated in "010 that // million people 'ere pushed into poverty because of high food prices, and that speculation is one of the main causes Since Goldman led the drive to deregulate commodity markets in the 1990s, after constraints 'ere imposed follo'ing the 19#0s 0all Street crash, they've been at the vanguard of creating and promoting complex commodity instruments, from 'hich they've raked in huge profits 0allace !urbeville, a former vice president and the inventor of commodity index funds, has been outing the company's methods 2e says that in his time at Goldman, investment increased from )#bn in "00# to )"30bn in "004, and commodity prices rose dramatically during the same period, increasing from "003 to "004 by an average of 516 -n 1993, speculators held 1"6 of the positions on the ,hicago 'heat market, 'ith most of the market being made up of the legitimate users of food 7 from farmers to producers 1ut the legitimate hedging element of commodity markets has virtually disappeared in the intervening years 1y "011, pure speculators made up a staggering 316 of the market 8f course, Goldman Sachs isn't the only player, but it is certainly the largest

9or several years, it 'as hotly debated 'hether speculation in food commodities drives up prices 1ut the evidence no' firmly says it does, and that there's little correlation bet'een rising prices and actual supply and demand !here are no' 'ell over 100 studies 'hich agree, from sources as varied and valuable as 2arvard (niversity, the 9ood and Agricultural 8rganisation and the (nited :ations !he knock;on effect of increased speculation has meant price spikes are no' more and more common -n :ovember "01", the 0orld 1ank declared a ne' era of food price volatility 0hile regulators play catch;up on both sides of the Atlantic, financial lobbyists are doing their utmost to block progress !he <odd 9rank Act, passed in "010, imposed limits on speculation= but industry lobbyists are fighting at every pass -n September last year, .ust before ne' rules 'ould have come into effect, a 0ashington <, court ruled in favour of the -nternational S'aps and <erivatives Association and the 9inancial $arkets Association, 'hich brought for'ard a claim that the rules 'ere drafted faultily An appeal is no' pending, putting any effective regulation 'ay out into the long grass $ean'hile, across the Atlantic, as 1russels tries to bring for'ard similarly progressive regulation, the tentacles of Goldman's influence are every'here -n the (>, Goldman Sachs gave ?4 4m %)1# /m& to political parties !he (> is the primary opponent blocking 1russels; regulation against commodity speculation $embers of the @uropean parliament on the economics and monetary committee met 'ith representatives of Goldman Sachs, its lobby groups and +A companies nine times in the first six months of "010 alone 7 the year regulation 'as drafted $ean'hile, Goldman Sachs is represented on 13 industry groups that 'ere invited to .oin a Bspecial 'orking groupB to look at financial reforms for the @uropean ,ommission ,harity may be alive and 'ell, but until the regulators stand up to its influence, Goldman Sachs and its financial sector cohorts are still able to give 'ith one hand 'hile taking significantly more 'ith the other

Source: httpCDD''' theguardian comDcommentisfreeD"01#DmayD"#Dgoldman;sachs;agm; drive;food;prices;up

Questions: 1 0hat is ironic about Goldman Sachs preparing charity meals for thousands of peopleE

"

<o you think the influence Goldman Sachs has on the 1ritish government is a legitimate and common form of lobbyingE