“We’ve now hitched the price of corn, inextricably linked the price of corn, to the price of crude oil, and I think we can’t turn the clock back, that’s the way it is.”
With corn prices more closely tied to oil prices, when the price of gas goes up, it raises the demand for ethanol – and that means consumers will feel it in two places: at the gas pump and on the dinner table.
A nice affirmation for CEI’s Murray & Yeatman, June 14 2007
Food prices today are rising steeply because Congress decided to link the price of food with the price of oil. As a result, now whenever the price of oil increases, food prices follow.
The subsidies involved in this area include trade protection from more efficient foreign competition, corn production subsidies for farmers, subsidies for ethanol production, and subsidies for other farmers such as beef producers while smacking other farmers in several other ways, not least of which is feed costs, to ensure at least theirs isn’t a free lunch. All of which causes higher prices for beef, poultry, and other corn based products, and indeed most other meat and produce.
If there has ever been a case study against subsidies, ethanol is it. If ever there has been a time to pull the plug on such harmful waste, now is it. This is unspeakably bad for all but a very small handful of rent-seeking (corporate-welfare case) Americans, to the inescapable overall detriment of the country. Even the environmentalists have backed away from it in a moment of lucidity.
But our political class just extended the two expiring (of three direct) prop-ups the harmful, phony industry receives, while the administration makes things even worse — ensuring a flood of consumer lawsuits against auto and other power-equipment manufacturers, and fuel retailers (who instead of saying no to a bad idea are instead seeking liability protection in Congress from what’s to come)– by ensuring a more moonshine-heavy fuel will be the stuff you pump to your own expense and inconvenience, as I discussed on Fox News Channel’s “Cavuto” show earlier this week.
And a dozen folks are about to traipse to Iowa to pray fealty to the god-slash-phony-industry of ethanol subsidy. Turning our back on this could help stop the hemorrhaging our politicians are creating, and worsening, as more and more phony ‘renewable’ industries are created, slopping at the trough.
Instead, in the past week or so Congress added billions more for ethanol’s cousin, windmills. Can’t say no to ethanol, so they can’t (somehow) justify saying no to other boondoggle, either. Something is very wrong here. This coming year or so has to bring an open debate on the insanity of what passes for energy policy. We will be much the worse for it, for many years to come, if we do not force responsibility among our policymakers at this moment in time.
