The Bush Administration’s ethanol fetish is now under full ownership by the Obama Administration, and just as with the federal deficit, Homeland Security, the TSA, ad nauseam, any bad move Bush can do, Obama can do even worse (like upping the percentage of engine-damaging ethanol in each gallon of gasoline).
By far the biggest problem with ethanol is that it takes one of the world’s top staple foods — corn — and converts it into motor fuel instead. In any particular region, the staple food is the dominant portion of the diet, especially that of the poor, because it is typically easy to grow, versatile, full of calories, and inexpensive. Corn is a major ingredient in so many food items — not just corn on or off the cob, but also breakfast cereals, tortillas, chips, corn meal, untold number of goods using corn syrup, etc., and secondarily in meat and dairy, as corn is a major source of feed — that artificially removing it into ethanol production resounds to hiking food prices. It shouldn’t need to be said, but none of this should, but hiking food prices disproportionately affects the poor.
And the shame of it is now, the U.S. government’s support of ethanol has the perverse incentive of creating a dependent class among corn growers who will fight hard to keep (and expand) the program that benefits them, despite all its ill effects on everyone else.
We’re about to experience even more of those ill effects, thanks to the Obama administration:
“Today the Department of Agriculture announced that it will buy up to $100 million worth of pork products, $50 million worth of chicken, and $20 million worth of lamb and farm-raised catfish,” Obama explained to reporters in front of a drought-stricken cornfield.
“Prices are low, farmers and ranchers need help, so it makes sense,” Obama explained. “It makes sense for farmers who get to sell more of their product, and it makes sense for taxpayers who will save money because we’re getting food we would have bought anyway at a better price.”
None of this makes sense. In fact, Obama’s move only harms American consumers while protecting a corrupt federal program.
A drought is currently driving down corn production. The shortage of feed is forcing livestock producers to slaughter animals early, putting downward pressure on meat prices in the short run and guaranteeing shortages and higher prices next year. But nature is not the biggest factor in this crisis — the government is. Specifically, the federal government’s ethanol mandate, which requires that 13.2 billion gallons of corn-based ethanol be produced in 2012. …
To recap, government is driving up the cost of food, animal feed and gasoline, and Obama’s solution is to drive up meat prices as well. Obama could eliminate the entire problem overnight and reduce carbon emissions were he to waive the ethanol mandate in a time of drought. Instead, he is creating a new spending program to mollify livestock producers, who, were it not for the ethanol mandate, would be able to make an honest living without his help.