The Editors of The Wall Street Journal bring us this article on the current results of the ethanol boondoggle that has created a crisis in both oil prices and food shortages at the same time. For students of free market economics it comes as no surprise to find that government "solutions" are always less efficient than what the market provides. But as we can see from this latest eco-scam there are plenty of secondary effects as well. Like all of those starving people in the third world that the environmental leftists claim to care about as they are sipping their Starbucks lattes.
The real solution to this problem is, of course, to get the government and all of the tie-dyed activists the hell out of the way and let the best and brightest people we have in business and science do their jobs. Our energy companies have been hamstrung for decades by ridiculous government policies that have kept them from drilling for oil, building refineries and building nuclear power plants. Now we find that we are suffering from shortages in food and fuel as a result. Let us liberate the energy companies from the fascism of big government do-gooders and grey haired hippies who never bothered to take a science or economics class in their lives. Let our people in energy do what they are supposed to do; provide us with energy. And let the farmers do what they are supposed to do; grow food for us to eat. And then we won't have to worry about any shortages except the shortage of intelligence in Washington.
St. Jude is the patron saint of lost causes, and for 30 years we invoked his name as we opposed ethanol subsidies. So imagine our great, pleasant surprise to see that the world is suddenly awakening to the folly of subsidized biofuels.
All it took was a mere global "food crisis." Last week chief economist Joseph Glauber of the USDA, which has been among Big Ethanol's best friends in Washington, blamed biofuels for increasing prices on corn and soybeans. Mr. Glauber also predicted that corn prices will continue their historic rise because of demand from "expanding use for ethanol."
Even the environmental left, which pushed ethanol for decades as an alternative to gasoline, is coming clean. Lester Brown, one of the original eco-Apostles, wrote in the Washington Post that "it is impossible to avoid the conclusion that food-to-fuel mandates have failed." We knew for sure the tide had turned when Time magazine's recent cover story, "The Clean Energy Myth," described how turning crops into fuel increases both food prices and atmospheric CO2. No one captures elite green wisdom better than Time's Manhattan editors. Can Vanity Fair be far behind?
All we can say is, welcome aboard. Corn ethanol can now join the scare over silicone breast implants and the pesticide Alar as among the greatest scams of the age. But before we move on to the next green miracle cure, it's worth recounting how much damage this ethanol political machine is doing.
To create just one gallon of fuel, ethanol slurps up 1,700 gallons of water, according to Cornell's David Pimentel, and 51 cents of tax credits. And it still can't compete against oil without a protective 54-cents-per-gallon tariff on imports and a federal mandate that forces it into our gas tanks. The record 30 million acres the U.S. will devote to ethanol production this year will consume almost a third of America's corn crop while yielding fuel amounting to less than 3% of petroleum consumption.
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