Thursday, May 01, 2008

Ethanol Subsidies Spawn Nightmare

On March 21, 2007 I posted a short blog, Problems With Ethanol As Energy Source -
Then I posted another blog, How Bio Fuels Could Starve the Poor, which is a longer piece on the machinations of the various Socialists over the last 100 years. And it includes, of course, the usual admonition to "follow the money".

Now suddenly, even the likes of Ted Kennedy woke up and said: (I'm paraphrasing, of course) - "WTF?!!" Other esteemed Congress Critters, afraid of getting caught in the BIG LIE of the biofuel clusterfuck called Ethanol Subsidies, are screeching (also paraphrasing) "AKK!! OMIGOD..., the spector of 'UNINTENDED CONSEQUENCES' has wrapped it's diabolical tentacles around our 'Good Intentions'. Those friggin' biofuel lobbyists never told us THIS could happen!"

"THIS", of course was so obvious a child could have made the prediction that the idiots in Congress, having listened to the idiots in the CFR, would manage to screw-up the cycle of food production so badly, that world-wide famine is likely to be the end result of the ethanol subsidies. And biofuels play environmental havoc. Who knew? Well, it turns out, lots of people knew. Read the March 21st blog, which includes a Christian Science Monitor piece on how this debacle is ruining farming opportunities for young farmers in the heartland.

The Washington Times

Congress' ethanol affair is cooling

By Stephen Dinan
May 1, 2008

'UNINTENDED CONSEQUENCES': House Majority Leader Steny H. Hoyer said ethanol subsidies will be reduced in the farm bill.

Members of Congress say they overreached by pushing ethanol on consumers and will move to roll back federal supports for it — the latest sure signal that Congress' appetite for corn-based ethanol has collapsed as food and gas prices have shot up.

House Majority Leader Steny H. Hoyer said Democrats will use the pending farm bill to reduce the subsidy, while Republicans are looking to go further, rolling back government rules passed just four months ago that require blending ethanol into gasoline.

"The view was to look to alternatives and try to become more dependent on the Midwest than the Middle East. I mean, that was the theory. Obviously, sometimes there are unforeseen or unintended consequences of actions," Mr. Hoyer, Maryland Democrat, told reporters yesterday.

Only a year ago, Congress and President Bush seemed to view ethanol as a near-magic solution to the nation's dependence on oil and counted on it to make a dent in greenhouse gas emissions. Republicans and Democrats together piled up the incentives and mandates that pushed farmers into planting corn for ethanol and consumers into buying gasoline blended with it.

But as farmers switched crops, they left a dearth in other foods — which, coupled with higher worldwide living standards and higher demand — has caused food shortages. Food riots have erupted in some nations, while even in the U.S., some stores have said they will ration sales of staples such as rice.

Now the most common phrase when lawmakers talk about ethanol is "unintended consequences."

"This is a classic case of the law of unintended consequences," said Rep. Jeff Flake, Arizona Republican, who introduced a bill this week to end the entire slate of federal supports, including the mandates for blended gasoline, the tax credits for ethanol producers, and tariffs that keep out cheaper foreign ethanol.

"Congress surely did not intend to raise food prices by incentivizing ethanol, but that's precisely what's happened. A jump in food prices is the last thing our economy needs right now," Mr. Flake said.

I believe it is safe to assume that whenever "The Hill" has a stab at fixing things, a more mundane law will be manifesting: Murphy's Law.