“How Al Gore is Getting Fat off of a Starving World”

Written by Brian on June 1, 2008 – 11:03 am -

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A wonderful column by Jerry Bowyer on Townhall on the ethanol crisis. The guy definitely knows his economics.

Foods seem to be rising in price in direct proportion to their proximity to ethanol subsidies. Feed grain is up an amazing 41% in the past year. Fruit and nuts are down 3% over the same period. Why? Because we turn corn into ethanol, but we don’t do the same with walnuts or bananas.

Here in the center of the world economy, this means high food prices. Out at the edges, it means famine. When food gets expensive here, we tap into a little more credit, or perhaps skip restaurants for awhile. When food gets expensive in Malaysia, they riot in the streets. When food gets too expensive in Cape Town, some men take to the streets in violent roving bands, maiming and murdering refugees who’ve come from other countries in search of something to eat.

So much for liberals as the caretakers of the world’s poor.

And then on the familiar “it’s the dollar” argument:

It’s not the dollar either. Yes, the dollar is a problem; the Treasury Secretary and the Fed have neglected it. But the falling dollar isn’t causing these price spikes. First of all, the world’s hungry don’t trade in dollars. They trade in Ringits, Bahts, Yuan, Rubles and Rands. Foreigners are not starving because the dollar lost value. In fact, the drop in the dollar helps them. And it’s not even the dollar that’s the problem here in America either. We generally export food, especially grains. But Americans are getting hit with the worst price spikes in precisely those agricultural sectors where we supply our own food. We’re the bread basket of the world! I’m sorry, but when I buy high fructose corn syrup from Iowa, it doesn’t involve the foreign exchange markets.

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Posted in US News and Liberal Debacles |

3 Comments to ““How Al Gore is Getting Fat off of a Starving World””

  1. rsteenblik Says:
    June 1st, 2008 at 7:56 pm

    Jerry Bowyer may know his economics (and I agree by and large with his assessment of the problems being created by government support for biofuels), but he either knows little about or chooses to ignore the real politics behind it.

    The USA’s biofuel support policies trace back to the late 1970s and early 1980s. They have been renewed and extended through every Congress — whether Republican or Democrat dominated — and by every President since Jimmy Carter. One of the biggest promoters of biofuels, in fact, has been the guy who mentioned them in at least two of his most recent State of the Union speeches: President George W. Bush. He remains a “true believer”, even while grain and oilseed prices keep to historic levels.

    Environmentalists have very little to do with the policy. It has been been driven mainly by the interests of the farm states (and the Detroit automakers), and has enjoyed their bi-partisan support. Some environmentalist groups (by no means all) were co-opted to support biofuels because they liked the idea that they were “renewable”. But many more people were made tacit supporters of biofuels when they bought into the dream that building up domestic biofuel production would make the United States energy independent. Everybody thinks that the USA can replicate what Brazil has done.

    To learn more about the history of U.S. subsidies and mandates for ethanol, see the two reports by the Global Subsidies Initiative, which can be downloaded from its website free of charge:

    http://www.globalsubsidies.org/article.php3?id_article=40&var_mode=calcul

  2. Brian Says:
    June 2nd, 2008 at 11:57 am

    I agree entirely: it is a bipartisan problem. Yet another wasted opportunity for the Presidency of George W. Bush.

  3. rsteenblik Says:
    June 2nd, 2008 at 2:12 pm

    If you agree that this is a bipartisan problem, then why the gratuitous “So much for liberals as the caretakers of the world’s poor”?

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