The Law Of Unintended Consequences, Again

From The Patriot Post, 02-08-08, more at: http://patriotpost.us/


In recent weeks, environmentalist groups are realizing Federal biofuel and ethanol mandates have the potential to do far more harm than good.

Initially the idea made a fair amount of sense; use a portion of our abundant corn crops to produce ethanol as an alternative to oil. Thereby reducing greenhouse emissions, in addition to reducing our reliance on foreign oil.

Pressured by the environmentalist folks and their allies, the federal government enacted a series of ethanol subsidies. Thereby causing market confusion with unpredictable and changing government mandates and subsidies.

Farm subsidies are sacred to politicians, but the consequences of this “solution” are now obvious, and even environmentalist groups have begun to complain.

Rising demand for ethanol means a rising demand for corn and a corresponding rise in corn prices, in and out of this country. Those who eat tortillas made from corn have been particularly affected.

The resulting increase in food prices have have caused farmers to increase their land useage and causing increased environmental damage.

If America’s entire grain harvest were devoted to ethanol production, it would replace only 18 percent of our automotive demand for oil.

Most importantly, the ethanol fiasco reveals the ineptitude of centralized government when it comes to running the market. Remember, the USSR used a centralized government to control their markets among other things.

The laws of supply and demand are enough to handle our energy troubles, so long as the market is free from government interference. Otherwise, we will continue to suffer from the Law Of Unintended Consequences.