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post #1 of 36 (permalink) Old 02-07-2007, 04:16 PM Thread Starter
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Ethanol and the law of unintended consequences

http://article.nationalreview.com/?q...JjYTAxN2UwNjU=

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Stick Ethanol in the Museum of Unintended Consequences
Washington has found a way to raise the price of fuel and tortillas at the same time.

By Deroy Murdock

Many Democrats and some Republicans applauded President Bush’s State-of-the-Union proposal for a 20 percent reduction in gasoline use over the next ten years, largely through greater reliance on ethanol.

Bush’s idea, however, is adding corn-based fuel to the fire in Mexico City. Existing federal laws that mandate ethanol in U.S. gasoline have diverted trainloads of corn from America’s food supply-chain to ethanol factories. This boosted U.S. corn prices nearly 80 percent in 2006.

That’s bad enough if you buy corn on the cob for a weekend barbecue. But it’s much worse if you are a poor Mexican surviving on corn tortillas. The price of a kilo (2.2 pounds) of tortillas recently has shot up 55 percent, from 5.5 to 8.5 pesos. Poor Mexicans are not taking this sitting down.

In fact, some 75,000 of them stood up on January 31 in Mexico City’s giant Zocalo plaza. More than 200 unions and social-action groups organized protests to denounce the rising price of this basic Mexican staple.

“[Felipe] Calderon stole the elections, and now he’s stealing the tortillas!” screamed one banner, chiding Mexico’s narrowly elected, new president. According to the Associated Press, the normally free-market Calderon has been trying to get manufacturers to follow a gentlemen’s agreement to keep tortilla prices flat.

How has American energy policy inspired political instability in Mexico? This is a pristine example of The Law of Unintended Consequences. When big government does big things, all sorts of wacky stuff happens, and rarely for the good.

Uncle Sam gives ethanol manufacturers a 51-cent-per-gallon subsidy. Anyone who wants to import ethanol is welcome to — provided he pays the 54-cent-per-gallon tariff slapped on ethanol imports. This is one reason for another unintended consequence: gasoline prices shot up last summer since ethanol, largely produced in the Midwest, had to be shipped south and to both coasts to be blended, by law, with gasoline. Importing Brazilian ethanol into Atlantic and Pacific ports would have made sense, but then-House Speaker Dennis Hastert hated the idea, since that would put competitive pressure on his corn-farming Illinois constituents.

“I don’t see an economic plus in it right now,” Hastert sniffed.

What other unintended consequences could the federal government’s ethanol-mania propel?

First, poor Mexicans will feel even poorer as tortilla prices stay high or climb even higher. At the margin, watch for more of them to throw up their hands and head north, to a neighborhood near you.

Second, as fuel companies buy more and more corn, prices will rise for corn flakes, corn bread, popcorn, corn syrup, and other food items. Grocery bills should grow, at least marginally.

Third, humans eat corn, but so do cows, pigs, and chickens. Meat prices will rise, hurting U.S. consumers and making American meat exports less competitive on world markets.

Fourth, if they have not already, members of the Federal Reserve Open Market Committee will notice these increases in consumer and producer prices. Fearing inflation, they could start increasing interest rates. That would slow the economy and push into foreclosure more Americans with variable home mortgages.

This economic damage will accelerate if President Bush promotes, or if the federal government mandates, a one-fifth drop in gasoline use by 2017. According to estimates by Cato Institute scholars Jerry Taylor and Peter Van Doren, writing in the Winter 2007 issue of The Milken Institute Review, “If all the corn produced in America in 2005 were dedicated to ethanol production…it would have reduced U.S. demand for gasoline by, at most, 12 percent.” So, to reach Bush’s 20 percent goal, corn production must grow to 167 percent of its 2005 levels, and every kernel must go into ethanol. Kiss your corn pudding goodbye.

Cultivating that much corn will require even more farmland. Securing it likely will require chopping down the same trees that inhale the carbon dioxide that humans and cars exhale. If Al Gore is telling the truth, this will increase global warming. So one of the environmentalists’ favorite tools for fighting global warming could actually exacerbate it. Meanwhile, as the Wall Street Journal editorialized on January 27, “ethanol increases the level of nitrous oxides in the atmosphere and thus causes smog.”

How lucky we are to have a government big enough to tie its own shoelaces together.

— Deroy Murdock is a New York-based columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution.
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post #2 of 36 (permalink) Old 02-07-2007, 04:24 PM
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Re: Ethanol and the law of unintended consequences

they could find substitutes however.
The world needs to continue to evolve and get away from harmful substance use such as gasoline.
Some may suffer unfortunately, but the world as a whole needs to get better.
If a small group of people such as poor mexicans are suffering, we could provide aid as well if need be, for a time period, but not permanately.
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post #3 of 36 (permalink) Old 02-07-2007, 04:27 PM Thread Starter
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Re: Ethanol and the law of unintended consequences

[quote author=kspec link=topic=68911.msg1192978#msg1192978 date=1170883460]
they could find substitutes however.
The world needs to continue to evolve and get away from harmful substance use such as gasoline.
Some may suffer unfortunately, but the world as a whole needs to get better.
If a small group of people such as poor mexicans are suffering, we could provide aid as well if need be, for a time period, but not permanately.
[/quote]

Ethanol is no less harmful than gasoline though - and in fact, takes more energy to produce than it creates, when produced from corn (sugar ethanol, which is not made in significant quantities in the US, is different).

Basically, Ethanol in the US is widely regarded as a boondoggle for the midwest.
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post #4 of 36 (permalink) Old 02-07-2007, 04:28 PM
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Re: Ethanol and the law of unintended consequences

how is it more harmful?
i dont know a whole lot about the stuff, but i know breathing in gasoline can give you cancer.
i dont think breathing in the corn ethanol will give you cancer?

And doesnt it emit less bad stuff out of the exhaust?
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post #5 of 36 (permalink) Old 02-07-2007, 04:30 PM
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Re: Ethanol and the law of unintended consequences

Meh, I tend to steer clear of editorials when it comes to getting a fair picture of things.


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post #6 of 36 (permalink) Old 02-07-2007, 04:32 PM Thread Starter
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Re: Ethanol and the law of unintended consequences

[quote author=kspec link=topic=68911.msg1192997#msg1192997 date=1170883718]
how is it more harmful?
i dont know a whole lot about the stuff, but i know breathing in gasoline can give you cancer.
i dont think breathing in the corn ethanol will give you cancer?

And doesnt it emit less bad stuff out of the exhaust?
[/quote]

Not particularly... its main "advantage" is that it isn't foreign oil. Environmentally, it's not great. And the points that guy makes in his editorial about food places are absolutely correct. This country runs on corn (not just "poor mexicans&quot... to feed our animals, to make our cereals, etc... prices will go up on many things. It's also environmentally damaging because you have to keep many more fields planted much more of the time.
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post #7 of 36 (permalink) Old 02-07-2007, 04:33 PM
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Re: Ethanol and the law of unintended consequences

[quote author=dmention7 link=topic=68911.msg1193003#msg1193003 date=1170883848]
Meh, I tend to steer clear of editorials when it comes to getting a fair picture of things.
[/quote]

+1 , they are normally liberally slanted
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post #8 of 36 (permalink) Old 02-07-2007, 04:39 PM
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Re: Ethanol and the law of unintended consequences

It would be nice if our path away from fossil fuels would coincide with an economic boom, but I think it's far more likely that we're going to face some degree of economic strain in transitioning to alternative fuels.

If cold fusion were to be invented tomorrow, there would be no shortage of people bemoaning all those lost jobs in the petroleum industry. We'd essentially be crushing the economy of several middle-easter countries. Not to mention the farmers who would be put on their asses by a lack of need for any type of biofuel.

I mean, someone's glass is always going to be half empty.


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post #9 of 36 (permalink) Old 02-07-2007, 04:44 PM Thread Starter
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Re: Ethanol and the law of unintended consequences

[quote author=maudi3 link=topic=68911.msg1193018#msg1193018 date=1170884030]
[quote author=dmention7 link=topic=68911.msg1193003#msg1193003 date=1170883848]
Meh, I tend to steer clear of editorials when it comes to getting a fair picture of things.
[/quote]

+1 , they are normally liberally slanted
[/quote]

Which has what to do wtih anything, in this ultraconservative slant, if anything?
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post #10 of 36 (permalink) Old 02-07-2007, 04:46 PM Thread Starter
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Re: Ethanol and the law of unintended consequences

[quote author=dmention7 link=topic=68911.msg1193037#msg1193037 date=1170884375]
I mean, someone's glass is always going to be half empty.
[/quote]

I agree. Here's the thing: What's the ADVANTAGE of Ethanol? The ONLY advantage right now to Ethanol is that we can use energy from nuclear power plants to make it... but we don't (Nuke's are a very minority part of our energy). There's no environmental benefit (any benefit in one category is offset by a disadvantage in another), and it's less efficient. So we're left with the fact that it isn't foreign. OK, if that matters THAT much to you, then fine.
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