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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Friday, February 08, 2008

The law of unintended consequences - again

"In recent weeks, environmentalist groups have begun to realize what we in our humble shop have been saying all along: Federal biofuel and ethanol mandates have potential to do far more harm than good. The initial idea made a fair amount of sense—use a portion of our abundant corn crops to produce ethanol as an alternative to oil. The renewable fuel source reduces greenhouse emissions, in addition to reducing our reliance on foreign oil. Pressured by environmental lobbyists, the federal government quickly jumped on the bandwagon, enacting a series of ethanol subsidies.

Federal meddling confused the market, especially as it became apparent that government mandates and subsidies were unpredictable and subject to change. Farm subsidies are sacred to both Republicans and Democrats, but the consequences of this “solution” are now obvious, and even some environmentalist groups have begun to complain. Rising demand for ethanol means rising demand for corn and a corresponding rise in corn prices, which then in turn affect the prices of countless other foods, both directly and indirectly. The demand for ethanol and the resulting increase in food prices have also resulted in changes in land use that are damaging the environment, undoing much of the alleged environmental benefit that ethanol was to provide in the first place. However, those benefits were greatly overrated. If America’s entire grain harvest were devoted to ethanol production, it would replace only 18 percent of our automotive demand for oil.

Environmentalists are contradicting themselves—again—providing yet another example of the fundamental uncertainty of so much environmental “science.” Perhaps most importantly, the ethanol fiasco reveals the ineptitude of centralized government when it comes to running the market. As old-fashioned as it may sound, the laws of supply and demand are enough to handle even our energy troubles, so long as the market is free from government interference. Otherwise, we are at the mercy of the law of unintended consequences."

--The Patriot Post


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