Saturday, March 24, 2007

The Worsening Corn Scam

I doubt there are a lot of readers out there who aren't familiar with the Big Government corn scam. The subsidies for corn and corn derived products like HFCS and corn based ethanol aren't news to us, but have you seen the worsening situation that is arising with the incestuous corn industry? The layers of subsidisation are growing deeper and deeper and the corn mega corps are growing wealthier than ever from sucking at the government teat. Meanwhile people in Mexico are literally having the bread taken from their mouths to fill the tax funded corporate ethanol tanks in the US.

We all know about the regular corn subsidies; frequently renewed by politicians looking for the ADM vote. That same subsidised corn is subsidised yet again when the ethanol industry gets hold of it and turns it into, that is. Then it gets heavily taxed at the pump and...well, you get the picture. We get taxed again and again. Government and big business benefit greatly and we see no real benefit. In fact, ethanol is costing us a great deal of money and is going to hit us in the pocket sooner, rather than later.

Corn which would normally find its way into the food supply chain, (as a food or as animal feed) is going to instead be diverted to the ethanol industry. This will lead to shortages in livestock feed and drive up the prices of meat. There may even be shortages of human consumable corn and grain, as farmers shift over to corn which is more suitable for ethanol production and away from table corn.

Look for the impact to spread, too, as more farmers gravitate away from traditional crops such as wheat, cotton and soybeans to get their piece of the ethanol pie. And, lest anyone thought that we would be the only people impacted by this ethanol monster we have only to look south, again. Mexico's presidente' has been forced to impose price caps on tortilla prices. The ethanol industry has managed to create inflation and government interference in the market in one fell swoop.

Ethanol is not even close to being a cure all for our petroleum woes, in fact it may be much worse for us and the economy, in the long run. It's expensive to make, to use and costs more energy to produce than it "saves" and it doesn't even perform as well as fossil fuels (so you have to buy more). Shoot, there isn't even enough land under the plow to meet the government mandated goals. The current ethanol freight train is running roughshod over other, possibly superior technologies, using tax dollars as its fuel and, if those subsidies were removed the ethanol beast would undoubtedly come to a screeching, screaming halt. It cannot survive in a free market.

Perhaps someone should have explained to Mr. Bush and his government that placing all of your eggs in a single basket is a bad idea. A potentially costly one for everyone involved. That would be us, in case you were wondering. The ethanol beast is loose and we're all going to get gored by it.

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sunni said...

Excellent post! The goring is well underway.

Vache Folle said...

I might just plant me some corn as a hedge. Cheap corn feeds the obesity epidemic, so making food more expensive may be part of the plan to trim us all down to our fighting weights.