As we observe the efforts of the left to drive up the cost of food, there is no wonder why so many people are having trouble feeding their families. Their policies mandating the use of corn as fuel, as well as the inflationary aspects of the Fed's recent QE2 policies, have kept the cost of food high for a long time. Now, Obama's EPA is working on a proposal to increase the percentage of ethanol in gasoline from 10% to 15%. What about its effect on food prices? Let them use food stamps, says Obama's government.
It's ironic that the government plans to augment ethanol mandates even as poor and developing countries are facing skyrocketing food prices. There is no doubt that ethanol is one of the culprits behind the economic upheaval that led to the political turmoil in Egypt. Egypt has to import most of their wheat, and with grain-based commodities rising as a result of increased ethanol production, Egyptians simply cannot afford a loaf of bread. Almost 40% of corn produced in the U.S. is used for this substandard fuel, yet it is still not enough of a poverty enhancer for the left. Yes, the very same left that purports to care about the impoverished and the third world.
In addition to its disastrous effects on the food supply, this decision could turn out to be dangerous for motorists. Higher bio-fuel blends have already been tested and have shown a propensity to melt the gas pumps and storage tanks! Furthermore, even the EPA has come out with a long report detailing the negative environmental effects that ethanol production has on the water and soil. So, we have a situation in which mandates, tariffs, and tax credits enrich the government/corporate complex, while driving up the cost of fuel and food on the poor and actually harming the environment. Who are the ones to care for the poor and the environment again?
Meanwhile, potential presidential candidate Newt Gingrich gave a speech defending ethanol in...Iowa! (The WSJ has a great write-up on Newt's corn boondoggle here.) He can join Senator John Thune as a presidential candidate who is willing to peddle corporate cronyism in order to win Iowa.