Saturday, April 26, 2008

Kay Bailey Hutchison, Undoing America's Ethanol Mistake, One Decade At A Time

You can't imagine my joy at seeing Texas Senator Kay Bailey Hutchison leading off an Investor's Business Daily editorial with a quotation from the great Milton Friedman.

Undoing America's Ethanol Mistake
By SEN. KAY BAILEY HUTCHISON Posted Friday, April 25, 2008 4:20 PM PT

The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results."

So far, so good. That's what is so irritating about campaign ads claiming that "My opponent voted against helping starving gay orphans in Darfur." Chances are that the policy or program in question would've done nothing for the starving gay orphans in Darfur except create more of them.

When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment.

No, we're already going off the rails in this editorial. Congress intended to take care of corn farmers in Iowa, where the first Presidential primaries are held. Then they intended to take care of other giant agribusinesses scattered throughout a lot of congressional districts. All other considerations were secondary.

But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment.

In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable.

Yep. It's like what would happen if the Government paid lots of money for people to kill weiner dogs. The supply of weiner dogs would go down, but the value of weiner dogs, as they become scarce, would go up. Weiner dogs would have to be brought in from elsewhere. Especially if the Government insisted on paying people to kill weiner dogs long after the supply had diminished.
We would be creating a supply of weiner dogs to support the weinerdog killing industry.
If you think this is the dumbest analogy you've ever heard, you're probably correct. I just happen to be looking at three weiner dogs diggin up my back yard....

Wait a minute.... read this Time magazine article about Iowa becoming a net IMPORTER of corn to convert into ethanol. IOWA no longer has enough corn to make ethanol, so they're bringing in corn from other places.
My weiner dog analogy is dead-on, and borderline brilliant.

At a time when the U.S. economy is facing recession, Congress needs to reform its "food-to-fuel" policies and look at alternatives to strengthen energy security.

Good. How about letting us build some nuclear power plants?

On Dec. 19, 2007, President Bush signed into law the Energy Independence and Security Act. This legislation had several positive features, including higher fuel standards for cars and greater investment in renewable energies such as solar power.

Good. But the legislation exempted certain trophy vehicles like Hummers and other Neo-Fascist Military Limousines. Your legislation only applies to the little people. But solar power is good. How about some nuclear power plants?

However, the bill required a huge spike in the biofuel production requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.

This was a well-intentioned measure, but it was also impractical. Nearly all our domestic corn and grain supply is needed to meet this mandate, robbing the world of one of its most important sources of food.

So what results were we expecting ? ? ? Did anyone think that food prices would remain stable? ? ?

We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.

Unless we end the mandates and the subsidies. Senator, you know, you could simply end the mandates, quotas, and subsidies. Let the market determine the price for all of this stuff, and the Invisible Hand will take care of the rest far better than you and Trent Lott and Nancy Pelosi could dream of doing.

Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.

Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.

If Ashley and Jason use all the corn to drive the Volvo to Whole Foods to buy groceries for Dylan and Joplin, that doesn't leave much corn for the hog farmer, does it?

Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.

While the blame for higher costs shouldn't rest exclusively with biofuels — drought and rising oil costs are contributing factors — the expansion of biofuels has been a major source of the problem.

Wow. Someone has beaten her about the head and shoulders with a Clue Stick.

The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.

I did a little reading on The International Food Policy Research Institute. They seem to be a pretty decent left-wing organization. But they see policies and programs as the solution, not the leading cause of the problem. Therefore, if they're going out on a limb and suggesting that biofuel mandates are responsible for one-third of the problem, you can safely double that number.

For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.

The fact that America's energy policies are creating global instability should concern the leaders of both political parties.

Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.

OMG, Senator Kay Bailey Hutchison is now calling them "progressives" ! ! ! What are they "progressing" toward, starvation and riots? A proper phrasing of that sentence would be "Restraining the dangerous effects of blah blah blah Getting out of the price-fixing business should be an issue that unites both conservatives and progressives that causes both Republicans and Democrats to look at the Free Market Libertarian concept of leaving things alone."

As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation.

In the Amazon basin, huge swaths of forest are being cleared to meet the growing hunger for biofuels.

Kind of like weiner dog breeding farms would spring up if the Government paid people to kill them. Got to meet that quota.

In addition, relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for the 800 million people who lack food security.

The recent food crisis does not mean we should entirely abandon biofuels.

The best way to lower energy prices, and reduce our dependence on foreign oil, is to accelerate production of all forms of domestic energy.

But we're going to get rid of the quotas and subsidies, right? There's no way an intelligent human could write this article and NOT advocate ending the quotas and subsidies. We're causing chaos and upheaval all over the world with this insane mess. Please, please, please, tell me you advocate making this all stop. Please, Senator, please....

Expanding biofuels while refusing to take other measures, such as lifting the ban on oil and natural gas production in Alaska and the Outer Continental Shelf, is counterproductive. We should be tapping into a broad portfolio of energy options, including clean coal, nuclear power and wave energy.

O yes, yes, yes. So we're going to go drill in Alaska, AND the mandates and subsidies are going to end? You now understand that we're digging a hole that's getting deeper and deeper, and we're not going to pay people to shovel any longer???

The key is increasing energy supply. By taking these measures, we can enable biofuels to be part of the energy solution, instead of contributing to the energy problem.

Good, good, good. Our Senator sees where the problem lies. Subsidies of biofuels are the energy problem. If someone wants to grow corn and biofuel manufacturers pay more for it than anyone else, great. But no more quotas, mandates, or subsidies. People are gonna start dying at an even greater rate if that stupidity continues.

Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.


Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.

Wait a freakin' minute. You call that "taking action"? Leaving an acknowledged financial, ethical, environmental and moral disaster like the one you just outlined in place? That's "taking action"? Let's look at that amazing sentence one more time.

Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.

Good Lord have mercy, she really said it.

This is a common-sense measure that will reduce pressure on global food prices and restore balance to America's energy policy.

I've seen more common sense in the "Dumb and Dumber" movies.

As the Senate debates this issue, we must remain focused on the facts.

Yeah, the fact that you people have wealthy contributors who want the current system to remain intact.

At one point, expanding biofuels made sense for America's energy security. But the recent surge in food prices has forced us to adapt. The global demand for energy and food is expected to rise about 50% in the next 20 years, and the U.S. is well-positioned to be a leader in both areas.

That will require a careful, finely tuned approach to America's farm products.

Senator, you people couldn't carefully fine-tune a banjo, much less something as delicate as food production and pricing. No one can fine-tune something like this. You should leave it to the Market.

By freezing the biofuel mandate at current levels, we will go a long way to achieving that goal.

So we're going to leave everything at "Bad", instead of putting out a decree moving us to "Worse". And we call that an improvement.
There are days when I just don't think I can stand it.

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