Jon Sanders

If you are a politician and you favor federal support for ethanol and other biofuels, would you kindly stop telling voters you care for the poor? We all expect candidates to tell some whoppers, but even so, that one is just plain unseemly.

By all means, examine the justifications for promoting biofuels. Conventional fuels are bad for the environment and contribute to global warming; oil prices are going through the roof; and we don't want to be held hostage to an energy cartel that keeps supply down to maximize profits.

It's one thing to speak wistfully about finding a fuel that will do all those things, but it is another thing entirely to discover it. The higher oil prices spike, the more entrepreneurs and independent investors will seek solutions. Why? Because there is simply too much money to be made by the person or company that figures it out. The profit motive is good; it impels people to search for solutions. Whether that solution is finding ways to tap into an American oil deposit that's larger than ANWR, or finding the next big energy break, or pushing for more nuclear power, or some combination, it doesn't matter -- just don't let government get in their way. Government is infinitely more capable of hampering the search for solutions than it is in finding one.

The last thing we need is our tax money used to promote a governmentally approved "market fix." If government thinkers were any good at picking the Next Big Thing, they'd be out there making money doing just that. The simple fact is, they're terrible at it. Even worse, their selections have the weight of government behind them, so they don't face any market repercussions for making colossal screwups. We the people have to bear the burdens of their mistakes instead -- not just overtly, but also in ways unseen and in paths not taken, having been blocked by government.

Look what has happened in the few short years since Congress passed and President Bush signed the Energy Policy Act of 2005 with its "renewable fuel" requirements. The insulated thinkers in Foggy Bottom reached amid all this market uncertainty and hand-selected the energy alternatives to save America and the planet. And what they've accomplished is already as thorough a cock-up as possible even from that rarefied assemblage of bumblers.

Is their solution better for the environment per the standards of manmade-global-warming orthodoxy? No. The most recent studies have shown that, taking into account all the factors involved in producing biofuels, including the need for shipping and for converting land to cropland, they would increase greenhouse gas emissions substantially over the amount contributed by conventional fuels.

What of oil prices? They are still on the increase. Their rise is being eclipsed, however, by the staggering increase in the worldwide price of food. What does the price of food have to do with energy policy? Because our savants' energy is made from food, especially corn, one of the primary staples worldwide.

Corn prices are at all-time highs, having passed $6 a bushel this month after hovering mostly between $2 to $3 the last ten years. This sizeable increase is affecting all kinds of markets worldwide; increasing the prices not only of consumer items and cereals made from corn, but also of beef, chicken and dairy products (livestock that is corn fed), and substitute goods such as grains.

These rapidly increasing prices are affecting not just consumers; they are shutting down businesses and putting people out of work. Last month, for example, 830 people in Siler City, North Carolina, were put out of work when Pilgrim's Pride Corp. closed a chicken-processing plant there because of "soaring feed-ingredient costs resulting from corn-based ethanol production."

In short order, the ethanol solution has brought the phrase "food riot" to the fore, as reporters seek a way to describe events in Burkina Faso, Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Ivory Coast, Madagascar, Mauritania, Pakistan, the Philippines, and Thailand, among others.

Well, at least we won't be subject to a cartel making record profits and keeping supply down, will we? Not so hasty. Corn prices are, as mentioned above, at record high prices. Meanwhile, the U.S. Department of Agriculture is projecting that farmers will plant eight percent fewer acres of corn this year than last.

Record profits, record high prices, suppressed supply, consumers facing higher bills – and you thought oil was bad? This new behemoth is worse for the environment and worse for the poor -- rising food prices hit the poor the hardest, and even "liberals" know that; it's why they often try to exempt food from sales-tax increases.

Only a central-government policy "fix" could be this counterproductive. Everything else is subject to being laughed off by investors, consumers, and people whose fortunes depend upon finding ways to please investors and consumers. Officials insulated from this necessary corrective and equipped with the coercive power of government are doubly able to foist great boondoggles not only on their country, but sometimes even the world.

Jon Sanders

Jon Sanders is associate director of research at the John Locke Foundation in Raleigh, N.C.