The Unintended Consequences Of Ethanol

Yesterday's Journal had a great op-ed on the manifold problems emanating from Congress's 2007 Ethanol bill mandating widespread use of the same.

Congress and the ethanol lobby argue that if some outcome would be politically nice, it should be mandated (details to follow). Then a new round of market interventions is necessary to fix the economic harm resulting from the previous requirements, while creating more damage in the process. Ethanol is one of the most shameless energy rackets going, in a field with no shortage of competitors.

The problems associated with this bit of legislation ought to be a cautionary tale for anyone who wants to perform a little market manipulation to achieve their preferred policy goals. The best government intervention, if indeed, any is required, should be, as Dr. Pope always taught, "simple & targeted."

If you can't guarantee that the legislative process end result will be both of those things, it's best that you just leave the market to its own devices.


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The Democrat Party

When Democrats took the House and Senate in 2006, they pledged to lower gas prices/fix the economy (somehow) and bring the troops home.

Uh, failure on both counts.

The reason for the latter failure is that cooler heads in the party prevailed and they realized the folly of allying themselves with America's enemies. Thank you, Joe Lieberman. Of course, General Petraeus' resounding success in executing President Bush's The Surge kind of took the wind out of the sails of extreme left of The Democrat Party.

On the former, Democrats, allied by a few compliant Ag-state Republicans, created a ridiculous federal program designed to reduce our reliance on foreign oil. The net result, however, has been to burn food (corn) in our gas tanks which has, along with a few other contributing factors, driven up food prices. This is fine for rich, San Francisco Democrats, but kind of sucks for those living in lesser developed countries.

Let's not forget another hoped-for benefit of Congress' command and control tendencies--specifically, that burning ethanol would be better for the environment than gas. True to the law of unintended consequences, the carbon cost of putting additional ethanol in America's gas tanks exceeds the original carbon cost of burning pure, clean gasoline.

For all the climate change fetishists, this colossal disaster (maybe not for the SF dems, but certainly for the growing ranks of the world's starving) should serve as a cautionary tale: "solve" climate change at your own risk.

But that's the problem, isn't it? Those who bring this craptastic legislation into being and those who advocate for it never have to bear the burden of its failure.


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