Recession and the Law of Unintended Consequences
Well, the word is finally being bandied about– Recession. And everybody is pointing fingers and coming up with supposed band aids that will stop it in its tracks. The problem is that in many ways the powers that be are looking in the wrong place for both the reasons and the solutions. I’m not debating here about the boneheadedness of the financial markets and the subprime mortgage debacle, though after what we learned in the Freddie Mac and S&L problems of the late 80’s I’m shaking my head that we’re in this spot again. That definitely played a part in all this. But the problems go deeper than that. Much deeper.
We all want a greener world, and we all want to be less dependent on foreign oil, and those aren’t sentiments limited to the US. The problem is when you combine those two wishes and tie our food prices to our energy prices via biofuel production incentives and subsidies. An article in today’s NYTimes summarizes the problem pretty succinctly, though they’re far from the first to do so. The article, entitled An Oil Quandary: Costly Fuel Means Costly Calories, says this, “This is the other oil shock. From India to Indiana, shortages and soaring prices for palm oil, soybean oil and many other types of vegetable oils are the latest, most striking example of a developing global problem: costly food . . . A startling change is unfolding in the world’s food markets. Soaring fuel prices have altered the equation for growing food and transporting it across the globe. Huge demand for biofuels has created tension between using land to produce fuel and using it for food.”
Now, the Peak Oil groups have been shouting about this for some time. I’m glad they’re finally being heard. But here we are looking for ways to head off recession, and meanwhile the recently reformed Farm Bill is mandating HUGE INCREASES in ethanol and other biofuel production, which will only make this problem worse. And increases in food prices hurt those who can least afford this kind of hurt.
Also, the money that should be going into research for TRUE sustainable energy sources is instead being squandered on an industry owned by the same people who brought us Big Oil and Big Agribusiness and the accompanying problems, while trashing our economy. If you realize that the amount of acreage in food production in the US today is roughly the same as it was in the year 1900, and supporting close to TRIPLE the population, then it’s easy to see that we cannot afford to replace our oil usage with biofuels, but lobbyist money and campaign contributions are once again painting us into an ugly corner, while our tax dollars are making Big Agribusiness richer. And the caps on farm subsidies that would have stopped at least some of the madness have been stripped out of the final version of the farm bill.
It’s time we look at all the pieces of the puzzle and insert some yankee common sense into Washington. But the congresscritters hobbled the anti-corruption legislation as well.
