no third solution

Blogging about liberty, anarchy, economics and politics

Category Archives: Seen and Unseen

Why Greenies Should Hate Ethanol

July 31st, 2007

For starters, it’s bad for the environment:

…In the long term, the Amazon Rainforest, for example, will experience vast deforestation due to Brazil’s increased sugarcane production in order to meet its ethanol export goals. This inevitably will result in the slow degradation of one of the Americas most precious and fragile ecosystems…

And it is disastrous to the world’s poor and underprivileged, who can no longer afford corn, a staple item particularly in Latin/South America. But its consequences aren’t limited to brown, foreign people. My brother, who gave me the above link, informs me that at Wal-Mart this week, the cheapest milk he saw was $3.78/gallon, which is now a full dollar a gallon more than I paid for regular unleaded gasoline, yesterday. But, what can I say about $4/gallon milk? It’s not a surprise.

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Previous posts on energy independence, here and here.

The Road to Poverty is Paved With Unintended Consequences

June 26th, 2007

And slogans like, “Energy Independence.” I’m pretty sure I hit on this a few months ago – but I’ve been unable to find a reference. Anyways, even if I did: I’m not an oracle; but if you make predictions based on the laws of economics, you’re not usually wrong.

And the laws of economics state that when the demand for a good increases, the prices of all goods derived therefrom, will also rise. When automobiles became popular, the demand for fuel oil increased. The price of heating oil went up. Sure, that happened a long, long time ago. Things have changed, haven’t they?

In a word: No. Some think that we’ll be paying upwards of $4/gallon. For milk by the end of the summer – because of an increase in the price of corn – because of an increase in the price of petroleum.

“When you have high petroleum costs, you have high fertilizer costs, but the more predominant factor has been the run-up in the cost of corn,” he said. “That is due almost exclusively by the competition of the ethanol industry with livestock producers for a finite amount of corn.”

The kicker is that Ethanol is heavily subsidized:

Ethanol already has a 51 cents-per-gallon federal subsidy, so corn producers in Michigan and across the country are clamoring to get into the game.

The price of ethanol is upper-bound by the price of near-substitutes, like gasoline. The only reason corn is as expensive as it is, is because of the artificially induced demand for ethanol, a price that is propped up with money confiscated from you and me, in the name of energy independence. Which means that you’re being taxed in order to keep ethanol profitable to produce. Unfortunately, a necessary consequence of this policy is that the taxes you already pay are causing an increase in the price of other goods you need to buy.

What’s the point of having cheaper gasoline, if the price of everything else goes up?

Jobs Americans Won’t Do

June 8th, 2007

Go ahead and add picking asparagus to the list.

For some, it’s the fourth straight season of labor shortages and, growers say, a crisis for the state’s second largest industry (auto manufacturing is the largest)….As the first crop that needs picking, asparagus is a bellwether. If labor is lacking, it likely will be short for every other crop through October. Too few pickers will mean farmers must transfer workers who would otherwise be planting and fertilizing, or let the harvest rot.

These jobs pay $10-14 an hour – which is more money than I ever made until I graduated college. But, it’s an awful job: long and uncertain hours. Teenagers don’t want the jobs, people on UI won’t take them because UI generally pays almost that much, for doing nothing at all. So who does the jobs that nobody wants?

Nobody. The farmers are forced to plow under the crops. Don’t complain about the poor or the unemployed, when jobs are left on the table, and don’t bring up the needy or the hungry, when government policy forces people to destroy food. And if you have a single shred of human decency, and you’re honestly concerned about the plight of those worse-off, you’d show some compassion for the people who live on two cups of dirt a day, tilling soil with grandpa’s femur – when they want to come here and provide you with affordable food.

no third solution

Blogging about liberty, anarchy, economics and politics