Well, at least the Old Testament God would have hated ethanol; the New Testament God would probably be a little more forgiving. The reason for the deliberately hyperbolic title of this article is because right now much of America is enduring the worst drought since the infamous “Dustbowl” drought of the 1930’s, and while we have yet to see the near biblical devastation of that drought, it shouldn’t minimize the negative impact this drought is having on farmers and ultimately the economy at large.
Droughts drive up food costs, which of course then have to be passed on to us, the consumer, and unless you are among the fortunate who can absorb the added expense, then the odds are that this rise in the cost of food will force you to curtail spending in other areas – that is called budgeting (Washington DC I am looking at you). Well, I am sure I am not the first person to let this cat out of the bag, but just in case there might be a few people who haven’t realized this, the economy ain’t so good right now, specifically the driving force of our economy, us the consumer.
Depending on what the source is, consumer spending makes up somewhere between 60 to 70% of our economy, and quite honestly with an economy as big as ours I think quibbling over 10% is splitting hairs. Regardless of which number you choose to be the most accurate I think you can see that with numbers over 50% like that, it is safe to assume that when the consumer sneezes the economy catches a cold. So, we have the largest driving force of our economy, the consumer, who is essentially tapped out, and a major drought destroying crops, particularly corn, which will then make all things associated with corn more expensive.
Corn is virtually everywhere, or rather it is tied to virtually everything we eat, and now thanks to government mandates it is even in our fuel tanks. It doesn’t matter if you like Coke or Pepsi, it has high fructose corn syrup in it, and so the price should probably rise. Are you a meat eater? Well, the odds are better than good that whatever your favorite meat is it was probably fed with corn, so less corn to feed your future steak means that there will be fewer steaks, which then means your future steak is going to cost more. Eggs, chicken, pork, cereal and your morning commute all are tied to corn.
Because of the government mandate that requires that all fuel be a blend of at least 10% ethanol (ostensibly to lower fuel costs and reduce our dependence on foreign oil) means that this drought will hit you both at the grocery store, and at the fuel pump. In 2007 the GAO projected that ethanol production would account for 30% of America’s corn fields by 2012. Well, they were surprising close in their estimates. Nearly 40% of all of American corn crops gets turned into ethanol, another third of the crop goes into our bellies and a paltry thirteen percent we send overseas to feed other people. That means that we would rather burn our food, than to use it as God intended. Not to mention the fact that we could literally carpet America from coast to coast with corn fields and it still wouldn’t provide enough ethanol to handle our national fuel requirements. Of course if we did do that then there wouldn’t be any roads for us to drive on, so by default it would then handle our fuel needs, but that isn’t going to happen, so it is a moot point. My point is simply that you don’t burn your food as a source of energy. Do you think that early humans saw that elk in the forest as dinner for their tribe, or just another log to throw on the fire? I believe we all know the answer to that one – well all of us but politicians; they tend to think less rationally than a normal human. Maybe that is why all of our money says “In God We Trust;” because you can’t trust a politician.
It requires a great deal of faith for a man to be cured by his own placebos. ~ John L. McClenahan