Cost of living while subsidizing the rich

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From The Washington Examiner:
Examiner Editorial: To protect ethanol, Obama seeks to inflate meat prices
Campaigning in Missouri Valley, Iowa, yesterday, President Obama announced yet another government spending program -- this time designed to inflate meat prices in Midwest swing states. "Today the Department of Agriculture announced that it will buy up to $100 million worth of pork products, $50 million worth of chicken, and $20 million worth of lamb and farm-raised catfish," Obama explained to reporters in front of a drought-stricken cornfield.

"Prices are low, farmers and ranchers need help, so it makes sense," Obama explained. "It makes sense for farmers who get to sell more of their product, and it makes sense for taxpayers who will save money because we're getting food we would have bought anyway at a better price."

None of this makes sense. In fact, Obama's move only harms American consumers while protecting a corrupt federal program.

A drought is currently driving down corn production. The shortage of feed is forcing livestock producers to slaughter animals early, putting downward pressure on meat prices in the short run and guaranteeing shortages and higher prices next year. But nature is not the biggest factor in this crisis -- the government is. Specifically, the federal government's ethanol mandate, which requires that 13.2 billion gallons of corn-based ethanol be produced in 2012.

Thanks to the ethanol mandate, more than 40 percent of the nation's corn crop now goes into the production of a useless fuel that hardly anyone would buy if the government didn't require it. That's up from just 17 percent in 2005, before the mandate went into effect. Only 36 percent of the corn crop now goes for feed, and 24 percent goes for food.

Obama could solve this problem instantly by suspending the federal ethanol mandate -- something his EPA actually can do unilaterally and legally. Instead, Obama will buy up meat -- a move that meat producers say won't help them much anyway. "It doesn't solve the problem of having enough affordable corn next summer," industry analyst Steve Meyer told Reuters. "Without changing the ethanol program, nothing can be done," he said.
And we are seeing the results right now -- from CNS News:
Price of Ground Beef Hits Record High
The average price of ground beef hit a record high in the United States in July, according to data released Wednesday by the Bureau of Labor Statistics.

The BLS has been tracking the average price of a pound of 100% ground beef since 1984. In July, it cost $3.085, up from $3.007 in June.

Prior to June, the average cost of 100% ground beef in the United States had never topped $3.00.
And this price increase is not tied to inflation -- the article mentions that ground beef would be $2.52/pound if it was just inflation controlling the price. Obama is going to find out what Jimmy Carter did with gasoline -- if you fuck with the laws of supply and demand, the results will always come back and bite you on the ass. Are we going to have ground beef lines in the future?

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This page contains a single entry by DaveH published on August 15, 2012 12:04 PM.

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