Thursday, August 16, 2012

Sweet Fancy Ethanol!

Our good friends on the left side seem to worry about corporations buying the election, with money from their treasuries.  Fair enough, that would be a problem.  But isn't it also a problem that our President is buying the election, with money from the US treasury?

I assumed that this was a hoax, when I first read it.  Prez O has decided that farm prices are "too low" (compared to what?  Is it really bad for poor Americans if food prices fall?  WTF?)

(more below the fold)

So he has ordered the purchase of 10% of US food output.

What does he say is the reason? 

"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."

I'm sorry; what?  Standing in front of a drought-stricken CORNFIELD?  The drought, combined with our idiot restrictions and requirements for ethanol, has caused corn prices to go through the roof.  Ranchers are being forced to kill off their herds, and so in the very short term meat prices will plunge.  But those prices will soon go through the roof.  So this whole problem is caused in large measure by the fact that we force oil companies to buy gigantic quantities of corn to use in gasoline.  There's actually plenty of corn, except for ethanol cluster f**k.

But okay, let's take this on the merits.  "It makes sense for farmers who get to sell more of their products"?  So, if you produce too much, taxpayers have to buy it?  This is just a bribe, Obama paying ranchers for their votes.

It's at that point that we go through the looking glass, though.  At least paying off the ranchers is old-fashioned vote buying.  It's corrupt, but Lord knows the Repubs do it, too.  So, if you vote Dem or Repub, you must approve of that sort of thing.  I don't, but you do.

No, it's the last sentence that has me scratching my head.  " makes sense for taxpayers who will save money because we're getting food we would have bought anyway at a better price."

Our government is going to buy this stuff up, and give it away.  Most of it will rot, or be unusable.  This last thing may be the most brazen falsehood uttered by a politician since pretty much every day during the Bush administration.

With a nod to Pelsmin.  Because he didn't know the answer, either.


John D. said...

It's all good, as long as I get my government cheese.

LoneSnark said...

This will make everything worse. The only thing stopping more ranchers from killing off more of their herds now is the low price they'd get for the meat. Raise that price, as the government is planning to do, and even more animals will be slaughtered to escape the current high corn prices. This will make the future meat shortage and thus price spike even worse.

Consumers will therefore face even higher future meat prices and won't even get to enjoy low meat prices today.

So, get this, who benefits from this policy? Why, the Ethanol producers of course, which get to enjoy current and future lower corn prices because more animals have been slaughtered than there otherwise would have been.

Simon Spero said...

" makes sense for taxpayers who will save money because we're getting food we would have bought anyway at a better price."

This statement is vacuously true, because there are no taxpayers who will save money for the stated reason.

Yes, this is a rather charitable reading, but surely any interpretation that asserts that any aspect of agriculture policy is beneficial to taxpayers as a whole could not possibly be intended.

Talking about making sense in a drought, did you know that it takes about 4-5 gallons of water to produce 1 gallon of ethanol. It's not perfect sense, since most corn isn't irrigated, but that's a sign of a missing subsidy.

Dave said...

A friend of mine just moved to Iowa. Corn yield is way down, yet the farmers he's talked to say it won't hurt their bottom line due to subsidies and farm insurance (which is probably also subsidized by the gubmint). I'm not sure if the farmers were including the latest program in their assessment of how they would fare with the poor framing conditions.

kebko said...

You're right about the insurance.
And, my understanding from family in the midwest is that most farmers are insured, so a lot of them aren't really hurting. Of course, the livestock owners would still be selling due to a lack of feed.