Media Revelation: Ethanol is Causing Inflation

     Finally, the media are connecting the dots and realizing the push for alternative energy is taking a toll on the American economy.

     The Labor Department reported on February 20 that the Consumer Price Index (CPI), a key inflation reading, [1]rose 0.4 percent in January, matching December’s rise. One of the culprits behind the spike – increased food costs because corn is being used for ethanol.

     “Farmers are replacing wheat fields with corn to meet the demand for alternative fuel, but that means higher flour prices – and in one Pennsylvania pizza shop, more expensive pies,” NBC News correspondent Chris Jansing said on the February 27 “NBC Nightly News.”

     Perhaps no one drew a stronger correlation between [2]the politics of alternative energy and the rise in inflation than Jim Cramer in a February 27 interview with Democratic presidential hopeful Sen. Hillary Clinton (D-N.Y.) on his CNBC show “Mad Money.”

     “Senator, you mentioned inflation,” an animated Cramer said. “Half of inflation is coming from oil. The other half is coming from food. Do you believe that we should continue to burn food in this country? Poor people cannot afford what we’re doing with our ethanol strategy. We’re raising the price of the staples that they eat. If we scrapped ethanol, half of our inflation would go away. Why are we allowing the ethanol lobby to destroy the affordability of people who want to eat chicken and beef?”

     Clinton, [3]a self-proclaimed opponent of Washington special interest [3]s, provided more of a dodge than an explanation.

     “Well, I think it’s a little more complicated, Jim, because I think the increases in the energy prices generally have contributed to food inflation,” Clinton said. “Although, you’re absolutely right – that the rising cost of corn and soybeans, which are ubiquitous in our food supply, have certainly contributed significantly, but we’re in a transition period.”

     So what was Clinton’s solution? More nuclear power, as in France, where [4]76 percent of that country’s electricity is produced [5]without greenhouse gases? What about investing in [6]clean-coal strategies since coal is an abundant natural resource? Or perhaps opening up part of the Arctic National Wildlife Refuge (ANWR) for oil drilling, where according to an editorial [7]in the February 21 Investor’s Business Daily, our dependence on “foreign oil” in a global oil market would be solved if Democrats in Congress would stop restricting the supply?

     Of course it was none of the above. Clinton proposed less efficient solutions, including [8]two ideas popular with the green movement – solar and wind power.

     “We need an energy policy that does focus on homegrown energy, and that has to be a broad base set of energy alternatives,” Clinton said. “You know, ethanol from corn is not the most efficient way of producing it, but it is what we are doing now as we move toward cellulosic, as we look at how we’re going to incentivize wind and solar. You know, I think we should be looking more at new forms of energy for our cars.”

     Government-mandated corn-based ethanol isn’t only doing harm to the American economy on the inflation front. It’s also contributing more to carbon emissions and “global warming” than fossil fuels, [9]according to two recent studies. That’s not exactly a “green” alternative energy solution.