One Stupid Policy, A Plethora Of Bad Effects

It’s just one in a long line (H/T: Reason):

With milk already averaging more than $3 a gallon nationally, economists say the price could rise more than 30 cents this year.

Shoppers in the region, though, can take some consolation that local milk prices in recent years have been among the lowest among cities surveyed by the U.S. Department of Agriculture – sitting more than 30 cents a gallon under the national average. Nonetheless, the local average price for both 2 percent and whole milk in March was $2.92, up 10 percent from a year ago.

Fuel costs, plus higher prices for feed corn and silage, are pushing dairy farmers’ production costs up. With more corn being used to make ethanol, the increased demand is pushing up feed prices, Smith said.

So let’s think about this. The government set a target of x percent of energy from ethanol in y number of years. Yet at the same time, they put huge unnecessary tariffs on imported sugar, ensuring that all that ethanol would have to come from American corn.

Now, in itself, that may seem like a worthwhile goal. After all, we’re trying to cut our dependence on foreign oil. Plus, if we create an artificial demand for our corn, we help our farmers by increasing prices without actually actively subsidizing them!

But let’s look at what’s happened. First, we started hurting poor Mexicans by threatening their access to affordable corn tortillas, a staple of the diet for the impoverished in that country. Then, it was found that the high cost of feed corn for animals will end up resulting in high costs and lower supply of meat. And now, it’s spreading to milk. You know, full of calcium, the stuff we tell children will give them strong bones? Great work, Congress!

So now our government is in a quandary. If they take a staple like milk, and let the price increases factor into CPI, it will start showing inflation. And they can’t allow inflation to appear, so look for milk to be unweighted slightly in the CPI (much like ground beef was substituted for steak). And if they do start accepting the price increases, they’re going to have to explain how these increases are all due to the high cost of oil and transport.

Simply put, look at how the cost of government is affecting your food. In addition to all the farm subsidies, price supports, and all the other nonsense, they decided to make a completely separate mandate regarding ethanol in the energy supply. What happens? Your cost of living goes up, and your standard of living goes down. And all this won’t really change much in the price of oil, due to the necessities of a global market.

We spent all weekend discussing the nastiness of taxes, but it’s important to remember that the costs you pay due to government don’t stop there. Can you really afford to let your government do this to you?

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