Unexpected market forces...Why the wieners that run this country need to have a real job before running for election.
You put the subsidy for ethanol in place and it creates a demand based on the subsidy. An whole economy starts up based on the subsidy. You cut suddenly the subsidy and that economy crashes.
So...
I listen to the senator or congressman or whatever going on about how high feed prices are hurting the chicken industry in his state. (translation: certain mega-chicken-farmers are upset). He says the price of corn is too high and it has made other feed prices skyrocket.
That is true.
So... You cut the subsidy and crash the market.
The feed mills are all ready full of high priced grain, the contracts are signed, the grain is planted. The honest people and the small people are going to go broke. It will hit hard next year and by then no one will see the connection.
Consolidation of the market is a good thing, right?
Now wheat prices are falling as harvest nears. Uncontracted grains (like my barley) will crash.
But, fertilizer and fuel will stay high.
You can bet on the fuel staying high. That is the point. Those guys are committed to over $4 per gallon gasoline and once you get an idea in their heads, you sure can't change it-unless the wind blows a big pile of cash their way or they smell re-election possibilities.
We all knew it was a bad idea to begin with but suddenly pulling the rug out is not the way to go either. Not being an idiot would be a good start, but I suppose that is too much to ask...
Have a nice day! I'm going to go burn some $4 diesel.
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One of this country's strategic reserves that gets no press...what are we going to do when there are no more small farmers to go broke?
ReplyDeleteWell that's simple, collieguy, they'll pass a law making it illegal for anyone earning less than ten million a year to file for bankruptcy! (Unless, of course they're female or non-white.)
ReplyDeleteIt is not that I am especially in favor of the ethanol subsidy. I just hate to see the markets built up and then knocked down. I'm not sure the subsidy matters when fuel prices are already high and I suppose what they are telling us is that fuel prices will stay high from now on.
ReplyDeleteCollieguy and Gorges, I don't think the clever folks see traditional small farmers as a resource. They like the new small farmers with the "sustainable" label, sort of in the same way they like wineries. They are kind of hip.
But what do I know?
The problem with the little guy, small farmers and businessmen is the just mind their business producing things and don't ask for help from anybody, but they are likely to vote for the wrong man and if oppressed too much are liable to take their muskets and stand at Lexington or Manassas. Big corporations, filthy rich financiers and lots of people on the dole fit the big government model a lot better.
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