The Circle of Corn-based Ethanol.

It’s quite fun, for given values of “fun:”

• The US Government subsidizes the production of corn-based ethanol, as a substitute/supplement for gasoline.
• To maintain a demand, the US Government pushes for standard gasoline mixtures containing 10% ethanol.  This will supposedly decrease pollution and increase efficiency.
• Corn is then turned into ethanol wholesale.
• Corn-based food prices rise.  That includes critters that eat corn, by the way.
• This results in higher food prices domestically.  This decreases efficiency.
• This also results in more food insecurity globally.
• Corn-based ethanol, being subsidized, crowds out other ethanol fuels.  If this is confusing: please, reference Gresham’s Law, and generalize from its specific example.
• Ethanol, being less energy efficient than gasoline – which is why we weren’t using it to begin with – ends up causing effective inflation, as it costs more to go the same distance in your car.  This also increases pollution.
• In short, 10% ethanol gasoline results in more pollution and less efficiency.
• Therefore, the only solution… is to raise the amount of ethanol in gasoline to 15%.

You have to realize, of course, that darn few DC bureaucrats actually drive anywhere.  And the ones that do rarely pump their own gas.

Moe Lane (crosspost)