What Happens When Congress Pretends It's Smarter Than Markets?

This:















But it actually gets way worse than higher food prices. Thanks to Congress last year essentially commanding American farmers to scrap whatever they were doing to instead focus on producing as much corn as they can possibly manage -- you know, for ethanol, that magical alcohol that'll soon replace gasoline -- prices have also been pushed higher for gasoline, beer, farmland, and anything else even loosely related to corn.

Already, state and federal subsidies for ethanol -- pushed by greens hoping to diminish reliance on fossil fuels -- approach $6 billion per year. Couple this with a 54-cent per gallon import tariff, and farmers would be insane not to cash in. So while the size of American farmlands are retreating, the percentage dedicated to corn is growing. This led to American farmers producing more corn last year than any year during the last half century. Non-corn farm good are consequently growing more costly. Not that corn's getting any cheaper: its price grew 80 percent in 2006 alone.

All of this is owed to the artificial demand created by the economic wizards populating Congress. Perhaps people should start sending them their grocery bills as a sign of thanks.

If Only You Could Drink Ethanol

Tomorrow, or tonight, as the case may be, when you head out boozing and notice the price of beer has crept north since the last time you got housed in honor of America, thank politicians, and their myopic approach to energy. From USA Today:

Americans hosting Fourth of July barbecues will pay more cold cash for the cold ones this year as beer joins the list of foods and beverages whose prices are jumping, in part because of the booming ethanol market.

Retail prices for beer at supermarkets and other stores were up 3% in May from a year earlier, the biggest increase in 2½ years, according to the latest data from the Labor Department. That's higher than the inflation rate for the overall economy, and a bigger gain than in prices of liquor and wine bought to be consumed at home.

Those going out will also pay more for beer. Prices for beer poured away from home were up 3.8% in May from a year earlier.

The Wall Street Journal has much more on this.