Decoding the Ethanol Scam and CBO Coverup

Image by Mike Licht, NotionsCapital.com via Flickr

This op-ed reads like an example in "How to Lie with Statistics," one of the key intellectual self-defense tools ever created for living in the modern world. The author (a former corn-state congressman) spins the data to fool the gullible into thinking that our ethanol mania isn't killing us on our food bills. But a good analyst puts the brake on Big Ag's spin machine. See below (from an email exchange):

Yep, its responsible for a fifth of our high food inflation rate. That percentage translates to roughly [$]9 billion in higher food costs for all Americans. That is well over twice the money spent on ethanol blending subsidies (45 cents for every gallon of ethanol) and about the same as the cost to consumers ([$]9 billion) due to ethanol's lower gas mileage. Together, those costs are about [$]22 billion. The CBO is downplaying the fact that it is costing us [$]9 billion by expressing it as a percentage of a confusing percentage.

It is a reality that ethanol has had an impact on American food prices, exactly how much is debateable, but that impact pales in comparison to the impact in third world countries that rely on our corn exports where people survive on ground corn. Average monthly corn prices remain about 100% higher than historic averages (almost $4.00 a bushel versus $2.00). Those high corn prices have driven some poultry producers into bankruptcy.

Update: Excellent dissection of a cellulosic ethanol scam that snagged one of the country's biggest ethanomaniacs here.