Media Revelation: Ethanol is Causing Inflation
Finally, the media are connecting the dots and realizing the push for alternative energy is taking a toll on the American economy.
The Labor Department reported on February 20 that the Consumer Price Index (CPI), a key inflation reading, rose 0.4 percent in January, matching Decemberâs rise. One of the culprits behind the spike â increased food costs because corn is being used for ethanol.
âFarmers are replacing wheat fields with corn to meet the demand for alternative fuel, but that means higher flour prices â and in one Pennsylvania pizza shop, more expensive pies,â NBC News correspondent Chris Jansing said on the February 27 âNBC Nightly News.â
Perhaps no one drew a stronger correlation between the politics of alternative energy and the rise in inflation than Jim Cramer in a February 27 interview with Democratic presidential hopeful Sen. Hillary Clinton (D-N.Y.) on his CNBC show âMad Money.â
âSenator, you mentioned inflation,â an animated Cramer said. âHalf of inflation is coming from oil. The other half is coming from food. Do you believe that we should continue to burn food in this country? Poor people cannot afford what weâre doing with our ethanol strategy. Weâre raising the price of the staples that they eat. If we scrapped ethanol, half of our inflation would go away. Why are we allowing the ethanol lobby to destroy the affordability of people who want to eat chicken and beef?â
âWell, I think itâs a little more complicated, Jim, because I think the increases in the energy prices generally have contributed to food inflation,â Clinton said. âAlthough, youâre absolutely right â that the rising cost of corn and soybeans, which are ubiquitous in our food supply, have certainly contributed significantly, but weâre in a transition period.â
So what was
âWe need an energy policy that does focus on homegrown energy, and that has to be a broad base set of energy alternatives,â
Government-mandated corn-based ethanol isnât only doing harm to the American economy on the inflation front. Itâs also contributing more to carbon emissions and âglobal warmingâ than fossil fuels, according to two recent studies. Thatâs not exactly a âgreenâ alternative energy solution.