THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume XIII, Issue # 97, April 27, 2011
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
A DOUBLE WHAMMY FOR CONSUMERS
By Dennis T. Avery
THE OBAMA ADMINISTRATION & THE CURRENT STATE OF THE AMERICAN ECONOMY: RAPIDLY RISING ENERGY & FOOD
PRICES -- HIGH OIL & FOOD PRICES -- A DOUBLE WHAMMY AMERICAN CONSUMERS HAVE NOT SUFFERED SINCE PRESIDENT
JAMES EARL CARTER'S INFAMOUS "STAGFLATION," A PAINFUL MIX OF WEAK ECONOMIC GROWTH, HIGH
UNEMPLOYMENT, & RISING INFLATION IN THE LATE 1970S -- A DECLINE IN U.S. DOMESTIC PETROLEUM PRODUCTION
ENGINEERED BY PRESIDENT OBAMA -- SYMPATHY FOR RIGGING HIGHER OIL & NATURAL GAS PRICES SO THE HUGE FEDERAL
SUBSIDIES FOR WIND & SOLAR POWER PRODUCTION WILL SEEM LESS A DRAIN ON U.S. ECONOMIC GROWTH -- DIVERSION
OF HUGE AMOUNTS OF GRAIN FROM FOOD PRODUCTION TO MOTOR FUEL PRODUCTION, THEREBY CREATING AN
ARTIFICIAL FOOD SHORTAGE
FULL STORY:
U.S. energy prices have risen to more than 6 percent of consumer spending — which may be a historic “tipping point.”
Our food prices, meanwhile, have had their steepest increase in a generation, to about 6.5 percent of spending. That’s a
double whammy consumers haven’t suffered since Jimmy Carter’s infamous “stagflation,” a painful mix of weak economic
growth, high unemployment, and rising inflation in the late 1970s.
Both the high oil prices and the high food prices trace directly back to the Obama administration. Oil has gotten no
scarcer during the Obama years, but the dollar has weakened by about 17 percent. The price of oil is denominated in U.S.
dollars, so the dollar decline almost exactly matches the rise in America’s oil prices. Meanwhile, the President has
engineered a stop-stall on domestic energy production, from Alaska to the Gulf of Mexico, making even our own oil more
costly.
Some months ago, I sat at an energy roundtable with Congressman Edward Markey of Massachusetts (of Waxman-Markey
cap-and-trade fame), the President of Duke Power, and the former Director of President Clinton’s Council on Environmental
Quality. The sympathy at the table was for rigging higher natural gas prices so the huge federal subsidies for wind turbines
and solar panels would seem less a drain on our economic growth.
Recently, moreover, the Congressional Research Service reported the U.S.A. has more fossil energy than any other nation,
when we total our coal, oil, natural gas, and our new shale gas and oil reserves. Far from having “just 2 percent of the
world’s oil reserves” we have centuries worth of fossil fuels — which the Obama administration is committed to not using.
The food inflation too is now Obama’s. Under both Bush and Obama, the U.S. federal government has cheerfully diverted
huge amounts of grain to auto fuel, creating an artificial food shortage. That’s triggered food price inflation for the poorest
around the world. Corn ethanol may be “renewable,” but the subsidies make it very expensive to use.
Why not remove the federal subsidy and let ethanol compete? Mainly because ethanol isn’t competitive or effective. And
it is down right disastrous for the environment. Right now, farm woodlots are being drained in the Corn Belt, and tropical
forest is being cleared for more corn and palm oil in Southeast Asia, responding to high crop prices. This is not a
sustainable solution.
Last year, Stanford University praised Norman Borlaug’s Green Revolution for saving about 7 million square miles of
wildlife habitat from being plowed for more low-yield crops. Without the higher crop yields, we’d have gassed off soil
carbon — as nitrous oxide — equal to one-third of the world’s industrial emissions since 1850! The Stanford message is
clear: don’t clear wildlife habitat for trivial purposes. And this seems a trivial purpose — whether or not you believe in
manmade global warming. Ethanol won’t make much difference.
Why not clean-burn coal, gas, and oil to make the electricity we need and admit the “Green” solutions, so far, just don’t
work. Trillions of taxpayer dollars are poured into wind, solar, and ethanol and none has proved to be an effective means
of producing energy.
If the goal is to reduce CO2, the effort has not only failed, but the need is appearing less and less valid. Thus far, the
computer models have been wrong. The Pacific Ocean, our largest heat sink, has entered a cool phase, and the tree rings
and coral samples tell us it will probably last for the next 25 years.
LINKS TO RELATED TOPICS:
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Agriculture, the Economy, & Human Health & Welfare:
Policy Issues Relating to Food Production & Consumption
Dennis T. Avery, an environmental economist, is a senior fellow with the Hudson Institute in Washington, D.C., and the
Director of the Institute's Center for Global Food Issues . He was formerly a senior analyst for the U.S. Department of State.
He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Years. Readers may write to him at
PO Box 202, Churchville, Virginia, 2442; email to cgfi@hughes.net. Visit the Center's website at www.cgfi.org
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
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Conservative Government Ensures a Nation's Strength, Progress, & Prosperity