Opposition in All Things

“Little over a year ago, ethanol was winning the hearts and wallets of both Main Street and Wall Street, with promises of greater U.S. energy independence, fewer greenhouse gases and help for the farm economy. Today, the corn-based biofuel is under siege.

“In the span of one growing season, ethanol has gone from panacea to pariah in the eyes of some. The critics, which include industries hurt when the price of corn rises, blame ethanol for pushing up food prices, question its environmental bona fides and dispute how much it really helps reduce the need for oil.

“A recent study by the Organization for Economic Cooperation and Development concluded that biofuels 'offer a cure [for oil dependence] that is worse than the disease.' A National Academy of Sciences study said corn-based ethanol could strain water supplies. The American Lung Association expressed concern about a form of air pollution from burning ethanol in gasoline. Political cartoonists have taken to skewering the fuel for raising the price of food to the world's poor.

“Last month, an outside expert advising the United Nations on the ‘right to food’ labeled the use of food crops to make biofuels ‘a crime against humanity,’ although the U.N. Food and Agriculture Organization later disowned the remark as ‘regrettable’ …

“Now the fuel's lobby is pleading with Congress to drastically boost the amount of ethanol that oil refiners must blend into gasoline. But formidable opponents such as the livestock, packaged-food and oil industries also have lawmakers' ears. What once looked like a slam-dunk could now languish in pending energy legislation that might not pass for weeks, if ever.

“Ethanol's problems have much to do with its past success. As profits and production soared in 2005 and 2006, so did the price of corn, gradually angering livestock farmers who need it for feed. They allied with food companies also stung by higher grain prices, and with oil companies that have long loathed subsidies for ethanol production.”

(“Ethanol Craze Cools As Doubts Multiply; Claims for Environment, Energy Use Draw Fire; Fighting on the Farm.” Lauren Etter. Wall Street Journal: November 28, 2007. pg. A.1)

TREND OR BLIP? The push and pull of competitive forces in a free marketplace cause considerable dislocations as resources naturally would move toward their highest and best use. Yet what of resources for which multiple markets exist? What of resources for which externalities counter natural market forces?

FOLLOW THE MONEY, yes; and follow too the politics of power.

DISCERNMENT of new trends versus blips along the way may rest upon our ability and willingness to use paradoxical logic along with foundational truths.