Friday, February 09, 2007

Good Intentions: The First Domino

From the blog of Gene Edward Veith:
Tortilla prices have doubled in Mexico, causing Mexico's legions of poor people, who depend on tortillas as a major staple of their diet, to riot, destablize the government, and, one suspects, motivating more of them to illegally immigrate to the United States. Why are tortilla prices soaring? Because of the push in the U.S. to replace gasoline with ethanol.

The demand for ethanol, subsidized by the government at the rate of some 50 cents per gallon, has sent corn prices to the moon. This pleases the farm belt, of course, but the high corn prices are not only impacting tortillas, they will soon show up in higher meat prices. The tangled web of unintended consequences. . . .
(HT: Justin Taylor)

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