Friday, May 2, 2008

Starving Children

None of the answers given by the presidential candidates to the problem of high gas prices really addresses the problem. Simply put, the problem is that there's not enough supply to meet the global demand. As long as this imbalance exists, prices at the pump will continue to rise and the cost of food will rise with it, and reducing the federal tax on gas and other palliatives will only help temporarily.

Moreover, as long as corn and other grains are in demand as a source of ethanol the cost of those grains, including what is grown in poor countries, will also rise. While people starve, grain raised in their own country will be exported rather than used locally because the growers will get far more money for it if they export it than if they sell it domestically.

Unless we're prepared to see starvation on a large scale in the world's poorest countries we need to use grain for food, not fuel, and we need to increase the supply of oil and gasoline. No medium term solution that omits these will avoid the looming disaster.

RLC