ABC Ignores How Biofuel Mandate Contributes to Inflation
The eco-love affair Washington has with biofuels is starting to take a toll on the fragile U.S. economy. It's a shame no one in the media have that connection.
"World News with Charles Gibson" explained on February 20 that biofuels are driving up food prices, which is driving up inflation. The Consumer Price Index (CPI), a key inflation reading, rose 0.4 percent in January according to the Labor Department, matching December's rise.
"Blame it on the price of wheat," said ABC correspondent Sharon Alfonsi. "Demand for alternative energy has farmers planting less wheat and more corn - the key ingredient of ethanol. Add the growing appetite for wheat from developing countries and the supply is strained.
Alfonsi added, "U.S. wheat stock piles have hit a 60-year low and wheat prices have never been higher. That means the cost of pasta has doubled and that loaf of bread - it'll cost you an extra 20 cents. Economists say it is the fastest-rising rate of food inflation in nearly 15 years."
What Alfonsi left out is the "demand for alternative energies" is an artificial demand created by government mandate. According to the February 12 USA Today, it is heavily subsidized "government-mandated biofuels" that are contributing to the higher commodity prices.
"Soaring demand, rising oil prices and government-mandated biofuel use have sent many commodity prices to their highest levels in history," Sue Kirchhoff and John Waggoner wrote in USA Today.