Monday, April 21, 2008

Economy: Out of control?

Food prices are skyrocketing. Gasoline and Diesel fuel prices are out of sight. Is this the free market, and what it portends? Perhaps not. It all starts with the oil cartel, which if they were located in this country would be called monopolies, and outlawed. There's certainly nothing "free" about that market. In addition to the oil prices being cranked up, no new refineries have been built in this country for years.

It all starts with oil. Oil is from which most fertilizers are derived. Diesel fuel runs the tractors and combines on our farms, and the trucks and trains necessary to bring the farm products to market. Ergo, grains goes up in price, as does chicken, beef, pork and other meat products, because they are fed and finished on grain. The same for vegetables, those healthy foods that have been cheap up until now. Labor costs, fuel again, and transportation to market.

Exploration for new sources of oil here in this country have been stifled by environmentalists, who in many cases, apparently want the world returned to the state it was in before man. Timber, mining, oil exploration, heavy industry all, are or sadly were, destroyed by the use of legal tactics such as delaying such activities for years by filing lawsuits without merit. We cannot solve any problems by extremism. Many good things have happened as a result of heightened ecological awareness, but that should not be license to take over the country. Government must stop allowing these extremists to dictate how the world should work at the expense of our standard of living.

Comes the current government with the panacea. Alcohol, in place of gasoline for fueling a part of the total used in transportation. Boy, does that sound good. Alternate fuels. Touchy, feely just the perfect solution, right? Not so. The decision by our federal government to push the use of corn for alcohol production is phony and not well thought out. First, it costs more to farm the corn, than it produces in alternate energy. Secondly, by pushing corn out of the food chain and into the fuel chain, we have indeed upset the applecart.

The highly motivated but sadly uninformed policy has created a ripple effect in the food chain, causing grains of all variety to hit all time highs. Even with the knowledge that waste such as the corn husks and stalks and other waste material can also produce alcohol, but without the use of grain which then is forced out of the food chain. Results, sky high meat and produce prices.

Other events that are lurking in the near future, are the stagnating of train and truck transportation as it becomes more expensive to haul products to market than is paid to the haulers. These stalwarts of the market place cannot and will not stand still for losses. It's cheaper to park a semi truck than to work it all month and show a loss. Last week, an independent truckers strike got little attention. Wait until they shut down the entire country. Already, in third world countries, food riots are happening, exports of grains and grain products are being outlawed and civil unrest which is always around the corner, is becoming critical.

One can say, "well Europe has had these king of gas prices for years." Well that is true, however, few, if any bother to check the mileages in Europe opposed the this country. To cross Europe from Ireland to the Black Sea, is only enough mileage, (kilometers if you insist) to get you from Seattle, Washington in the northwest of the U.S, to about Chicago in the Midwest. We are a large country with many wide open spaces between the highly populated east, and the west coast.

We, as an economy, are out of control. Exacerbating the cost of oil, is the unchecked fall of the dollar, which then causes everyone, but especially retired people to devalue their pensions which in most cases are close enough to cause poverty. Top it all off by the real estate market going down and at the same time, real estate prices are still too high from the recent run-up for most people to afford. To quote an old country song,"ain't nothin' goin' right."


Suze said...

Great blog! Your refrain "ain't nothin' goin' right" is certainly correct. I live in Florida and my husband and I are eager to leave - we probably can't give our house away, let alone sell it, and we're not rich enough to afford 2 houses....we can barely get by here.

Dogwalkmusings said...

Ditto above comment. Great post! You've been on a roll!