Posted by: James Atticus Bowden | February 16, 2011

Bad Policies and Logical Consequences

Less Supply + More Demand = Rising Prices (duh)

When you break the law of gravity, you fall.  No surprises.   When government breaks the laws of economics, prices rise.  Only surprises Liberals, journalists and pols, and other assorted Simpletons.

A national news story the other day did the “Woe is me, food prices are rising.  Who knew?”  (They left out blaming Bush).

So, the ethanol mandate uses corn for fuel.  When so many other substances do better producing energy.  There is less corn for food (lower supply) and more demand.  The price of corn rises.

So, the restrictions on drilling off shore, increasing regulations, etc. reduce the supply of domestic oil.   Demand increases – especially in India and China.   The price of oil rises.

The quantitative easing (QE), U.S. government prints money to create inflation on purpose, which automatically makes all foreign products – especially oil – more expensive.  The price of oil really rises.

So, the increase in oil prices increases the production, processing, shipping, storage and marketing price of food (and everything else).  The price of food rises.

Bush didn’t do it.  Obama did.  Rising food prices punish the poor and seniors – all folks on a fixed income.

Bad policy has logical consequences.

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Responses

  1. always nice to see that a stopped clock is right twice a day


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