The oil problem is corn lobby

Oil hit another high today, just in time for one more 62,000 job loss report by the Labor Department. In short, we are headed into stagflation - in case you did not already know.
Reminds me more and more of the last oil crisis in the late 70s, early 80s. Then, what reversed the crisis eventually was new oil discoveries and less gas usage.
This time we will probably see the same. On the demand side, Americans are really switching into hybrids and smaller cars.
However, what could really make the difference would be a global switch to ethanol. Now is when I get lambasted, because, as the whole media has been saying, ethanol is raising food prices.
But that is not absolutely correct. If anything, the corn lobby in Washington is raising food prices.
Yes, McCain is right. And I hate to admit that the GOP candidate nailed it on something.
If you cut protection to corn ethanol you will have not only cheaper, but better and more plentiful ethanol. You might even help drive down our public deficit and increase economic growth in some African countries in the process.
Consider a few things.
Farm subsidies will cost us, taxpayers, $289bn in the next five years. That is enough to fund economic stimulus packages like the one put out this year, until 2011. In plain English, instead of helping farmers be less efficient every American taxpayer could get a $600 rebate every year for the next three years.
The Federal Government's insistence on producing ethanol at home - from corn - has clearly helped inflation go up. That, in turn, set-up a roadblock on the way of a new interest rate cut, which could help get the housing market out of limbo.
For those who may argue that corn subsidies are protecting US jobs, a couple of reminders. Farming here is highly advanced and employs very little labor. When it does, farmers prefer to hire immigrants - nothing against that -, as has been proven by their fierce defense of guest worker programs. The construction industry - which would benefit from a rate cut - is one of the most important employers in the US.
Then there is the purely technical - and environmental - side of it. When you make ethanol from sugar cane all you need is the plant itself. After the cane is milled for its juice, the pomace left is burned to generate the energy necessary for the rest of the chemical process. One of the biggest problems the US corn ethanol industry has faced is how to get the energy for that last production step. They have tried everything, from coal and gas to burning dry manure collected in cattle farms. Most are just settling with diesel - ironic, is it not?
Finally, just opening the doors in the US to imported sugar ethanol would benefit a lot of people in the developing world, namely Guatemala and the South African Development Community, two of the biggest sugar exporters. To be sure, the biggest beneficiary would be Brazil, the top exporter. But still, in the long run, it would be good for everyone.
My point is, it does not take much to reduce our dependence on fossil fuels - and stop financing rogue countries as Iran and Sudan in the process.
Automakers already have full control of the technology necessary to have cars run on both gas and ethanol - 95% of the new cars sold in Brazil can run with either fuel.
The only two things the US government would have to do would be stop supporting corn farmers and insure that every gas station in the country has an ethanol pump.