It’s true that for most food products, the price paid to farmers to produce the basic ingredient (such as the grain in beer) is a pretty small fraction of the cost to the consumer. (That reflects the real costs of producing and distributing food products — not some sort of “conspiracy” by “middlemen.”) Even if corn-based ethanol and soy-based diesel weren’t being promoted with government subsidies, the decreasing supply/increasing cost of oil would be increasing the market demand for these grains and driving up their price somewhat.

It is likely that subsidizing certain politically-favored alternative fuels prevents market mechanisms from identifying and supplying other alternative fuels (and more energy-efficient vehicles and buildings) that would truly be more economical. But it is certain that the subsidies being doled out to producers of ethanol and soy diesel are no “free lunch” for consumers, because they end up having to pay higher taxes, in their role as taxpayers, to pay for the subsidies.

While the alternative strategy of taxing oil (or net carbon emissions) would superficially appear to cost consumers more, in reality, the increased revenues to government would allow people to be compensated by reduced taxes. In particular, the people who acted in accord with the national interest and substantially reduced their consumption of petroleum products would be financially rewarded. Those refusing to reduce their consumption would be free to continue business as usual, but would pay more for the privilege.

Someone who understands basic economics posting to a web site? Ted44 clearly doesn’t understand he is supposed to talk about big government/corporation conspiracy and global warming as the reason for all things bad. A reasonable way to use taxes to change behavior without increasing government control of anything is just not talked about.