I never thought of these two economists at the same time, until Hamilton called the 2005 Energy Bill "monstrous"!
As a result of ethanol subsidies and mandates, the dollar value of what we ourselves throw away in order to produce fuel in this fashion could be 50% greater than the value of the fuel itself. In other words, we could have more food for the Haitians, more fuel for us, and still have something left over for your other favorite cause, if we were simply to use our existing resources more wisely.
We have adopted this policy not because we want to drive our cars, but because our elected officials perceive a greater reward from generating a windfall for American farmers.
But the food price increases are now biting ordinary Americans as well. That could make those political calculations change, and may present be an opportunity for a nimble politician to demonstrate a bit of real leadership. I notice, for example, that although Senator Barack Obama (D-IL) was among those who voted in favor of the monstrous 2005 Energy Bill that began these mandates, Hillary Clinton (D-NY) and John McCain (R-AZ) were among the 26 senators who bravely voted against it.
With Hamilton denouncing monstrous legislation, what's next -
Austrians writing
800-page econometrics textbooks?
There is going to be inefficiency in ramping up the value of corn for fuel. Jim might suggest how a free market can ramp up a production system to accurately match the current value of fuel.
Free market or not, we are going to zig zag are way to a match of biofuel and driving.
What was Rothbard's second favorite epithet?
Hint: it begins with "e" and has four letters.
Here is a Rothbardian refutation of econometrics:
Prove the fallacy of econometrics.
1. Econometrics is mathematical history.
2. Mathematics is a priori knowledge.
Therefore, 3. Econometrics is a priori history.
4. A priori history is false.
Therefore, 5. Econometrics is a fallacy.
"Fallacy" was one of his favorite words too.
I wrote a satirical piece for The Prometheus Institute's blog on this issue a few weeks ago. I proposed that if I were a Captain Planet supervillain that I would try turning food into biofuels, because it would both harm the environment and, as an added bonus, harm the poor.
So should people who make a living from time series analysis forfeit their pay upon reading your refutation?
that's flat out wrong. Americans live for cars. Cars define the US. Taking away cars is like heart-removal surgery.
Farmers aren't necessarily benefitting. Costs to produce corna and other crops are up and the 'hot money' in the futures markets is making selling forward very risky.