Inflation explained by a pork producer

Government officials are reporting mild inflation and Ben Bernake of the Federal Reserve is seemingly unconcerned about rising prices.  Meanwhile the rest of us are experiencing rapidly rising prices at the filling station (gas at the pump now well over $4.00 per gal compared to $2.00 when Obama was elected) and grocery stores.  Turns out that the government, when computing inflation, excludes energy and foodstuffs from their calculation of the rate.  They probably compute inflation this way in order to underplay the rate of increase and thereby avoid larger payouts to the recipients of  programs  indexed to the official rate of inflation, such as social security and other welfare programs.

In this WSJ opinion piece we are given a simple and clear explanation of the cause of rising food prices.  It all comes down to the rising cost of grain -- in this case, corn -- which is the staple commodity of most foodstuffs, resulting from the government policy of subsidizing farmers to produce ethanol.  BTW, ethanol has been dismissed by the EPA as a non-consequential factor in the clean air movement. Also, this ethanol subsidy policy was accompanied by a tariff to protect producers of corn from foreign competition back in the '70's.  The double whammy of a protected and subsidized market and the dedication of 40% of the corn supply to ethanol leads to higher prices for the remaining 60% of the supply.  Solution: eliminate the tariff and deep six the ethanol industry and voila, more corn availability for everything else with lower prices across the board for food.  To accomplish this requires defeating the ethanol lobby, by now well entrenched and powerful.  It is disgusting to think all the rest of us are paying for the production of a useless product that doesn't even accomplish what it is supposed to.   Both political parties are to blame for this one. One other point, if we want to see lower costs across the board simply reduce corporate income taxes which are, after all, passed through in the price of goods to the consumers.  Somehow it always comes back to lowering taxes as a way to stimulate commerce.