It’s All About Unintended Consequences


There are unintentional consequences to every governmental action and reaction.  Some are good, most are bad and terribly ugly.  While highlighting a few, The Pink Flamingo is featuring the ethanol battle, Fructose, and the sugar subsidies.

Is it possible the reason there is so much flooding in the mid-west this year is because of the unintended consequences of the Corps of Engineers building a series of dams, years ago, to control flooding – even though they were told the opposite would happen?

Is that massive banking reform bill passed by the Dems one of the reasons we are in such a dramatic recession?

In Arizona and now here in New Mexico, we are literally paying for the consequences of liberal hand-wringing and let the forest be the forest.  Only by timber management can fires like this be prevented.

“…“It’s way too late to be thinking on a scale of 10,000 acres,” said Wally Covington, executive director of Northern Arizona University’s Ecological Restoration Institute. “We have to think and act on a scale of a million or more acres.”

Crippling drought and warmer temperatures over the past decade have heightened the potential for big forest fires. Insects killed millions of trees weakened by a lack of rain and snow, leaving behind brittle husks with less moisture than kiln-dried lumber.

But what feeds the monster fires are the trees themselves. There are simply too many crowded too close together, a situation that scientists say was created in large part by a series of land-management decisions dating to the 1880s.

Livestock grazing stripped the forest floors of native grasses that helped maintain natural fire and slowed the proliferation of too many young trees. Loggers removed older trees critical for forest health, and scientists say the holes filled in too fast with young trees when lawsuits shut down the timber industry. Fire-suppression policies allowed the forests to grow even denser.

In the old forests, fires burned low to the ground and swept the landscape of tall grasses, tree saplings and other forest debris, rejuvenating the landscape. In the dense, overgrown forests, fires explode into the crowns of tall pines, spreading quickly and killing the trees.

“We’ve crossed the threshold,” Covington said. “We’re going to be seeing these fires every other year of 100,000 acres plus. And we can only do that for so long.”…”

Coal power plants are evil and must be destroyed.  Ergo – our power bills are going to skyrocket.

“…The news comes as consumer advocacy groups are fighting a parade of utility rate hikes, along with legislation that could add an extra 2.5 percent to ComEd bills each year for at least the next three years. ComEd customers paid 30 percent more for their electricity in 2009 than 10 years earlier. ComEd, a unit of Chicago-based Exelon Corp., serves 3.8 million customers across northern Illinois, or 70 percent of the state’s population.

While coal plant operators have years to plan for new regulations, the first glimpse into future pricing came May 13. That’s when the PJM Interconnection, a regional transmission system that oversees the electric grid for 54 million customers in 13 states, including the ComEd region of Illinois, held its annual auction for future power needs. The auction locks in supplies of electricity three years in advance to prevent massive power outages.

PJM chooses the lowest-cost blend of power that can meet demand expected during peak hours — the hottest days of the year when air conditioners are blasting.

In return for that commitment, utilities pay auction winners a “capacity payment,” which is determined based on the cost of the supply mix. Consumers pay these costs on electricity bills as part of an “electricity supply charge” that makes up about two-thirds of the bill. The payments are in addition to what generators receive for the energy they sell…”

There are numerous unintended consequences of the Obama Administrations refusal to do anything rational with our dying space program.

NY Daily News

“…Loss of control of the space station would mean a catastrophic reentry into the Earth’s atmosphere of the massive structure – the largest object ever placed in orbit around the Earth, measuring over three football fields long and weighing more than 400 tons.

The tons of falling debris that would survive reentry would pose an unprecedented threat to populated areas around the world.

Such an international catastrophe would have significant ramifications for foreign relations and liability for the United States, Russia and the other countries who participate as partners on the space station.

To be sure, the space station has numerous, triple-redundant life support and control systems that makes such a total technical failure unlikely. However, to say that it is so redundant that it could never happen ignores the tragic lessons learned due to the overconfidence in fail-safe technology in disasters throughout history, from the sinking of the Titanic to the nuclear reactor crisis in Japan….”

In the beginning there were sugar subsidies.

“…A complex system of federal loans, price guarantees and import barriers makes growing sugar a sweet business in the U.S. But it is the consumers who end up paying the difference, often twice the world market price for sugar. Moreover, because of the high price of sugar in America, food-processing-related jobs are increasingly being driven offshore. By one estimate, American consumers pay more than $1 billion a year because of sugar’s sweet deal with the feds.  Regarding his earlier efforts, Lugar told the National Review: “Those bills could have saved taxpayers tens of billions of dollars, but usually I found myself nearly alone when push came to shove on voting in favor of reform.”…”

Now comes a domino effect of unintended consequences of the sugar subsidies.

“…The law of unintended consequences is an adage or idiomatic warning that an intervention in a complex system always creates unanticipated and often undesirable outcomes. Akin to Murphy’s law, it is commonly used as a wry or humorous warning against the hubristic belief that humans can fully control the world around them. Many fields of study in the sciences and humanities embrace this concept, including economics, history, philosophy, political science, and sociology….”

There are unintended consequences that go with just about everything we do in life.  It is about the Chaos Theory and the Butterfly Effect.

“...Chaos theory is a field of study in mathematics, with applications in several disciplines including physics, economics, biology, and philosophy. Chaos theory studies the behavior of dynamical systems that are highly sensitive to initial conditions; an effect which is popularly referred to as the butterfly effect. Small differences in initial conditions (such as those due to rounding errors in numerical computation) yield widely diverging outcomes for chaotic systems, rendering long-term prediction impossible in general. This happens even though these systems are deterministic, meaning that their future behavior is fully determined by their initial conditions, with no random elements involved. In other words, the deterministic nature of these systems does not make them predictable. This behavior is known as deterministic chaos, or simply chaos….”

No matter what the action, when politicians step in to do something, there are unintended consequences.

Wikipedia - Unintended Consequences

In other words there is a direct relationship between the rise of childhood obesity and mandatory bicycle helmets. There is also a direct relationship between the rise of childhood obesity and the use of frutose in many food items instead of actual sugar.  The reason sugar is not used is because of price, subsidies, big agri-business, lobby money, and price supports for sugar.

Then there is the use of Fructose Corn Syrup instead of plain old fashioned sugar in sodas, etc.

“…High-fructose corn syrup, sometimes called corn sugar, has become a popular ingredient in sodas and fruit-flavored drinks. In fact, high-fructose corn syrup is the most common added sweetener in processed foods and beverages. Given how ubiquitous high-fructose corn syrup is, some people are concerned about possible adverse health effects.  …Some research studies have linked consumption of large amounts of any type of added sugar — not just high-fructose corn syrup — to such health problems as weight gain, dental cavities, poor nutrition, and increased triglyceride levels, which can boost your heart attack risk. But there is insufficient evidence to say that high-fructose corn syrup is less healthy than are other types of added sweeteners…”

Princeton News

One reason Fructose is used in sodas, etc is because corn syrup WAS much cheaper to use than Sucrose.

“…A system of sugar tariffs and sugar quotas imposed in 1977 in the United States significantly increased the cost of imported sugar and U.S. producers sought cheaper sources. High-fructose corn syrup, derived from corn, is more economical because the domestic U.S. and Canadian prices of sugar are twice the global price and the price of corn is kept low through government subsidies paid to growers. HFCS became an attractive substitute, and is preferred over cane sugar among the vast majority of American food and beverage manufacturers. Soft drink makers such as Coca-Cola and Pepsi use sugar in other nations, but switched to HFCS in the U.S. in 1984. Large corporations, such as Archer Daniels Midland, lobby for the continuation of government corn subsidies….”

It’s all about the ethanol and the subsidies to buy votes in the midwest.

“...The U.S. Department of Agriculture has concocted another ethanol-related boondoggle — a grant and loan guarantee program to promote the installation of “ethanol blender,” or “flexible fuel,” pumps at gas stations. The Obama administration intends to install 10,000 flexible fuel pumps nationwide within five years, in order to “give Americans a choice to purchase domestically produced renewable transportation fuels,” Secretary of Agriculture Tom Vilsack said on April 11.

But this piles additional government subsidies on already flawed policies that promote the production of ethanol almost exclusively from corn.  And if there were actually a demand from consumers for “domestically produced renewable transportation fuels,” the owners of gas stations themselves would have a financial incentive to install the ethanol-blender pumps.

About 5 billion bushels of corn are taken off the market annually by the U.S. subsidies.  (The 2011-2012 harvest from U.S. corn farmers is projected to be a record 13.5 billion bushels.) The impact on the price of food is significant, because the U.S. is by far the dominant producer and exporter of corn. Because it would effectively reduce demand for corn, the elimination of subsidized U.S. ethanol would have the equivalent impact on markets of boosting corn production in China by 75%, which would certainly lower food prices….”

The unintended consequences of this is higher food prices.

The Right Scoop

“...We are now reaping the unintended consequences of those decisions. Accepting as fact that American farmers are the most productive in the world, and also accepting as fact that the agriculture sector is one of the few sectors of the economy which is performing well, we’re still faced with a problem.

Coming off the third-highest corn harvest in U.S. history in 2010, the carryover (unsold corn still in the elevators) is a bare two weeks’ worth of grain at current and projected usage rates.

This is precariously low, the lowest in modern history. The only time the carryover was lower was in the 1930s — during the height of the Dust Bowl.

The problem here is the mandate, which assumes that corn — which is used in pretty much everything from plastics to baby powder to animal feed — will continue to see record yields. I live and grew up in Kansas, the heart of the Farm Belt, and the idea that every year will be a bumper crop is what we call urinating into a moving air mass.

This year could be a bad year; much of the corn in the eastern cornbelt is late getting into the ground, and from west Texas into Nebraska we’ve got the worst drought in 40 years. Parts of western Kansas have gotten no more than a quarter-inch of rain since the beginning of the year. This means the corn stocks could slip still lower.

Why is this a problem? Much like the price of oil, the price of grain worldwide is based on the dollar. In the case of oil, it’s because we’re the world currency and the largest user of oil. In the case of corn and indeed all grains, it’s because we’re the world’s largest producer and exporter.

Think of the carryover stocks as the strategic oil reserve — it’s there in case we have a bad year. Should that happen we still have grain to sell, and we still basically control the price.

Now imagine we have to start importing grain. Suddenly Brazil or Argentina is setting the price, not us. Once you become a net importer of grain, you cease to be a world player in agriculture.

We’re already dependent on countries who don’t like us for our fuel. Does it strike anyone as a good idea to be dependent on them for food as well?

The issue with the mandate is that it is inflexible. Instead of allowing the market to decide how much corn should be sold to ethanol plants and how much should be sold overseas or used domestically, we’re mandating a certain percentage must go to fuel.

I brought this up to a farmer friend of mine. He told me that about two-thirds of the corn used in ethanol plants is returned to the food chain as distillers grains, which are used for animal feed. Now this seemed a good point to me, but I wanted to check it out. So I enlisted the help of another friend and colleague, PJM’s Charlie Martin — he directed me to Wolfram/Alpha where I could see the numbers for myself. If the two-thirds of the 40 percent of the total harvest is used up, that means over 25 percent — actually closer to 27 percent — is simply gone. The total 2010 harvest was 12.45 billion bushels, so 3.32 billion bushels of corn has been burned in fuel tanks….”

Perhaps the unintended consequence of the demands for ethanol will be the “Mexican Coke”.

It is all about the unintended consequences of the corruption of the whole political machine, big business, and the need to make a bigger buck.  The Pink Flamingo has no problems with business making a big buck, but must it be through corruption?

The whole sugar – soda – fructose – corn – ethanol triangle reeks of corruption.

I wonder what the unintended consequences of banning the light bulb will be?


One thought on “It’s All About Unintended Consequences

  1. This is quite brilliant and provocative, worth a lot of contemplation and calm conversation – hahahahahahahaha, like that’s possible anymore in America.

    Americans are willfully ignorant most of the time. We seem to wake up AFTER the fact, then it’s a race to over-react, demonize one entity (missing the real culprit), make a bunch of dumb laws that enrich a small group of vultures, then the majoriy sinks back into a coma until the next easily foreseen disaster occurs. I’m tired of the cycle. I do not see it changing anytime soon, if ever.

    It makes me wonder how the Pioneer era and the Industrial Revolution ever happened in this country. We sure are emotionally and financially crippled at this stage.

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