Rachel Stern speaks with Gal Luft, an alternative energy activist who argues that flex fuel vehicles are the solution to our oil woes:
RS: What do you think about the bad rap that ethanol has been getting lately? Is it all media hype, or is there any truth to it?
GL: Ethanol is now all of the sudden threatening gasoline at the pump. [Because of this] the oil lobby is coming up with all kinds of stories that ethanol is starving the poor, that ethanol creates food problems. There's a whole propaganda machine there that is trying to get people to believe in this.
How do you explain the fact that rice prices are going up? We don't use ethanol for rice. Nobody does. Clearly there are other factors. I think the main reason food prices are going up is because oil prices are going up. Think about transportation or food packing. On average, our food travels 15,000 miles from food to plate. Think about how much petroleum it takes just to transport food. Think about how much money it costs to fly our asparagus from Chile. That's because they're increasing the price of oil, not because of ethanol. On the contrary, ethanol actually keeps oil prices from being much higher than they are today. Oil prices would be about 15 percent higher today if not for ethanol.
And Dean Baker surveys the economic landscape, arguing that this year's deficit is far from a record:
The latest projections show a deficit of $490 billion. By the absolutely meaningless measure of dollars unadjusted for inflation, this is a record. But if anyone thinks this is giving information to readers, then they have no business writing news. The relevant measure is the deficit as a share of gross domestic product. The 2009 deficit will be equal to about 3.3 percent of GDP. Even if you add in 1.3 percent of GDP for the money borrowed from Social Security this only gets you to 4.6 percent, well below the 6 percent the deficit hit in 1983.
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--The Editors
