Ethanol production has driven up the prices of corn-fed livestock, such as beef, chicken and dairy products, and products made from corn, such as cereals. As a result of higher demand for corn, other grain prices, such as soybean and wheat, have risen dramatically. The fact that the U.S. is the world's largest grain producer and exporter means that the ethanol-induced higher grain prices will have a worldwide impact on food prices.

It's easy to understand how the public, looking for cheaper gasoline, can be taken in by the call for increased ethanol usage. But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country's largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn't support subsidized ethanol production. That's the stick. Campaign contributions play the role of the carrot.

In America, drivers are fuming and politicians are demanding explanations because gasoline has hit about $3.50 per gallon. That's less than half the price being paid by motorists in most industrialized countries. High to us is low to them. Then there are the oil refiners. Relative to the $120 price of crude, $3.50 for gasoline is so cheap that their margins have virtually disappeared. So "high" in Cambridge, Massachusetts and Oxford, Mississippi is "low" in similarly named cities in the UK, and "high" for motorists is "low" for refiners. It depends where you live, and at which point in the supply chain you find yourself.

But assume that prices are "high", which indeed they are by historic standards. We are mistaken when we think these "high" prices are causing inflation. High oil prices can force consumers to spend more on gasoline and heating oil, at the expense of other purchases. Ask any suffering restaurateur or clothes retailer if you doubt that. But high oil prices can't trigger a rise in the general price level -- inflation -- unless someone pumps money into the economy so that, to use an oldie but goodie from the economists' lexicon, there is more money chasing the same amount of goods.

If you want something to blame for inflation, don't look at oil prices, look at the billions the Federal Reserve Board's monetary policy gurus and their confederates at the U.S. Treasury are pouring into the economic system. The cost to taxpayers of saving the financial services sector from ruin is not only making good any collateral the Fed has accepted that might prove worthless, but the run-up in the rate of inflation.

Naturally, The Washington Post's Juliet Eilperin has a “narrative” for why the world seems to resist the manifestly correct course of action so stubbornly. She says that “some climate researchers who back major greenhouse gas reductions said it is unrealistic to expect policymakers to think in terms of such vast time scales.” She then quotes two climate researchers who say nothing about this subject. Finally, we get to a philosophy professor who gives her what she wants, when he says that global warming “is a classic inter-generational debate, where the short-term benefits of emitting carbon accrue mainly to us and where the dangers of them are largely put off until future generations.”

How can we be so selfish? I guess American democracy just can’t handle the complexity of the issue. We need a Leader who can get us past this petty squabbling and Take Action.

Unionized auto workers in this country average nearly $65 an hour, Toyota workers about $45 an hour. While that might sound like a recommendation for unions, remember which automakers are losing billions of dollars, closing plants and laying off tens of thousands of workers. That's right, nonunion Toyota — which is not laying off its nearly 40,000 American workers and is, in fact, increasing its sales in this country as overall U.S. car sales decline — is not among them.

High oil prices, as unhappy as they make us, are doing God's work, by curbing our appetite for carbon fuel, pointing us to greater energy security and limiting the impact of human activity on the environment. The decline in gasoline demand in response to rising energy costs is proof that markets work and that market mechanisms are our best energy policy.