By DAVID MOON, Moon Capital Management, LLC
May 11, 2008

I'm probably not the most environmentally friendly guy in the world. I still put all of my trash in the same can.

Even I've heard however, that burning, producing and profiting from gasoline and other petroleum products is bad for the environment, if not outright evil. Had he not chosen the occult and murder, some seem to think, Charles Manson might have been an oil company executive. (Think Saddam Hussein listening to Beatles albums.)

That's one of the reasons the United States has been a world leader in urging the use of corn in ethanol fuel production. Senator Lamar Alexander recently said that the U.S. needs a Manhattan Project type of effort to eradicate our dependence on foreign oil.

The government is good at ventures like the Manhattan Project: Secretly spend a zillion dollars to build a thing to kill people.

Alexander the Great, Hannibal, Genghis Kahn and Donald Rumsfeld.... they would all kill to have had their own Manhattan Project.

But our federal track record with humanitarian and economic Manhattan Projects isn't so good. We pay farmers not to grow things, but I suppose that has more to do with Midwest presidential votes than anything else. More recently, we've started pulling ag products out of the food supply and putting them into fuel production.

How has that worked out? Our good friends at the World Bank ' never bashful about asking for U.S. money ' blame the more than 60 percent increase in corn prices over the last two years primarily on our ethanol program.

The United States is the world's largest biofuel producer. No good deed goes unpunished.

Following the oil embargo in 1973, gas prices shot up so quickly that stations had to price and sell fuel by the half-gallon; pumps couldn't accommodate prices above 99.9 cents. I remember reading predictions that gas guzzlers would quickly disappear and all gasoline-powered automobiles would soon follow suit.

Thirty years later, the best-selling vehicle in the U.S., the Ford F150, got a whopping 13 miles per gallon.

Gas and oil prices were still at historic lows early in this decade, at least relative to changes in the prices of other consumer expenditures. People can claim to be 'green' all day long, but look at where they spend their money; that's how you know where their heart is.

Today, I see people seriously incorporating fuel efficiency into their automobile-buying decisions. I'm not talking just about recent college graduates or penny pinchers. The new environmentally friendly car owner is as likely to be a wealthy doctor as she is the receptionist who answers the doctor's phone.

High gas prices are having an impact that the federal government could never match. They are affecting people's real actions ' not just their words.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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