The Ethanol Industry: An Engine of Economic Destruction

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Bastiat: The Ethanol Industry: An Engine of Economic Destruction

By Joseph Salerno

Wednesday, August 6th, 2014

 

In his recent Mises Daily, Dave Albin admirably elucidates the tangle of unseen, long-run consequences that has resulted from uncoordinated government subsidies to the sugar, corn and ethanol industries. But if we narrow our focus to the ethanol industry itself, there is a more fundamental point to be made. For the ethanol industry is a “fiat” industry created not by consumer demand but by the Federal Renewable Fuel Standard(RFS) program established by the Energy Policy Act of 2005 and expanded by the Energy Independence and Security Act of 2007. The RFS mandates that all transportation fuel sold in the U.S. (gasoline, diesel fuel) contains a certain minimum percentage–currently 10%–of renewable fuels like ethanol. This program is nothing but a massive scam run for the benefit of corn growers including gigantic agribusiness firms like Monsanto. As one writer summed up the RFS program:

 

Federal crop subsidies and ethanol mandates shower tax and household dollars on corn growers and ethanol refiners to produce a product we are forced to purchase, that increases fuel prices, provides less energy for our money, adds water to our gas tanks, raises food prices, and degrades the environment.

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Ted Cruz stands alone after the King Corn summit POSTED AT 9:31 AM ON MARCH 8, 2015 BY JAZZ SHAW

Yesterday we covered the acid test of prospective candidates for 2016 in Iowa when it comes to ethanol subsidies and the Renewable Fuel Standard. At that time I promised that I would report back to you on how the 2016 hopefuls did in this admittedly daunting challenge to conservative politicians. I’m sorry to say that, as the WSJ reported for us, the results were less than impressive in most cases.

 

Let’s start with the bad news. First up… Rick Perry.

 

[T]he former governor of a petroleum-rich state [Governor Perry] suggested he didn’t think it would be fair to end the RFS while oil companies continued to benefit from tax breaks. “I don’t think you pull the RFS out and discriminate against the RFS and leave all these other subsidies,” he said.

 

Jeb Bush acted like the RFS is a bad toy, but had no plans to put it back in the cupboard. http://hotair.com/archives/2015/03/08/ted-cruz-stands-alone-after-the-king-corn-summit/

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