Ethanol and Iowa.
The U.S. government does a lot of stupid things, perhaps none more stupid than our policy on ethanol.
We subsidize the people who grow corn. We then divert 40% of the corn they grow to the production of ethanol. Then we further protect the corn producers and the makers of ethanol by slapping tariffs on imported sugarcane, which would be a cheaper way to produce ethanol.
Stupid. Yes stupid. Because it takes more fossil fuel to create a gallon of ethanol than we save by producing it.
Stupid. Yes stupid. Because ethanol creates more wear and tear on your automobile engine than gasoline, which shortens the life of your car.
Stupid. Yes stupid.
Because all of us are paying more for food because nearly half our corn crop is being used to produce automobile fuel. Because we are using all that corn for fuel, the price of corn is up more than 70%. Wonder why the price of eggs, chicken, beef, bacon, lamb, and corn flakes have skyrocketed? Now you know. Oh, and let’s not forget that because of the rising cost of food, the cost of food stamps and the number of people using them has also skyrocketed.
Which brings up the subject of Iowa, and the crop of Presidential candidates who are now campaigning there.
Iowa loves ethanol because it has a lot of corn growers who are doing really well thanks to the subsidies, the protective tariffs, the tax credits and rising land prices.
Kudos to Tim Pawlenty for being the first to say in Iowa that the stupidity must end.
Let’s see if the other Presidential candidates have the courage to follow his lead.