No Delegates for Iowa

When the left lambasts a government intervention into the economy and energy policy, you know the program has to be bad.  From Kevin Drum:

Terrific. Let's see: (a) environmentally speaking, corn ethanol is a
pretty dodgy idea, (b) we're subsidizing it anyway to the tune of $3
billion per year, (c) farmers, as you'd expect, are responding to the
subsidies by reducing the amount of farmland used for food production,
(d) this is driving up the price of staple food worldwide, and (e)
we're going to toss another $10 billion in ag welfare to already-rich
corn farmers on top of all that. Jeebus. Can anyone think of any other
single policy that has as many simultaneous baneful effects? Are we
complete morons?

The only quibble I would have with this paragraph is to change environmentally "dodgy" to "provably disastrous in study after study."  Corn ethanol subsidies and regulations raise gas prices, raise food prices,raise taxes, actually increase total energy use (since it takes more energy to make than it provides) and increases CO2 production.  A lose-lose-lose-lose-lose.

Here is an interesting question:  How much of the current government corn ethanol support and regulation would exist if Iowa has the last presidential primary, rather than the first  (yeah, I know, its a caucus, whatever).


  1. sandtiger:

    I don't necessarily think that the primary process is to blame in this case, although it does contribute. The reality is that most of the people I've talked to in urban parts of the country fully favor this kind of handout. There's a certain romance with the American farmer that doesn't exist with other types of business - like somehow they're uniquely contributing to America so they deserve the subsidies and price controls.

    The best thing written on this to those who favor ethanol: "If you hate BIG OIL, wait until you see BIG AG'

  2. Greg:

    For those who believe global warming is bad... wasn't there a thing in the news about the burning of biofuels producing more greenhouse gasses than petrofuels?

  3. Ron Steenblik (Global Subsidies Initiative):

    You might be interested to know that we have just issued a major report that documents the various ways in which biofuels are supported by governments across OECD countries -- which we estimate at around $11 billion a year or more and rising fast. The USA comes out on top in the measurement of total support (around $6 billion a year in 2006), but the EU is close behind, at $4.2 billion. On a per-litre or per gallon basis, several countries subsidize biofuels at an even higher rate than the USA. Canada is also poised to become a significant producer, but at least most of its subsidies (starting next year) will be variable -- i.e., take into account the price of crude oil. You can download a copy of the report, "Biofuels — At What Cost? Government support for ethanol and biodiesel in selected OECD countries", here:

    We shall be releasing a separate report on the EU's biofuel support policies on this coming Wednesday.


    Ronald Steenblik
    Director of Research,
    Global Subsidies Initiative (GSI)
    of the International Institute for Sustainable Development Geneva and Winnipeg

  4. Allen:

    I doubt it has much to do with it. More so because I can't figure out the affect that New Hampshire has had.

  5. sandy2008:

    Pet issues are how bureaucrats operate. They trade off interests between these somewhat minor issues. Your vote on will get my vote.
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