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I applaud the Rocky Mountain News’ position against corporate welfare for corn farmers (“Congress should get off ethanol bandwagon,” June 19). The ethanol industry has provided an almost Kafkaesque assortment of moving targets to justify its extortion of subsidies from the American taxpayer and its solicitation of high tariffs from the American government.
Be it energy independence, unfair competition, national security or whatever excuse happens to suit the industry at the time, the common denominator always lies in finding innovative ways to distort free market forces for the gain of a few (the industry) at the expense of many (American consumers and other businesses).

Dmitry Vilner, Centennial

READER COMMENTS

hey dimitry the farmers are using the free market. they are selling to the highest bidder. the ethanol push is done by government mandate and is getting money to move it along. I dont like it either but its all for the enviornment.
you should jump on the band wagon and grow some corn and take advantage of the cash cow out there.
we can import food from mexico to keep costs down.

Who would you rather subsidize - US farmers or oil sheiks whose countrymen have announced their willingness to destroy the US? I don't see anyone complaining about the fact that the oil companies in the US are also being subsidized, and while making landmark profits are neglecting their infrastructure completely but paying their upper management record amounts. I suggest that if we tie oil welfare to oil companies' investments in both at least maintaining existing infrastructure and/or investments in alternative fuel research (combined with higher CAFE standards for all vehicles), we could become energy independent - and might not need to subsidize anyone in that industry going forward.

Mary - I think the same people who argue against farm subsidies would also argue against oil subsidies. The logic here is the same: government subsidies distort the market, artificially inflate prices for the consumers (us), and prevent innovation. By stopping the subsidies now, we'll see just how great our country truly is.

Hey guys, thanks for commenting. To the first poster, let me just say that subsidizing ethanol isn't exactly environmentally friendly either. Encouraging farmers to over-plant corn leads to hazardous fertilizer runoff that has, in the past, been responsible for large pockets of hypoxia-induced dead zones ("red tide") in the Gulf of Mexico.

Mary, I'm not sure what you mean by subsidizing Arab oil sheiks. Do you mean simply buying oil from the middle east? Certainly there's a difference between buying something on the free market and using taxpayer money to pay someone to sell you something at a higher price, which is the case with ethanol. I agree with you that middle eastern oil money might end up in questionable hands. How much of this actually ends up in terrorist hands is debatable. I doubt that oil profits going to the UAE or Qatar are doing little more than financing skyscrapers. At the same time, a country like Iran ought to be under worldwide sanction anyway.

Moreover, if you think imposing higher fuel standards on autos will work to reduce consumption, think again. CAFE is another government scheme that reminds us of the law of unintended consequences: thanks to CAFE regulations, manufacturers began classifying SUVs as light trucks and, well, you know the rest of the story. See: http://econpapers.repec.org/article/blajindec/v_3A46_3Ay_3A1998_3Ai_3A1_3Ap_3A1-33.htm

As far as energy independence goes, this is an unrealistic and ultimately hopeless goal. The United States consumes so much energy that attempting to produce it all domestically would sink our economy. If you're really interested in seeing how these security arguments play out, go to a country like Egypt, which for decades has been struggling with strategic food security. Thanks to horrible government mismanagement everyone is worse off and, believe it or not, Egypt STILL doesn't have food security.

The bottom line is that corporate welfare is a terrible solution to a problem that you can't prove exists. You can't have it both ways, Mary. You can't achieve energy independence without making oil prices skyrocket. And you can't have cheap energy without trading with other countries. If you were actually serious about lessening our dependence on foreign oil, then the best solution is to raise the gas tax a dollar and force people to change habits that way.

The above post is mine (the author of the letter), sorry for not making it clear.

I believe what Mary referred to as "subsidizing Arab oil sheiks" is the fact that we give billions of dollars in subsidies and tax breaks to oil companies when they least need it.

Also- it was Bush's EPA that decided to classify SUV's as light trucks, not auto manufacturers. This was done to let these manufacturers off the hook on producing more fuel efficnent vehicles.

Skimming the study in your link, it says that CAFE standards should be increased. I fail to see how increasing mileage standards will NOT decrease our consumption.

This whole corn based ethanol craze is a joke.
The agriculture sector in this country gets preferential treatment like no other industry. Foreign agriculture is tariffed while the US government subsidizes American farmers.
Brazil uses sugarcane as a fuel source which is much more efficient than corn. It is easier to convert and has much more energy. So what has the American government done, it has put tariffs on Brazilian sugarcane as so fuel derived from it is economically impossible in this country. This has been done to protect American farmers in their quest to grow corn.
Corn goes into a lot of food everything from feeding animals to Pepsi and Coke. As more corn is used as ethanol, the more expensive our meat and Cokes will become as their is less corn around. The incentive for farmers to grow corn means there will be less wheat, rice, etc. to go around. All in all ethanol is a bad idea and another example of how this government's treatment of US farmers not only hurts the US consumer, but the world as a whole.
And don't even get me started on hemp, which can be converted into fuel very easily, it grows very easily, and has about a thousand and one uses besides its potential as a fuel derivative.

Tbone-- I completely agree with you (and Sloane) that *all* corporate subsidies should be eliminated. The oil industry in particular is quite adept at making money on its own.

However, you are inaccurate in your two other points. It's not the Bush administration that changed the rules on EPA guidelines. In fact you can see here (http://www.fueleconomy.gov/feg/FEG2000_Part3.pdf) that the EPA had separate standards for cars and light trucks (including SUVs) for the model year 2000, which indicates cars manufactured mostly in 1999 and in any case well before Bush came to office in January 2001.

As far as CAFE standards go, the paper I cited (Goldberg) concludes that CAFE has resulted in losses of $210 million for auto companies, and was unable to conclude about general welfare gains/losses. Nowhere in the paper is there a prescription to keep or abandon CAFE. It merely analyzes the effects.

Whay none of you have connected up is THE most important part of the E-picture that is WATER.
These corn growers arre pumping the rivers dry!!!!!
I know one of them is on my farm and I am sick of it, I will never grow corn. Anything west of Iowa, corn should be outlawed.
Ethanol is a joke, it is a way to privative huge amounts of water and then dry up everything (PUMP IT DRY)for the rest of us on the planet, and make customers out of us, because no river 's run.

Right on with the hemp, Sean. TOo bad the gov't is completely idiotic with regards to hemp.

I'm not a fan of the green crowd, but cellulous based ethanol has the promise to be a fantastic product when we finally figure out how to make it from none food crops. (Wood , sewerage sludge, corn stalks etc.) The infastruture that we develop now for corn based ethanol will aid in the development of this new and exiciting fuel source. We shouldn't take anything off the table, including coal to liquid and nuclear.

I'm not a fan of the green crowd, but cellulous based ethanol has the promise to be a fantastic product when we finally figure out how to make it from non food feedstocks. (Wood , sewerage sludge, corn stalks etc.) The infastruture that we develop now for corn based ethanol will aid in the development of this new and exiciting fuel source. We shouldn't take anything off the table, including coal to liquid and nuclear.

and don't you love the ethanol commercials? the guy can't even pronounce Colorado correctly....obviously he never has lived here, and the people who pay him don't either...............SCAMMMMMMMMMMMMMMMMMMMMMMMMMm

let's get some real transport going, like 20th century fast trains...anyone ever travelled in Europe...those folks have it SWEET

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