Monday, July 23, 2012
Ethanol and Corn: The Power of a Really Bad Idea
By Alan Caruba
It took some eighty years for Communism to fail in the former Soviet Union. Along the way, millions were sent to gulags and millions more died from starvation and World War Two added to the death tolls. Spreading Communism like a religion, it had similar results in China and everywhere it has been adopted.
It takes a long time to rid the world of a really bad idea and, in the latter part of the last century, environmentalism sprung up like a weed to overwhelm the common sense of people with its mix of lies and hatred for humanity.
What does this have to do with the price of corn? A lot.
Under the Renewable Fuel Standard (RFS), an ethanol mandate exists that requires refiners to blend this moonshine with gasoline for the alleged purpose of reducing the emissions that driving a car produces. We are told it contributes to cleaner air and the effects of global warming—which is not occurring.
What it actually does is ruin your car’s engine because it is highly corrosive and it reduces the mileage you would get if it was not part of the gasoline blend. It also ensures that the growers of corn have a government mandated requirement that it be purchased. It is a farm lobby bonanza.
As Marlo Lewis of the Competitive Enterprise Institute points out about the RFS, “No matter how much of the U.S. corn crop is ruined by drought, no matter how high corn prices et, no matter how many people in developing countries are imperiled, the RFS requires that billions of bushels of corn be used to fuel cars rather than feed livestock and people. This is crazy.”
What most people, being city folk, don’t realize is how great a role corn plays in the nation’s economy, its export generates, and the astonishing list of uses to which it is put other than as a vital food for livestock—beef, pork and poultry—and consumed in hundreds of ways by people.
Corn is used in bakery products, baby foods, brewed beverages (bourbon, beer, ale), carbonated beverages, cheese spreads and foods, cereals, condiments, chewing gun, prepared mixes (pancakes, waffle, biscuit, cake flour, puddings), gravies and sauces, canned soups, coffee “creamers”, frosting and icings, in instant coffee, marshmallows, sweetened ice tea, most snack foods….I could go on, but the list is long, very long.
The Wall Street Journal, on July 19, reported that corn and soybean prices leapt to records on rising fears that the searing Midwest drought is further eroding the size of the coming harvests for two of America’s most important crops…The drought now covers more than half of the continental U.S. and covers a wider stretch of the country than in any drought since 1956, according to the U.S. government.”
And, even so, the Journal reported that “U.S. Agriculture Secretary Tom Vilsack said the situation wasn’t bad enough to warrant a reduction in government mandates for how much ethanol—typically made from corn—is blended into gasoline.” As for as Vilsack is concerned the RFS mandate must be enforced.
Marlo Lewis asks “Why as a matter of law should ethanol producers get first dibs on the U.S. corn crop?”
“What should their interest legally trump that of every other industry and consumer affected by corn prices?”
“Why should they have a legal privilege to jump to the front of the line ahead of meat, poultry, and dairy producers, or those who export grain to hunger-stricken countries?”
If we got rid of the ethanol mandate tomorrow our cars would last longer and drive farther. Since they are on our roads and streets anyway, does anyone really believe that air quality would be significant affected?
So ethanol, like communism and environmentalism, is yet one more very bad idea that is backed by the power of government mandates that benefit its growers, but does little else of any value for consumers.
© Alan Caruba, 2012