The great Cornholio

Corn ethanol politics 6

I really don't have anything to add, so here are some excerpts from Motley Fool telling it like it is:

My theory is that the political support for massive biofuel expansion comes down to securing constituents' votes. Politicians know they can benefit politically from selling the benefits of biofuels ... and they also know there's too much at stake politically to back away from the issue. What states' politicians stand to benefit the most from backing biofuel? For starters, we can look at the top 10 ethanol-producing states, [by millions of gallons]:

(Thanks KO)

Iowa 3,286
Nebraska 1,345
Illinois 1,212
Minnesota 932
South Dakota 910
Indiana 653
Kansas 507
Wisconsin 502
Ohio 387
Texas 370

Now, do you notice anything politically significant in this list? What if I told you that the No. 11 ethanol producing state is Michigan? Still stumped?

Here's the deal. In recent elections, the Republicans have established solid majorities in the South and the Mountain states, while the Democrats have secured strong footholds in the Northeast and the West Coast. But in 2004, Iowa, Minnesota, Wisconsin, Ohio, and Michigan were "swing states," defined by a projected margin of victory for either major political party of 3% or less. These five states are at the core of a rapidly disappearing American center composed of 64 electoral votes, which neither party can afford to lose.

Frustrating, to say the least. Two more to finish:

I tend to agree with Charlie Munger when he recently said running cars on fuel derived from corn "is about the dumbest idea I've ever seen."

But no matter how much the investing geniuses and I agree on the economics, I think the political tailwind behind ethanol is unstoppable.

My real name is Russ Finley. I live in Seattle, married with children. Suffice it to say that although I am trained and educated as an engineer, my passion is nature. I very much want my grandchildren to live on a planet where lions, tigers, and bears have not joined the long and growing list of creatures that used to be. In an attempt to minimize the workload on Grist editors responsible for turning my submissions into intelligible articles, I will also be posting on a seperate blog called Biodiversivist, which will contain articles in addition to those submitted to Grist.

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  1. Ron Steenblik Posted 3:48 am
    16 May 2007

    An ethical dilemma

    There is also a good article over at DayStar51. A quote:

    Ethanol, dressed down as a mere granola greenscam, is the lingua franca of politicians whose mainstay is corporate welfare. They arrange government subsidies, and the corporations arrange campaign friendships. It's like a Pez refill they all use. Press again, ethanol again. Your money goes in, inefficient fuel comes out, and your money goes into ADM's well-padded pockets.

    [Presidential Candidate] Ron Paul gets poor reviews from the corporate welfare set. Seeking Alpha, an alternative energy site that stands for government-sponsored energy at taxpayer-sponsored cost, ingloriously gave Ron Paul the lowest rating among all the presidential candidates for alternative energy support. ...

    Right now, farmers are understandably selling their feed corn for ethanol production, removing it from the stock feed market. The big push for ethanol is manipulated by the manipulators of the consumer price index. Housing, food, and fuel are excluded from the CPI.  They are excluded because the government says they are too volatile to be included in an index of core inflation. That pretty much leaves discretionary items that change with people's discretionary income once they've paid for homes, food, and fuel-and, of course, taxes and insurance.

    You have to scratch your head while rubbing your growling belly and wonder what's the point. It's invisible inflation: you don't see it in the statistics, but you feel it, like a piercing wind ripping through your checkbook. And what is your checkbook, after all, if not your control over what becomes of your own life energy?

    It is good so see some criticism of Seeking Alpha. I was once naive enough to assume that one of their main contributors would be AGAINST heavy-handed government intervention. Wrong!

    This is one of the problems with the current state of "ethical" investing: people who know deep-down that an industry exists only because of subsidies or mandates will nonetheless advocate investing in it, simply because they know it is a money-spinner. Perhaps somebody should create a new type of ethical investment be created: one that does not invest in industries that are receiving subsidies that cannot be defended on social or environmental grounds.

    Permalink

  2. plantface Posted 5:59 am
    16 May 2007

    Who sez

    ethical investors endorse ethanol or any biofuels in any way?

    Some may and many do not, but from my perspective there is no evident consensus in ethical or 'socially responsible' investing about biofuels.

    Permalink

  3. GreyFlcn Posted 7:08 am
    16 May 2007

    I hope this is all that it's about

    I hope that this is all that it's about.

    Not suprisingly you also see many of the candidates endorsing "Clean Coal".

    Chasing the impossible dream....
    With your tax dollars.

    _

    But yeah, I hope that this whole support for biofuels/coal is just all an act....

    Hopefully....

    Permalink

  4. Ron Steenblik Posted 11:02 am
    16 May 2007

    Not saying ethical investors endorse ethanol

    Or not. That's the point. Maybe another dimension should be added to the criteria for ethical investing: that the industry in question is not a huge drain on the public purse, or at least not without good reason.

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  5. GreyFlcn Posted 4:22 pm
    16 May 2007

    John Stossel

    Not particularly fond of John Stossel.
    But this is a fun little commentary on this subject.
    http://www.youtube.com/watch?v=j9QQcP_Y1II

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  6. Biodiversivist's avatar

    Biodiversivist Posted 3:24 am
    17 May 2007

    Another great find, Grey Falcon

    I can't stand Stossel, although he does have a mustache that would drive Dave wild with envy. Hate to have to agree with him on anything, but nobody can always be wrong.

    In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

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