McCain Free Trade and Ethanol
May 14th, 2008 at 02:24pm KMorrison
Ethanol provides an interesting lesson in government subsidies, why they cause problems and why free trade works better. It’s understandable how in the late ’70’s ethanol subsidies started. There was an interest in finding energy alternatives, and the idea of corn based ethanol held promise. Today there is still a desire to find clean energy alternatives, and ethanol still holds promise. Yet these subsidies, even if well intentioned, create more problems than they resolve. Problem number one, subsidizing corn based ethanol creates an obvious focus on corn. However, the promise ethanol now lays in numerous sources such as switch grass, sugar, or a host of other natural products. Pushing corn slows the development of ethanol from these alternate sources. Second, subsidizing corn ethanol creates an unnatural shortage of corn. Hence food prices rise; not only corn based products, but the cost to feed farm animals increases making the price of meat and dairy products increase too. The working class and those already struggling financially are hurt the most as the price of necessities increase.
Finally, the last problem with ethanol subsidies is they are hard to illiminate. Senator McCain made a very gutsy decision to be the only candidate to go into the Iowa primary stating that he opposed ethanol subsidies. Telling farmers that it is no longer good economics to regulate and subsidize corn ethanol is hard, but necessary. Eliminating these subsidies will help with food prices. It will help allow other sources of ethanol to develop, and will even allow the US to purchase cheaper ethanol from other countries such as Brazil who has plenty. Regulation and subsidies are often well intended, but as is the case with ethanol, problems often arise when free trade isn’t practiced.
Also posted at McCain Independents
Entry Filed under: Campaign Issues, John McCain
12 Comments
1. Eric T | May 14th, 2008 at 6:05 pm
People like honesty, and straight talk. Farmers may not like the news. But, Drivers and people buying groceries do need relief from this inflation because it is unbearable. The democrats tell everybody what they want to hear, but don’t deliver on most of what they said. Kinda like in the 2006 election they promised to bring down energy prices but the prices skyrocketed instead.
Getting rid of ethanol tarriffs from Brazilian ethanol will surely bring down prices.
Ethanol is Energy Independance. And its when you look into it the possibilities become endless. Well thought, open honest plans about slow withdrawl from subsidies would allow farmers to plan ahead, and prevent folk from losing the farm and having the rug pulled out from under them. And not bring research and developments to a screaching halt.
States could be generating their own fuel to sell by growing corn on the sides of the expressway, and the vacant land by the ramps. They could sell it to turn into moonshine to blend with gasoline.
As the demand for the earth’s coal and oil resources grow The Americans need to constantly look to other sources of energy. $4.00 for a gallon of fuel is way too high, the average folk make $8-$15 dollars an hour. The economy runs good with cheap fuel. If good paying jobs are flying out of the country and energy costs are strangling everyone, they don’t have the ability to go out shopping and buy stuff like I-phones, new clothes, t.v’s.
Some people say we have a consumer economy, if that is true, people need more cash on themselves to buy stuff, and keep the economy humming along.
Taxes and high energy costs, high bank and credit card rates, are keeping the people broke. We have lost our buying power.
2. Joe2 | May 15th, 2008 at 8:05 am
Eric T: As the demand for the earth’s coal and oil resources grow The Americans need to constantly look to other sources of energy. $4.00 for a gallon of fuel is way too high, the average folk make $8-$15 dollars an hour. The economy runs good with cheap fuel. If good paying jobs are flying out of the country and energy costs are strangling everyone, they don’t have the ability to go out shopping and buy stuff like I-phones, new clothes, t.v’s.
If you believe all that, then VOTE DEMOCRAT!
They are the ones that will help what you are talking about. The GOP have made all that WORSE over the last 8 years!
People like honesty, and straight talk
Let’s see McCain on Ethanol…
His idea of “Straight Talk” sure has a lot of curves to it.
3. Joe | May 15th, 2008 at 8:06 am
Eric T: As the demand for the earth’s coal and oil resources grow The Americans need to constantly look to other sources of energy. $4.00 for a gallon of fuel is way too high, the average folk make $8-$15 dollars an hour. The economy runs good with cheap fuel. If good paying jobs are flying out of the country and energy costs are strangling everyone, they don’t have the ability to go out shopping and buy stuff like I-phones, new clothes, t.v’s.
If you believe all that, then VOTE DEMOCRAT!
They are the ones that will help what you are talking about. The GOP have made all that WORSE over the last 8 years!
People like honesty, and straight talk
Let’s see McCain on Ethanol…
His idea of “Straight Talk” sure has a lot of curves to it.
4. KMorrison | May 15th, 2008 at 9:18 am
If this were truly a flip he would have done what the other candidates did and support ethanol subsidies. He didn’t do that. These subsidies started 30 years ago and at that time there were legitimate questions about whether ethanol could ever be useful, and those subsidies were taken advantage of by big business. Now that the science has advanced the hope for ethanol has proven to be real, it just hasn’t been proven to be corn-based. The fact the he railed against (and continues to rail against) subsidies for questionable projects I appreciate.
5. Sunny | May 15th, 2008 at 3:03 pm
Telling farmers that it is no longer good economics to regulate and subsidize corn ethanol is hard, but necessary. Eliminating these subsidies will help with food prices.
I grew up on a farm where my family raised wheat and cattle. We didn’t raise corn, but there is a lot of grown in my part of the country. Farmers are now getting blamed for the high costs of food in your grocery stores. The subsidized corn ethanol is not the reason for the high cost of food, but the high cost of gas! Farmer have to use desil to run their farm machinery as do the truckers who haul it across the country.
For the first time in years the farmer is making some money and everyone is pissed off about that. No one seems to mind that the oil and gas industry are getting filty rich and subsidized, but damn those farmers who put their money right back into our economy. They buy John Deere, International Harverster machinery, fertlizer, seed for planting, Chevey and Ford trucks etc. And yet we would rather a Shiek in Saudia Arabia be able to build another palace or buy another AirBus airplane. Why does the American public find so much distain with the American farmer, who works unbelivable long, hard hours 12 months a year, seven day a week to produce the finest food in the world?
6. KMorrison | May 15th, 2008 at 3:32 pm
I realize this is particularly tough on family farms, but the market should be determining what crops are grown and not the government. Personally I’d like to see it so that there is a shift where small farms that had been relying on ethanol subsidies are given a time frame to re-establish themselves in whatever crop makes the most sense for them. Some of the corn growers however, are businesses and not family farms those government payments should stop.
Your right Joe that oil is the biggest problem in the increase in food prices, and it obviously it needs to be addressed. However, ethanol subsidies are a factor in increased food prices too and since ethanol’s promise lays in other areas besides corn it makes this subsidy terribly inefficient.
7. KMorrison | May 15th, 2008 at 3:33 pm
Sorry meant Sunny and not Joe.
8. Eric T | May 15th, 2008 at 4:19 pm
Joe-
This is the truth,
“The democrats tell everybody what they want to hear, but don’t deliver on what they said. Like in the 2006 election they promised to bring down energy prices, but the prices skyrocketed instead.”
Joe they promised us one thing, but what did we get. $4.00 dollar gas. Why would you tell me to vote for those guys.
They block most bills for drilling, raise taxes on the drilling leases, they have done nothing but drive up the price of fuel. If people don’t see this, A democrat House, and democrat Senate and Democrat White House will surely mean fuel prices like they have England or Norway $8-$9 dollars a gallon. The socialized health care, baby bonds, and all their other expense plans will be funded with outrageous fuel taxes.
9. Joe | May 16th, 2008 at 11:36 am
They block most bills for drilling
— drilling in ANWAR would mean that by 2018 you might see the price of a gallon of gas drop by a dime.
We’d be better off spending time and money on some sort of alternative fuel source. There should be incentives to people and companies to come up with that source.
raise taxes on the drilling leases
— I’m not big on extra taxes on oil companies because they will just pass that on to the consumer. I am (as well as the Dem party) all for investigating these oil companies to see why they are making not just record profit, but grossly massive crazy profits while the average American is struggling and a gallon of gas has increased.
they have done nothing but drive up the price of fuel
On January 15, 2001, just before Bush’s first inauguration, the average price of gasoline was $1.46 a gallon. What is it now? 3.75? You want to blame that on Democrats? They’ve been in control of Congress (barely) for just under 2 years.
Eric, you need to observe and read for yourself and not just take what the Republican party is telling you. A Dem congress and white house would not mean $8-$9 per gallon. What is happening RIGHT NOW is what would cause that.
10. Sunny | May 16th, 2008 at 12:48 pm
“but the market should be determining what crops are grown and not the government”
kmorrison
Actually, the market is determining what crops are being grown. The farmers, just as any business man/woman is going to producre what makes them a living. For years the price of wheat, cattle, hogs, corn, soybeans, cotton and every other crop raised by farmers has been cheap. It has always been the middle man and speculators who got rich off of the farmer. The government got into the farmers business years ago dictating what they could grow and how much. I remember many years when my family had to tear out wheat because the government determined it had been over planted. How many other small business have so much government regulations as the American farmer?
11. KMorrison | May 16th, 2008 at 12:56 pm
I’m certainly not an expert on farming regulations, but in general terms I’m all for less regulation and government involvement. There are a whole host of areas where either rolling back or simplifying regulations make sense so that the markets are ‘freer’.
12. Sunny | May 16th, 2008 at 1:20 pm
kmorrison - agreed