Introduction by Dr. John A. Baden, Chairman, FREEAlcohol Poisoning
According to Gallup, Congress began 2013 with an approval rating of 14%. Another firm, Public Policy Polling, found that Congress has only a 9% favorability rating, (one) below traffic jams. " Congress is now less popular than root canals, NFL replacement referees, head lice, the rock band Nickelback, colonoscopies, carnies, traffic jams, cockroaches, Donald Trump, France, Genghis Khan, used-car salesmen and Brussel sprouts."
Over the past decade these findings are not outliers but rather the new norm. Among the explanations for this sorry outcome, one stands out; congress is widely seen to be operating as a dishonest engine of plunder. Rather than establish laws and policies that foster the creation and preservation of value, Congress acts to transfer wealth and preferential opportunities.
Citizens increasingly understand this fundamental fact. Hence they are disenchanted with Congress and with Congressmen. The forceful transfer of value is inherently dangerous. One consequence has been the disintegration of respect for Congress as a body and for public service in general.
Two categories of residents usually benefit from plundering politics, the super wealthy and the dependent class. Both are recipients of largess, benefits extracted and transferred. Both receive welfare.
Using governmental power to help the poor is not necessarily objectionable and is often beneficial. I can't think of any ethical or economic rationale to employ that force to further enrich the wealthy. When benefits go to the well-off, they are always disguised as being in "the public interest". This is the dishonesty I referred to above.
The parable of corn ethanol is a spectacular example of this political pathology. This EPA mandated conversion of food into fuel, some 40% of America's corn crop, has immense ethical, ecological, energy, and economic costs.
Today's FREE Insights by Prof. Mark Perry of the U. of Michigan and AEI briefly outlines these costs. It also explains why congress has earned its sorry rating. It's hard to expect improvement as long as it specializes in the politics of plunder.
“Production of corn ethanol as an automotive fuel source should cease”
by Mark Perry|MLive, January 16, 2013
Among all the problems that have surfaced as a result of using ethanol as an alternative to gasoline, one is especially troubling. It can damage automobile engines and fuel systems. The Environmental Protection Agency’s (EPA) case for E15, a fuel blend consisting of 15 percent ethanol and 85 percent gasoline, has completely fallen apart, as evidenced by the recent report from the American Automobile Association (AAA) that E15 can cause accelerated engine wear and failure, resulting in costly repairs for unsuspecting consumers.
The AAA’s report has again raised the question of whether Congress should roll back the mandate requiring escalating production of ethanol, mainly from corn. The answer is, increasingly, yes.
The Renewable Fuel Standard, which Congress enacted in 2005, originally projected that by 2010 the advanced biofuels industry would have taken off. But that has not happened due to many economic and technological barriers that severely limited ethanol’s effectiveness as a fuel. Cellulosic ethanol made from wood chips, switchgrass, and other sources is still not viable. Consequently, corn ethanol is the only domestically produced biofuel that is available in large quantities to meet the mandates.
Corn ethanol is clearly inferior to gasoline as a fuel source for automobiles. Instead of helping consumers, ethanol provides 27% lower fuel economy than gasoline. Realistically, you have to burn a lot more ethanol-based fuel to create the same amount of energy to power your car, which has unnecessarily driven up the cost of operating a vehicle.
And there are serious long-term adverse environmental implications from using corn ethanol. Growing corn to make fuel requires significant amounts of fertilizer and pesticides that pollute the soil, underground aquifers and waterways. The National Research Council has determined that corn ethanol uses significantly more water in its production cycle than gasoline.
Over the years, the ethanol lobby has claimed that ethanol would help America achieve energy independence. But the reality is that ethanol has played a very small role to date in reducing U.S. dependence on foreign oil.
So far, neither the Administration nor Congress has confronted the fact that 40% of the U.S. corn crop is used to produce ethanol, which has increased retail food prices and strained family budgets in their never-ending struggle to put food on the table. Yet the EPA has twice denied requests to waive the ethanol mandate, most recently in November, even though the corn crop was the smallest in six years due to a severe drought last year in the Midwest. As the ethanol mandate artificially drives up the production of corn ethanol, more and more people in this country and abroad will have to dig deeper in their pockets to pay for food, underscoring just how misguided the push for ethanol has become as the economy struggles to regain its footing in a sub-par recovery.
The first step to adopting a more sensible ethanol policy is to halt the production of E15, since it is caustic and can ruin car engines, while doing nothing to moderate gasoline prices or improve the environment.
The Renewable Fuel Standard requires escalating the production of ethanol, ramping up from 13 billion gallons this year to 36 billion gallons by 2022. Unless cellulosic ethanol becomes available, that level of production would require switching the nation’s entire corn crop to the production of corn ethanol. That would be a recipe for disaster. Congress needs to roll back its mandate. It’s time to stop throwing our tax dollars at ethanol.
Mark J. Perry is a professor of economics at the University of Michigan-Flint and a resident scholar at The American Enterprise Institute.
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