Obama’s EPA Continues Handouts for Rich Ethanol Farmers on the Backs of Consumers

Friday, November 16th, 2012 by and is filed under Blog, Economy

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Nothing exemplifies the failure of Republicans to communicate more than the exit polling data regarding the public’s perception of the cost of living.  A whopping 37% of voters selected ‘rising prices’ as their most important issue in the election, yet amazingly, they split their votes evenly between Romney and Obama.  Hence, the arsonist behind the high prices for food, fuel, healthcare, and every other vital product and service affected by his tax and regulatory regime, was regarded as the firefighter by half the electorate.

The single most regressive market-distorting policy to ever emanate from Washington is the absurd tendentious treatment of ethanol.  Over the past decade, ethanol has been the poster child for the worst aspects of big-government crony capitalism.  The ethanol industry has used the fist of government to mandate that fuel blenders use their product, to subsidize their production with refundable tax credits, and to impose tariffs on more efficient sugar-based ethanol from Brazil.  These policies have distorted the market for corn to such a degree that 44% of all corn grown in the country is diverted towards motor fuel blends.  If we would literally flush half the corn harvest down the toilet, we would be better off than using it to make our motor fuel less efficient.

Now, consumers are stuck with higher food and fuel prices, while rich farmers enjoy the favors of free legislation forcing people to buy their odious product.  Although the subsidy has expired, the Renewable Fuels Standard (RFS), which requires that 10% of all fuel be mixed with ethanol, is still in effect.  There is no worse tyranny than using the power of the law to coerce citizens into purchasing an ineffectual product that costs more, and in turn, drives up the cost of everything else along the food chain.

Over the summer, the ethanol debate reached a new tipping point when the severe drought in the heartland destroyed much of the corn crop.  At that point, even the obdurate knuckleheads in Washington began to wake up to the reality of the ethanol boondoggle.  A bipartisan group of 156 representatives, 8 governors, and 25 senators petitioned the EPA to temporarily waive the ethanol mandate in the Renewable Fuels Standard until we recover from the drought.  After dragging their feet for months, the EPA announced today that they have no intention on suspending the mandate for even one day.

Folks, this is the regressiveness of the progressives on display for everyone to see.  The same man who rails against tax cuts for those who pay the most in taxes, has no problem forcing all American consumers to subsidize a boondoggle for the rich.  I have a novel idea, Mr. President.  Let’s not steal money from the rich, but let’s not subsidize them either; let’s not subsidize the poor and working class, but let’s not create the need for the subsidy in the first place.

There is a fierce debate taking place about the source of the GOP electoral loss this November.  Many people are questioning how we can win when so many people are offered handouts from the government, irrespective of how eloquently we defend free markets and limited government.  However, the real key to success is to find candidates who will complete their sentences and articulate to the American people how and why the cost of living has gone up.  We need candidates who will harness issues like ethanol and hang them around the necks of the regressive progressives.  This is a teachable moment for the average American, and it is ripe for anyone to come along and seize.  These are the bread and butter issues that edify government interventions at their worst and how they engender the need for subsidization.  We need to tell the American people that we will not subsidize them, but we will eliminate the policies that precipitate the need for those subsidies.

It’s not too late to begin our message of free market populism by hanging crony capitalism around Obama’s neck and passing a full repeal of the ethanol mandate in the House.  That will change the entire trajectory of the debate over poverty, taxes, and the role of government.  It is definitely superior to passing a special interest farm bill that is chock full of handouts for rich farmers.

Challenge your representatives to submit a bill that will repeal the ethanol mandate and begin rehabilitating the image of the Republican Party as the party that stands with individual liberty over Obama cronyism.

4 Responses to “Obama’s EPA Continues Handouts for Rich Ethanol Farmers on the Backs of Consumers”

  1. Kermit Says:

    Everyone seems to think that ADM, and “corporate” farms are the block to repealing the fuel mandates. They are WRONG.

    Ethanol is mostly, the vast majority, as a result of dry milling ethanol plants. These plants exist almost exclusively in states which have a direct subsidy per gallon of ethanol produced. The one major qualifier is the plant must be owned by local farmers, 50% +1, if you will, local farmers cooperative.

    Here is what happens…

    A company such as POET (the largest ethanol producer in the country) goes into community and makes a pitch to the local farmers. This company will provide design, engineering, construction management, operate the plant and market the production (ethanol, DDGS, and in some cases the CO2), as well as obtain the overall financing necessary. The local farmers provide much of the cash funding, and contract part (up to all) of their corn crop, in numbers of bushels to the plant. Many local farmers borrow money to get into the game. If their crop fails to a point where the harvest is less than contracted amount, they then have to purchase grain to fulfill their contract.

    Yes there is the wet milling process to produce ethanol, as a result of making corn starch and other products. Large multi-nationals such as ADM, A.E. Staley (the founder of what became the Chicago Bears NFL team), etc… are in this business, and have been for eons.

    It was the lawsuits and banning of MTBE that put ethanol in the game bigtime, due to the gasoline additive requirements, already in effect, by the EPA, which turned into an ethanol mandate.

    To get completely off the ethanol train, as per EPA mandate, will likely bankrupt a number of local farmers.

    10 years ago, I sold equipment to a few ethanol plant projects, including stainless steel distillation columns and large decanting centrifuges. Additionally, I was a finalist to be the construction site manager and subsequent plant manager for an ethanol plant in Greenwood, Mississippi until newly elected Haley Barbour line item vetoed the funding of the state subsidy. I had already turned down the job.

  2. Don Says:

    ethanol has no purpose except to increase the coffers of the farmers and the crony politicians that they keep in office by supporting their campaigns. It can be harmful to engines except to those that are designed and built to use it. The stuff goes bad if left stored for any length of time so very bad to use in any kind of seasonal equipment,and when used in an ordinary auto decreases the fuel mileage by about the same percentage as the ethanol content.(10% ethanol= about 10%less mpg) Probably the greatest example of government boondogle of our times.

  3. Melvin R. Nieuwsma Says:

    We should not be using fod for fuel

  4. Melvin R. Nieuwsma Says:

    We should not use food for fuel Get us Out of this

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