Skip to comments.Wall Street Journal rips Newt Gingrich for defending ethanol subsidies
Posted on 02/01/2011 9:02:58 AM PST by SeekAndFind
Newt Gingrich has been touring Iowa lately, attempting to generate interest in a run for the 2012 GOP presidential nomination, and he’s been going the traditional route of defending farm subsidies, especially for ethanol. Gingrich blasted the media for its skeptical approach to ethanol subsidies, especially the Wall Street Journal, saying that “big urban newspapers want to kill it because it’s working,” and then questioned the WSJ’s values. The editors have responded in an unsigned editorial titled “Professor Cornpone,” and they give Gingrich both barrels:
Here’s how he put in Des Moines, with that special Gingrich nuance: “The morning that I see the folks who are worried about ‘food versus fuel’ worry about the cost of diesel fuel, worry about the cost of commodities on the world market, worry about the inflation the Federal Reserve is building into our system, all of which is going to show up as higher prices, worry about the inefficiencies of big corporations that manufacture and process food productsthe morning they do that, I’ll take them seriously.”
The morning Mr. Gingrich read the offending editorial, if he did, he must have overlooked the part about precisely those concerns. He must have also missed our editorial last month raising the possibility that easy money was contributing to another asset bubble in the Farm Belt, especially in land prices. For that matter, he must have missed the dozens of pieces we’ve run in recent years critiquing Fed monetary policy.
Of course, the ethanol boom isn’t due to the misallocation of resources that always stalks inflation. It is the result of decades of deliberate industrial policy, as Mr. Gingrich well knows. In 1998, then Ways and Means Chairman Bill Archer tried to kill ethanol’s subsidies for good, only to land in the wet cement that Speaker Gingrich had poured.
Yet today this now-mature industry enjoys far more than cash handouts, including tariffs on foreign competitors and a mandate to buy its product. Supporters are always inventing new reasons for these dispensations, like carbon benefits (nonexistent, according to the greens and most scientific evidence) and replacing foreign oil (imports are up). An historian of Mr. Gingrich’s distinction surely knows all that.
The WSJ then accuses Gingrich of pandering, but says the problem goes deeper than just check-box politics in Iowa. If Gingrich seriously thinks that the subsidies for ethanol really are working to do anything more than distort markets and put politics above science, then the Journal argues that his judgment is seriously lacking. Ethanol gets lower gas mileage, thanks to its lower energy potential, which is one of the reasons that consumers haven’t bought flex-fuel vehicles. As Jazz Shaw noted earlier, ethanol in higher percentages tends to damage engines not specifically built for the fuel, but this kind of pandering means we’ll all have to deal with those consequences by government fiat.
We have an opportunity to reform government, perhaps the greatest such political opening in almost a century. Farm subsidies in general have to be on the table, but that’s especially true for ethanol and corn in particular. Ethanol has simply proven to be too costly, too difficult to transport, and not an effective enough substitute for gasoline to be practical or cost-effective. Subsidies only hide that fact from consumers at the gas pumps and the showrooms, but the cost to taxpayers for the years of subsidies demonstrate the decades-long failure. Even Al Gore admits ethanol is a bust, for Pete’s sake.
Republicans don’t need a presidential candidate who wants to conduct business as usual by buying farm votes with promises of our money. We need a candidate who recognizes the historical moment for change, rather than the opportunity to sell more of the same.
Newt is blatantly pandering for the Iowa Farm vote. Everybody knows the Ethanol subsidy is a big boondoggle.
Either subsidies for anything are good or they are bad. Newt needs to go away. The last thing we need is yet another socialist running on the GOP ticket.
I AM CORNWHORIO!!!! I need E85 subsidies for my....
Oh, never mind. :)
All I have seen is anecdotal stories and personal experience. Personal experience is that we are getting 10% less mpg, and they are putting 10% ethanol in the fuel. So how am I saving any gas. I'm still burning the same amount of gasoline that I ever was, I just have to fill up more often.
So we aren't saving gas, it's costing a lot to subsidize, and it's driving the price of food up. Where is the benefit? If there is not one kill it.
The larger issue of course is why are welfare queen farmers given first dibs at picking the GOP nominee.
If there were a benefit, the government wouldn’t have to mandate it to be done.
Newt was on top of the world when he rode into congress in the clinton years. He was a great talker, and the Contract for America had it exactly right for the time. Then clinton brought his guns to bear, Newt caved in and started pandering for success, and he went off the rails and mucked up his marriage as well as his political career.
If he had just stuck to honest principles, he would be an important figure today, maybe POTUS, maybe an elder statesman. As it is, he’s just a bad example of what happens when you play for power and self gratification so often that the whole world figures it out.
He’d might as well dump his third wife and pick up with Megan McCain, at this point. Or Dede Scozzafava.
I’m all for a political policy which burns our food.
Ethanol gets lower gas mileage, thanks to its lower energy potential, which is one of the reasons that consumers havent bought flex-fuel vehicles.
It could be the most wonderful thing in the world. No one will know unless free markets choose it. If free markets reject it so be it.
It is wrong in PRINCIPLE for tax dollars to subsidize ANY industry.
You've touched on the real problem.
He’s supposed to be this deep thinker. But his policies are irrational.
I assume Newt missed the memo that each gallon of ethanol requires energy inputs equivalent to 1 1/3 gallons of fossil fuel. All this insanity to counter Algore’s non-existant anthropogenic global warming hoax. I know Newt’s smarter than that.
Sounds like he’s pandering to the Agribusiness lobby which is sucking on fedzilla’s teat for all those subsidies for ethanol so we can continue to burn our FOOD and ruin the engines in our vehicles. That’s ONE way to get more of us off the road.
On a similar note, these environwhackos are now pushing 15% ethanol in the gasoline. I just bought a new gas powered string trimmer. The manual warns that use of E15 gas will void the warranty as it will probably DESTROY THE ENGINE! Brilliant, huh?
...as well they should.
He s already the candidate most likely to follow a snapping thong into the Oval Office sink area.
Guess that's one way to "nudge" Americans into electric or so-called "green" cars.
Everybody knows the Ethanol subsidy is a big boondoggle.
Even Al Gore admitted this
I will support a candidate who goes to Iowa and campaigns on ending ethanol subsidies.
I don't believe that's a true statement. If that were true, we wouldn't need government at all. Yet clearly we do.
There are lots of areas where government appropriately sets rules that benefits us all, that the free market would not do on it's own.
We need to be dilligent against governmental abuses, but don't let that dilligence lead you into thinking that government is all evil and doesn't do some very good things.
Why do we need proof of benefits? Cut the subsidies and quit forcing us to buy it. If it survives on its own then it can be deemed beneficial.
A free market place is the only test needed.
4 out of 10 loads of Corn now go to produce Ethanol.
And if we up that amount to 15% by volume, it will translate to over 5 loads for every 10. (50% of our Corn production in other words.)
It not only increases our cost at the pump, it increases our taxes to pay off the ransom money supporting the subsidies to produce it!
Gingrich = Old Republican = Not conservative = No money or votes from me.
Pollution is not a good example. The government enables pollution yet you give it credit for cutting it? Beleive it or not this country is capable of producing better and cheaper housing in the abscence of codes. Etc is not a good example either.
I will agree on defense but i limited scope. And I will add enforcement of property rights and punishing the guilty.
I'm tired of no being able to buy gasoline!
I want good ol'gasoline and nothing but gasoline, so help me God!
The pipeline companies don't like it cause it craps up their lines, are vehicles are no different, they should pay/or be legally rejoined to their responsibility for stealing our money and ruining our property, that's just the truth of the situation, plain & simple.
Ugh, must engage spell check before posting. My apologies.
Amen. Sit down and shut up Newt...you're embarrassing yourself.
I don't think there are any benefits in this case. But suppose that it really was reducing our dependence on foreign oil and in the process helping defund terrorist supporting states. That would certainly be a goal I could get behind and would support government intervention in the market place to help happen.
If Biofuel was likely to be viable alternative to oil given economies of scale and this program was helping achieve those economies of scale, then again I could support the government intervention. Especially if it meant American jobs vs overseas jobs during a time of high unemployment.
But I think there are better alternatives that have already been proven viable like Nuclear, that I'd rather see the government put it's resources behind. I just think the Biofuel, is not going to be viable unless you go to it 100% like Brazil and even then it's very questionable.
Not irrational, just self-serving.
I believe the part about cheaper. But codes aren't federally mandated. Yet practically every community freely votes to adopt them.
"The government enables pollution yet you give it credit for cutting it?"
huh? How does the government enable pollution? They sit in their offices and do nothing? They don't pollute. Individuals and businesses pollute. And many of them do so with reckless abandon, until government steps in.
A little research will reveal that he's on the payroll of one or more alternative-fuel lobbying groups. Just like that former CIA director James Woolsey who writes articles and gives speeches in which he describes our nation's reliance on fossil fuels as a "national security issue" -- when he's got his own agenda lobbying for the alternative fuel industry and even sits on the board of directors of Plug In America (an advocacy group for electric vehicles).
These people get tiresome after a while, don't they?
Newt, stand aside and let the new boys show you ole boys how it is done. You will not get a vote from anyone in my house.
It couldn't be more obvious. Another is Sen. Charles Grassley (R-Iowa) who's generally conservative but has never seen an ethanol subsidy he'd vote against.
Here pass out these rotten tomatoes, let's have some fun.
If Bio was viable why would you need subsidies to get it going? You would not. But if you consider Bio to be good then the fact that the free market wont make it or buy it is considered a failure.
I will take a free people buying and selling as they see fit over having your preferences imposed on me by government diktat.
Have you looked at the crap being done in the name of Environmentalism with modern building codes? LEED is a joke.
Aaaaargh!!! I get so sick of the myopic politicians who can’t get this issue right. Farmers aren’t beholden to ethanol. What farmers want is added-value ag opportunities. They don’t care if it’s subsidized or not - they just want a market, something other than putting it on a barge and sending overseas.
They also aren’t beholden to growing corn, beans, or whatever. They just want to grow something profitable. They also aren’t particular about growing one crop, they’ll grow several if that makes them money. Profitable crops and a local market, with investment opportunities in added-value ag (i.e. coop) - that’s all they really want. With all the local jobs it would produce, we should all want that.
Here’s the way to frame the issue:
- We need to think bigger than ethanol and biodiesel.
- We should be looking at all added-value ag opportunities that stand on their own feet so that farmers aren’t subject to the whims of politicians every election cycle.
- We should be looking at taking as many things out of a particular crop that we can, and the higher the value the better.
- We should focus on research and developing technology, and a tax structure that promotes this and investment, especially farmer investment.
- We need to better vertically integrate our ag structure here in America to promote jobs and healthy farms.
There is a conservative way to approach ethanol and added-value ag and not tick off the farmer. It’s not that hard people.
“each gallon of ethanol requires energy inputs equivalent to 1 1/3 gallons of fossil fuel.”
Exactly correct. It’s not coincedence that the price of both food and oil has gone up as the ethanol mandates have kicked in. Using oil to boil the corn to make ethanol is ultra wasteful. The higher price of food and fuel is directly responsible for the riots around the world. People who live on $2 a day are getting crushed. Ethanol is racist, it kill brown and black and yellow people at a much higher rate than white people!
How about a neutral tax structure that does not promote anything?
May I assume that the “we” you refer to is the ag industry? The only thing I really need to know is that I am not taxed to support ag and I am free to buy whatever ag products I see fit.
Instead of trying to figure out how the government can help ag why not focus on getting the government out of ag (and the rest of our enterprises).
Endorsing Scozzafava really was the end of Newt for me.
We as in the govt. A great deal of what the govt needs to do is open doors and get out of the way. How about we just stop taxing period? Taxing return on investment is the dumbest policy there is.
The best way to get the govt out of ag is to get out of the way of added-value ag and let the ag sector get beyond ethanol and biodiesel. Not only will you bring jobs and investment, you’ll allow the farmer to diversify and prevent the boom-bust cycle we’ve seen in ag since we went to the commodity farm policy in the Depression.
Newt’s not the only one. The list of cornsnake oil salesmen includes Mitch Daniels, Tim Pawlenty, John Thune and yes, even conservative hero Mike Pence. But Pence has opted out of the 2012 race for the GOP presidential nomination. Although it’s no excuse, those four are at least from farm states that grow a lot of corn. Newt has even fewer excuses for being a Cornhuckster, hailing as he does from Georgia, where the big four agricultural products are poultry, peaches, pecans and peanuts — not corn.
Some facts: One gas tank of ethanol requires enough corn to feed a family for a YEAR.
Ethanol is a net energy loss in production due to petroleum requirements for transport, fertilization, etc.
Ethanol requires tanker trucks as you cannot put it in a pipeline at all. Even more net loss.
Ag is suffering from an idiotic tax code. That is why a neutral code is needed. One that neither hurts nor helps.
Have you looked at the crap being done in the name of Law Enforcement? Do you want to get rid of all Law Enforcement because of a few bad cops?
I'm sure that for every good thing government can do, that someone can find a way to abuse it. Doesn't mean we need to get rid of government, just means we need to remain diligent.