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