May 25, 2007
Econbrowser: The Movie
I appeared this week on our local PBS television station to talk about ethanol subsidies (one of my favorite rants). If you're interested, you can watch a 5-minute broadcast of that interview via KPBS Full Focus.
Posted by James Hamilton at May 25, 2007 06:40 PMdigg this | reddit
Well done. (And is there an Oscar for Economic commentary?) I mean the idea that the problem is that the politicians are not looking carefully enough when they craft policy...has to be broken to the public carefully (in case any of them are slightly brain damaged vets from another not-so-carefully developed policy) so as not to disturb their beliefs that the New Thing is a cob of corn. Such a long list of disasters with this administration, I think we need to toss in a Purple Heart for the restraint JDH showed in this clip.
Posted by: calmo at May 25, 2007 08:35 PM
I mentioned to you that I'd seen oatmeal and flour jump in my stores ....
Posted by: odograph at May 26, 2007 04:55 AM
Why do Americans love their ethanol so much?
Maybe because the average American is so dumb and gullible. They actually believe what they see on tv or read, or what the government tells them. They are also quick to believe that they are getting something for nothing.
Eventually,after Wall St.and a few energy entrepreneurs/lawyers/accountants/consultants have made their billions on ethanol-based securities,the public will come to the realization that they have been cheated yet again. The sense of outrage will be enormous, Congress will investigate and appoint commissions, tons of money will be spent.
Eventually nothing will happen,the scandal will die down and we'll move onto something else.
Posted by: jim miller at May 26, 2007 05:12 AM
Here is the fact sheet from a May 17 Iowa State U study of the impacts of increasing ethanol production on crops, meat, exports, etc.
Posted by: wogie at May 26, 2007 09:54 AM
Useful link, Wogie. Thanks much.
Posted by: JDH at May 26, 2007 10:09 AM
You tell 'em, JDH!
Posted by: Emmanuel at May 26, 2007 12:21 PM
The ethanol subsidy goes back to the Carter administration and as long as key Senate votes are in the corn belt the corn farmers are safe. ADM and others have been able to take advantage of the subsidy but it is really the farmer vote that counts. A related issue is the barrier to imported sugar. Cane sugar can be grown more efficiently in tropical areas than in Florida or Lousiana. So cheeper ethanol and cheeper sweetner (compared to high fructose corn syrup) would be possible if barriers to imported cane sugar were removed. Again ADM benefits from the barriers to imported sugar but the farm vote is the key. A very large number of taxpayers pay somewhat higher taxes and higher food prices because of the policy but the costs are relatively small to each individual taxpayer. The benefits to each corn and sugar farmer are large. Just getting the public to understand that it takes oil or natural gas to make corn is a step foreward.
Posted by: Sonia at May 26, 2007 01:57 PM
Well, Sonia, I don't know how informed the public is here:
Just getting the public to understand that it takes oil or natural gas to make corn is a step foreward.
Not everyone participates in these educational pastimes, but some large part of that public does know that corn does not come in a box from China, yes?
Can we be a little more charitable to the public, that seems to have no public relations department?
Isn't the real step forward, the one that is not taken, the one that the media refuses to take (like JDH needs to stump on CNN or one of the majors)...in the public's interest?
Instead, ordinary people with no shares in ethanol plants or financial interests in commodities will pay higher food prices, (much higher food prices) to wealthier special interests groups for whom the price of food is not a concern. And I don't mean the corn farmers.
Could be the public is better informed than experts (you may be one) think but discouraged (
Posted by: calmo at May 28, 2007 10:38 PM
In support of what you say, the figure I have heard is that Canadian food manufacturers pay 25% of the sugar price than American ones do. Canada not having a native sugar industry (other than sugar beets) so nothing to protect.
This has caused some American biscuit and bakery manufacturing to relocate to Canada, with free trade.
HFCS is also, metabolically, about the worst way you can ingest sweetener. For reasons not entirely understood, it seems to have a much greater impact on obesity than sugar itself.
Posted by: Valuethinker at May 30, 2007 04:18 AM