What happens when the government plays favorites?

In order to promote ethanol, our government pumps out $4 billion/year in subsidies. Most of that ethanol is made from corn, and the money goes to "farmers", or, more accurately, to farm businesses and cooperatives.

From 1995 to 2005, the top 10 percent of corn subsidy recipients were paid 55 percent of corn subsidies. The top 4 states together (Iowa, Illinois, Nebraska, and Minnesota) receive over half of corn subsidies. It's damned big business, growing corn, not for food but for fuel.

As a result, farmers are planting more corn, which has other consequences, one of which is small vegetable farmers not being able to rent land, because all free land is being artificially moved into producing corn.

Bear in mind that it is an impossibility for ethanol to completely replace petroleum gasoline... there simply is not enough land to grow that much corn, or any of the other crops that could be used to produce ethanol. Ethanol also costs more than it's petroleum alternative.

Growing more corn reduces corn prices for farmers. Ethanol refineries receive tax credits and make huge profits. We pay more at the pump for fuel with ethanol.

Nevertheless, we've been given the hard sell on ethanol as a petroleum substitute. It's called sustainable, and "green"... better for the environment.

Unfortunately, it's all based on a lie. An unpublished Canadian government (which also subsidizes ethanol heavily) study had these results:

The study found no statistical difference between the greenhouse gas emissions of regular unleaded fuel and 10 per cent ethanol blended fuel.

Although the study found a reduction in carbon monoxide, a pollutant that forms smog, emissions of some other gases, such as hydrocarbons, actually increased under certain conditions.

• Ethanol isn't "greener"...
  
• can't replace petroleum...
  
• distorts crop selection...
  
• displaces crops used for food and livestock feed...
  
• harms vegetable farmers...
  
• costs more at the pump...
  
• and costs us billions more in taxes
  

The ethanol scam is a smelly example of government tinkering, of playing favorites, of causing problems worse than what they pretended to try to fix, and of making some people wealthy at the expense of the rest of us. It doesn't take much justifiable cynicism to suspect that a lot of key government officials have pushed ethanol subsidies in exchange for raw cash or sweetheart deals. Even if we were to delude ourselves into giving government the benefit of the doubt, that still leaves them as being dumb enough to buy into a scheme that isn't good enough to compete without subsidies.

Even if ethanol was a good substitute... even if ethanol did reduce polution... government favoritism is wrong and shouldn't be needed for it to compete with petroleum products. Again... and again... and again... government is force, and force is only needed for bad ideas. Good ideas will succeed on their own in the marketplace.

We've been sold a crock of ethanol.