Ethanol, or Why Big Government is a Bad Idea

[Sheepdog]

The more closely I examine the US federal government, regulations, and social/economic/ecologic programs, the more conservative I become. I become more anti-statist, antisocialist, and pro-free markets. Incidentally, I also become more sympathetic to the Founders' intent behind the second amendment. :brow:

Today, I listened to a report on the systematic, thourough stupidity that would be more cordially be called our policy on ethanol as an alternative motor fuel. Here, we have an evil conspiracy between head-in-the-clouds environmentalists, the big business lobby, corn farmers, and legislators with much guilt to assuage. And of course, when such an unholy alliance is formed, the average joe voter is the one who gets hosed.

After a cursory web search, I found a good article on why the policy on ethanol is so darn bad: Hidden Costs of Corn-Based Ethanol. Those who get hysterical over peak oil or global warming, and believe that big government will be our savior, and who believe the free market is the devil, need to read this and rethink their positions.

To summarize, including points I picked up elsewhere:

• Artificial demand for corn based ethanol is driving up the cost of corn, doubling it in the last year. Not only does this drive up the prices directly on corn, it drives up prices on food products in general. For instance, meat and dairy production in the US uses corn as it's primary feed. As farmers replace fields of other grains, veggies, and fruits with fields of corn, these other products also go up in price. Prices on foods that use corn syrup (and other corn derivatives, e.g. corn flakes) are also affected. Need I mention that rising food prices hurts the poor the most?
• Ethanol is ineffective as an alternative fuel. This may change in the future, but at the moment we burn more oil-based fuel to produce and transport ethanol than we get. In other words, ethanol itself doesn't make us independent of foreign oil nor does it help stop global warming. It's a loser's gambit.
• Where gasoline is mandated to include a 10% mix of ethanol, the price on gas is artificially high. Poor would of course be hurt again, at least those who have to rely on a junker to get to work.
• Then of course there is the waste of resources (e.g. "flex fuel" vehicles, ethanol stations).

All in all, I can't think of a good thing about this policy. The only people who benefit are big corporations who invest in ethanol production and distribution, or in ethanol vehicles. Oh, and farmers, but only the ones who plant corn. Everyone else is impacted negatively in one way or another.

This, ladies and gents, is what happens when you charge the government with the job of thinking and doing what's right for yourself. You get arbitrary, draconian regulations and/or kick backs for special interests. You get untrustworthy politicians meddling in the economy, typically mucking it up in one way or another.

And this, by the way, is what you will get if we allow them to enact socialized health care. It'll be government cheese all over again.

[jgarden]

• Edited by a Moderator •
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Canada Caps Drug Costs

Canadians are spared higher drug prices, in large part because of price controls. The Canadian government has established a "Patented Medicine Prices Review Board" to ensure drug prices are not excessive.

"They look at the price of the drug," said Dr. Allan Detsky, a pharmacoeconomist at the University of Toronto, "and they say, 'You know what, we have no idea what the long-run costs of development are, but they can't possibly be that high. Forget it.' "

The review board has established a very specific formula for drug companies wishing to sell in Canada:

Existing drugs cannot increase in price by more than the rate of inflation.

New drugs cannot cost more than similar drugs for the same illness.

And a breakthrough drug, the first of a new class of drugs, cannot cost more than the median price for the drug in other countries.

For example, the new cancer drug Campath is priced as follows:

United States: $2,400

France: $760

Sweden $660

Britain $570

Italy $500

The median, or "midprice," is $660, so Canadian regulations say that's the most the drug can sell for in Canada.

• Edited by a Moderator •

http://www.canadadrugstop.com/abc.htm

"All in all, I can't think of a good thing about this policy. The only people who benefit are big corporations who invest in ___________ production and distribution, or in __________ Oh, and farmers, but only the ones who __________. Everyone else is impacted negatively in one way or another." (The Almighty Sheepdog)

Perhaps we could revisit, "anti-statist, antisocialist, and pro-free markets," using the pharmaceutical industry as an example.

By not impsing, "arbitrary, draconian regulations" and not allowing those, "untrustworthy politicians meddling in the economy, typically mucking it up in one way or another," the American public is left to the "tender mercies" of the drug industry where capitalism and the marketplace contribute to drug costs as much as 4X higher than the Peoples Republic of Canada which has socialized health care.

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[!Fluffy!]

It is nice to know that America is subsidizing low cost drugs for our friends in Canada and elsewhere (because they don't have to cover the R&D costs, WE do), however I fail to see what this has to do with socialized health care.

Especially considering the numbers of Canadians who come here paying cash for life-saving operations they can't get at home...

[Jimmy Higgins]

Especially considering the numbers of Canadians who come here paying cash for life-saving operations they can't get at home...

Red herring?

What about all those American children flocking to Canada to escape all the child molestations from the rabid conservative churches? Yeah... you see how you can just make stuff up?

And now I realize that is a huge swerve off-topic.

Ethanol has some serious issues. From my understanding sugar ethanol from Brazil is a better way to go. And yes, this is a good example of why Government shouldn't be directly the leader of changes in such big things because it is easy to be wrong or misled with these technical issues (they are lawyers not scientists or engineers) or caught into the lobbies of certain high power groups (farming corporations).

The government should be helping to invest in the research of these many ideas to see what is and isn't feasible, but engineers and scientists should probably make the final call, not lawyers.

[NeilUnreal]

Since oil is the basis of our economy, as oil prices increase, it will drive up the price of everything, including food. Some of these price increases may be indirect, as in increased production and shipping costs, others may be direct, as in the diversion of food calories for ethanol.

We can tinker a bit with the pathways these price increases will take, but the bottom line is the same: when oil gets more expensive, the overall cost of living goes up. Barring some unforseen discovery, we're in a zero sum game where the available sum is shrinking.

-Neil

[Conductor42]

Sheepdog, you're absolutely right when it comes to corn based ethanol, which only creates 328 gallons per acre. However, Sugarcane and Cannabis are excellent sources of ethanol (they're worth the money put into them), with yield rates of 1200 and 1000 gallons per acre, respectively.

However, our tariffs on sugar currently prevent us from affordably making our own sugarcane-based ethanol (and we simply don't have the prime growing conditions that Brazil has)

[!Fluffy!]

Sheepdog, you're absolutely right when it comes to corn based ethanol, which only creates 328 gallons per acre. However, Sugarcane and Cannabis are excellent sources of ethanol (they're worth the money put into them), with yield rates of 1200 and 1000 gallons per acre, respectively.

However, our tariffs on sugar currently prevent us from affordably making our own sugarcane-based ethanol (and we simply don't have the prime growing conditions that Brazil has)

I wonder if beet sugar would work? And what would it take to start growing cannabis as a substitute for corn based ethanol...

[Conductor42]

I don't believe beet-sugar would work. Otherwise, I would think, they'd already be doing it out here.

For the latter, give it about 10 years. Then all of it will be legal. Otherwise, It'll be a ways off, as even industrial cannabis is illegal to grow in the states. (One of our most economically stupid laws on the book)

[Teallaura]

Sugar beets are viable. In fact, they boost ethanol production from corn. The current problem is that sugar is so cheap farmers have no incentive to grow it.

That'll likely change as corn prices rise and demand increases.

[Teallaura]

I wonder if beet sugar would work? And what would it take to start growing cannabis as a substitute for corn based ethanol...

The latter is extremely unlikely to ever happen, shy of full legalization (love RH but he's dreaming on that one). It would make enforcement a nightmare - how could you tell the legal from illegal crops apart shy of expensive sting operations? Right now if we fly over a corn field and find hemp we kinda know it's time to make an arrest.
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[jgarden]

It is nice to know that America is subsidizing low cost drugs for our friends in Canada and elsewhere (because they don't have to cover the R&D costs, WE do), however I fail to see what this has to do with socialized health care.

Especially considering the numbers of Canadians who come here paying cash for life-saving operations they can't get at home...

• Edited by a Moderator •
1. "Ethanol" is used as an example to support the author's opinion of socialism, capitalism, the freemarket and government interference in private sector.

2. It was the author who introduced "public medicine" in the last sentence.

3. It is highly unlikely that tgood capitalists like the drug industry would sell their products to Canada or any other country at a loss.

4. The American pharmaceutical industry is the most prosperous one in the world and apparently immune from downturns in the economy.Can one justify allowances made for high R&D costs while the industry continues to generate record profits?

5. The $650 million directed toward campaign contributions and lobbying in 6 years could have been better spent on R&D.

.

[Philosophickle]

Apparently you've never been to the Midwest. Every year there is so much extra corn that a quick drive through the country reveals silos and silos of unused, unneeded and rotting crop.

[jgarden]

Does America prefer to send shiploads of money to our good friends in Iran, Iraq, Saudi Arabia or Venezuela rather than buy corn in America?

Would America prefer to dependent on these foriegn states or Nebraska?

[Teallaura]

You don't know those Nebraskans the way wee do...


:gack:

[Jimmy Higgins]

Apparently you've never been to the Midwest. Every year there is so much extra corn that a quick drive through the country reveals silos and silos of unused, unneeded and rotting crop.

"so much extra corn" is a rather relative amount. How much would be needed for fuel?

Does America prefer to send shiploads of money to our good friends in Iran, Iraq, Saudi Arabia or Venezuela rather than buy corn in America?

Would America prefer to dependent on these foriegn states or Nebraska?

If it meant driving food prices up significantly, then Nebraska isn't the solution. Corn ethanol is not the only alternative fuel source!