Arnold Kling  

The Pig Club

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Also in the Milken Institute Review, Jerry Taylor and Peter Van Doren write,


A comprehensive study recently published by the nonpartisan International Institute for Sustainable Development estimates that federal and state subsidies for ethanol in 2006 were somewhere between $5.1 billion and $6.8 billion, and that they will soon increase, to as much as $8.7 billion annually, assuming no further change in policy.

Those estimates, moreover, are conservative, because they do not include the benefits bestowed by federal and state ethanol-consumption mandates, loan guarantees, subsidized loans, implicit subsidies provided by tax-exempt bond financing for the construction of ethanol processing plants, subsidized water for corn production, and state vehicle purchase incentives. Don’t forget the regulatory loophole given to manufacturers of flexfueled vehicles – cars that can run on gasoline or blends of gasoline and ethanol – under federal automobile fuel-efficiency mandates.


Given all the pork involved in the biofuels ripoff, I think that those politicians who support it ought to be called the Pig Club.

UPDATE: On this issue, Paul Krugman is in the anti-pig club. If the spectrum of opposition to ethanol subsidies goes from Jerry Taylor to Paul Krugman, it's pretty wide. Is there any economist who likes the subsidies? ...anyone? ...Bueller?


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The author at Knowledge Problem in a related article titled A Potpourri of Interesting Things to Read writes:
    Lynne Kiesling I am playing a little hooky this weekend and going skiing through Monday. In the interim, here are some thought-provoking reads: This Technology Review article on technological change in small-scale coal gasification that could be done o... [Tracked on February 1, 2007 3:52 PM]
COMMENTS (4 to date)
Fundamentalist writes:

I agree completely! And that doesn't include the fact that they're driving up the cost of the primary food for poor people in the world. Prices of tortillas has quadrupled in the last year.

JRip writes:

There are many layers of boondoggle behind ethanol.
Huge water projects are underway to bring massive amounts of water to arid lands in the upper Midwest. Some of this is also making ethanol production possible in some areas where it could not be done.

I hope I get the link right to the Minneapolis Federal Reserve paper on this.

Example from the paper: Water in Sioux Falls will be 1/2 half the cost of water in Duluth which is right on Lake Superior.

Click on the text below.

Minneapolis Fed on water project boondoggles

Matt writes:

Of course, the 2 trillion we spent over the last three years getting Iraq oil does not count.

The solution to climate change is to charge the consumer of oil the full cost, including any climate damages. Apply this rule to imports also.

This is why libertarians are anxious to get through some of these lawsuits so we can all know how much damage we have done. Oncew we have calculated the damages, then simply add enough tax to eliminate the damages.

Simple, even a idiotic big government conservative; with his 2 trillion dollar oil army can figure this out.

Raging Ranter writes:

Given that Bush & Co. are so eager to encourage greater ethanol consumption, it seems a little ironic that they have done nothing to remove a hefty tariff on ethanol made in Brazil using sugar cane.

Given the history of such government-sponsored white elephants, maybe that's just par for the course. If the policy is so nonsensical and incoherant to begin with, we should fully expect such contradictions.

Here in Canada we have similar plans (though not nearly so grandiose, yet) to increase ethanal usage. It remains to be seen just how fat our white elephant gets.

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