I’M WATCHING A KUDLOW DISCUSSION OF ETHANOL and I think that most of the panelists — except for Frank Gaffney — are bashing ethanol rather uncritically. The problem with ethanol is a government-subsidy problem, and a trade-barrier problem. It’s not a problem with ethanol itself. Make it out of something other than food, and lower the barrier to Brazilian ethanol imports, and it would help our current situation a lot. We’re not doing that because of farm-subsidy politics. The problem is, basically, the Iowa caucuses and the pandering that results. But simply bashing all biofuels uncritically is dumb.
UPDATE: On the other hand, the new farm bill demonstrates that Congress is dumber:
We have a program that makes us overpay for sugar, and now we’re going to start a new program to subsidize the ethanol we create from it â€” because without the subsidy, the inflated sugar price we’ve created will make the ethanol unprofitable.
Upside: Everybody involved has an incentive to pay off some Senators.