Imagine you own an auto repair business and come to find out that your trusty mechanics have been running a chop shop on the side. Obviously, you have the good sense to fire your employees, but would you then let them continue to hang around for another month before changing the locks on the doors?
That is exactly what is happening in Washington today. Dozens of federal lawmakers, who were fired by the American people on November 2, are still hanging around town giddily negotiating a trillion dollar spending bill and stuffing a measure to extend the Bush tax cuts with all kinds of special interest goodies, most notably a multi-billion dollar boondoggle for Big Corn that the New York Times called “wasteful and unnecessary tax breaks for corn ethanol – an environmentally dubious fuel…”
It seems the ethanol producers have managed – once again – to convince farm state senators from both parties that they need one last fix of taxpayer money before those pesky tea party reformers come to town and put Washington big spenders on methadone. And of all the people who you think would have gotten the message from the recent election results, Senator Ben Nelson (D-NE), author of the Cornhusker Kickback, says the ethanol mandate along with a batch of other goodies for wind and solar are “…deal breakers” for his vote on the Bush tax cut extension.
The U.S. ethanol industry is the embodiment of everything that is wrong with our energy policy today. Generous federal subsidies, a guaranteed market share in the form of a federal mandate, tariff protection from lower-price imports like Brazilian sugarcane, and consequent higher costs for American consumers who in this instance are not only forced to buy something they would not otherwise purchase, but are also taxed for the privilege of doing so. Even the Washington Post gets it, calling for lawmakers to remove the provision from the tax deal.
At some point, Washington is to going to have to deal with the ruinous effects of subsidies on the American economy. Economists like to say that things that can’t continue, won’t continue. We are starting to get down towards the end of that sentence. Let’s hope that ethanol – a product that enjoys both a government mandate on consumers to purchase as well as a tax credit from those same consumers – is one of the first things to not continue.
In the meantime, we probably need to be vigilant about the upcoming tax vote. Unfortunately, I expect most Republicans to go along with this (hopefully) last, shameful bit of robbery.