Ethanol producer files for bankruptcy

If Iowa were not the first state in the presidential primary process, then there is a very strong possibility that corn-based ethanol would be a non-story here in the US. If this Wikipedia entry is correct, then we have the Democrats to thank for making Iowa so doggone important at the expense of pretty much every other state in the union!

Iowa is the largest grower of corn; the Iowa Corn Promotion Board points out that "Iowa has produced the largest corn crop of any state for each of the past 14 years. In an average year, Iowa produces more corn than most whole countries." Funny how there is no mention of government subsidies among the reasons for one of the FAQ: Why is corn Iowa's leading crop?

So, it is a no-brainer that the largest corn producing state, which is also the first in the presidential primary process, will then have politicians lining up one after another to sing the virtues of corn-based ethanol. Even a couple of years ago, Slate, one of my favorite go-to-sites, had a fantastic piece on the godawful ethanol subsidies. Slate is no right-wing nut case site, and in fact its people consistently are pro-Democratic presidential candidates. (This year, almost everybody there, but two, is pro-Obama.) BTW, right-wing nutcases also hate the subsidies, and Cato is one such example.

Well, one of the ethanol producers is bankrupt, despite all the subsidies! The NY Times reports that:

The VeraSun Energy Corporation, which accounts for roughly 7 percent of ethanol production capacity in the United States, announced that it had filed for Chapter 11 bankruptcy protection late Friday.

Want more on how corn and ethanol feature(d) in this 2008 elections? Click here for details.

Let them eat (rice) cakes-2

I blogged about research evidence that while the poor, especially in Asia, are indeed eating more meat, this increased consumption is not the cause of the spike in food prices

But, then who cares for research and logic, eh, as the following excerpt from Reason shows:

In a recent interview about the current food crisis, Sen. Charles Grassley (R-Iowa) said, "If part of our problem is that the Chinese are going to eat meat and you've got to have corn and soybeans to feed the Chinese their meat, then why isn't it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?"
Let them eat rice? So that American taxpayers can continue to pay people to turn corn into fuel?
Silly senator, corn is for food.

Ethanol and energy policy

A preview of how much our energy policies will continue to be awfully screwed up after all? Oh well .... From the NY Times: In the heart of the Corn Belt that August day, Mr. Obama argued that embracing ethanol “ultimately helps our national security, because right now we’re sending billions of dollars to some of the most hostile nations on earth.” America’s oil dependence, he added, “makes it more difficult for us to shape a foreign policy that is intelligent and is creating security for the long term.”
Nowadays, when Mr. Obama travels in farm country, he is sometimes accompanied by his friend Tom Daschle, the former Senate majority leader from South Dakota. Mr. Daschle now serves on the boards of three ethanol companies and works at a Washington law firm where, according to his online job description, “he spends a substantial amount of time providing strategic and policy advice to clients in renewable energy.”
Mr. Obama’s lead advisor on energy and environmental issues, Jason Grumet, came to the campaign from the National Commission on Energy Policy, a bipartisan initiative associated with Mr. Daschle and Bob Dole, the Kansas Republican who is also a former Senate majority leader and a big ethanol backer who had close ties to the agribusiness giant Archer Daniels Midland.
Not long after arriving in the Senate, Mr. Obama himself briefly provoked a controversy by flying at subsidized rates on corporate airplanes, including twice on jets owned by Archer Daniels Midland, which is the nation’s largest ethanol producer and is based in his home state.
Jason Furman, the Obama campaign’s economic policy director, said Mr. Obama’s stance on ethanol was based on its merits. “That is what has always motivated him on this issue, and will continue to determine his policy going forward,” Mr. Furman said.