How not to argue for ethanol subsidies

I was reading the pro/con arguments for slashing ethanol subsidies in today’s Huntsville Times and just marvelled at the weakness of the column that is supportive of the subsidies.  Here’s the column arguing for cutting the subsidies and here’s the one arguing against cutting them.

The pro subsidy column begins…

Investments in wind and solar energy are a key part of our nation’s energy strategy, but now is not the time for Congress to stop investing in ethanol in favor of these alternatives.

While wind and solar energy need additional research and technological advances to make them more efficient and affordable, ethanol is a proven technology that has been in use for a century. Today, 10 percent of almost every gallon of gasoline you pump into your car is ethanol, reducing our daily consumption of foreign oil by hundreds of thousands of barrels.

First of all, government subsidies are not investments.  But riddle me this.  If ethanol has been around for a century and still can’t be self sufficient in the marketplace then how much longer is it going to take before this alternative energy source is viable.  I think I would have left out the “in use for a century” part if I were arguing for subsidies.

But perhaps the main reason it would be wrong for Congress to cut investments in ethanol production is the same reason Congress shouldn’t be cutting spending in any sector – our struggling economy.

Weak, weak, weak.  That isn’t an argument that the subsidies are good or effective, but rather that the government should throw good tax dollars after bad to prop up jobs in an ineffective, counterproductive industry.

Then comes my favorite part.

There are some who say it’s dangerous to draw energy from a key component of our food supply. Powerful special interests are already actively complaining to Congress that increases in food prices are the result of the Energy Policy Act.

While no one – not even ethanol producers themselves – denies that using corn in the production of fuel has influenced food prices, so has the rising price of oil, international competition and bad weather. Even though the price of a bushel of corn has been cut in half since the recession began, food prices continue to rise, as do the profits of our leading food producing companies. The real intent by critics of ethanol is to find a scapegoat to protect their profits.

There you have it.  Evil industrialists intent on greedily maintaining their profits.  This argument was particularly sad while on the other side of the page was this argument from the competing column:

The impact in poorer countries like Mexico has been far worse, as noted by the anti-poverty group Oxfam, which has been at the forefront of criticism over ethanol mandates’ effect on food prices. Putting poor people’s food in your gas tank simply doesn’t make moral or economic sense — yet that is precisely what corn-based ethanol does.

Yeah, those multinationals like Oxfam just want to keep all their money for themselves and corner the market… wait, they’re an anti-poverty group?  Crap.  There goes the “powerful special interests” just trying to “protect their profits” argument.

Back to the editorial arguing in favor of subsidies…

So there is some evidence that any increases in food costs that result from producing corn-based biofuels are offset by the savings we get by using ethanol at the pump.

Let’s assume that is correct.  There is still the little matter of the subsidies themselves, which means that ethanol is still a net loser.

One of the most prevalent arguments in the pro subsidy column was the ominous “powerful special interest” claim.  To be sure, the energy industry has a very powerful lobby.  So do the farmers.  These unnecessary ethanol subsidies are in addition to already lavish and equally unnecessary farm subsidies that Congress has been unable or unwilling to eliminate due to the power of the farm lobby.  Let’s just leave the “special interest” argument at the door.  Both sides are well armed.

The author closes…

All these industries are job creators. The question is will Congress have the stomach to take on the powerful lobbies that dominate energy policy and squelch competition. Or will they put the American people first and do what’s necessary to meet our growing demand for energy and need for good paying, secure jobs.

It is not the government’s job to provide “good paying, secure jobs.”  The government should let the market decide which industry provides what jobs.  That the author’s closing argument had nothing to do with the viability of ethanol itself, but was a mere plea for the government to prop up jobs for people who make a product the market spurns (has spurned for a century!) shows the true weakness of that position.