Trump's Ethanol Boondoggle Exposed

Like every master salesman, Donald Trump loves to tell his audience exactly what it wants to hear.

Last week, at a campaign rally in Iowa, Trump gave Iowa farmers just the political fodder they wanted. He even acknowledged that that was what he was doing when he made his statement. According to The Wall Street Journal:

“And my Administration is protecting ethanol, all right? That’s what you want to hear,” Mr. Trump said at a rally in Iowa on Tuesday, and give him points for political candor. Mr. Trump then announced that his Administration will now allow fuel with 15% ethanol to be sold all year long. The Clean Air Act sets standards for fuel volatility, and E15 hasn’t been allowed in the summer because it can cause smog. Most blends contain 10% of ethanol.

Ethanol fuel is a boondoggle that benefits Big Agra, corn farmers and refiners and no one else. From its creation in the 1970s stemming from the manufactured energy crisis, untold billions of dollars have been dumped into subsidizing the production of corn ethanol.

Subsidies for corn ethanol litter the tax code, which is a case of government “carrot-and-stick” policy that modifies behaviors and distorts the free market. Gas stations get or have gotten over the years massive tax incentives to install pumps to distribute biodiesel or 85 percent ethanol gasoline blends.

As a result, corn, a staple used in many foods and also animal feed, is being diverted by government subsidies into biofuels. In 2000, about 6 percent of U.S. corn production was processed into ethanol. Today 40 percent of our corn becomes fuel instead of food.

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