“Today, the government decides and they misdirect the investment to their friends in the corn industry or the food industry. Think how many taxpayer dollars have been spent on corn [for ethanol], and there’s nobody now really defending that as an efficient way to create diesel fuel or ethanol. The money is spent for political reasons and not for economic reasons. It’s the worst way in the world to try to develop an alternative fuel.” Ron Paul

When bipartisanship breaks out in Washington DC, check to make sure your wallet is still in your pocket. Every time you fill up your car this winter you are participating in the biggest taxpayer swindle in history. Forcing consumers to use domestically produced ethanol is one of the single biggest boondoggles ever committed by the corrupt brainless twits in Washington DC. Ethanol prices have soared 30% in the last year as the supplies of corn have plunged. Only a policy created in Washington DC could drive up the prices of gasoline and food, with the added benefits of costing the American taxpayer billions in tax subsidies and killing people in 3rd world countries.

The grand lame duck Congress tax compromise extended a 45-cent incentive to ethanol refiners for each gallon of the fuel blended with gasoline and renewed a 54-cent tariff on Brazilian imports. The extension of these subsidies, besides costing American taxpayers $6 billion per year, has the added benefit of driving up food costs across the globe, causing food riots in Tunisia, and resulting in the starving of poor peasants throughout the world. This taxpayer boondoggle is a real feather in the cap of that fiscally conservative curmudgeon Senator Charley Grassley. He was joined in this noble effort by another fiscal conservative, presidential hopeful John Thune. It seems these guys hate wasteful spending, except when it benefits their states. The bipartisanship in this effort was truly touching, as Democrats Kent Conrad and Tom Harkin also brought home the pork for their states.

A bipartisan group of 15 senators signed a letter in late November demanding an extension of U.S. ethanol subsidies. I wonder if the fact they have received hundreds of thousands of dollars in campaign contributions during the past six years from pro-ethanol companies and interest groups like ADM, Monsanto, the National Corn Growers Association, and the Iowa Renewable Fuels Association had anything to do with this demand. You can always count on a Senator to do what’s best for his re-election campaign rather than what is best for the country. These symbols of political integrity will always spout the standard talking points:
  • Promoting ethanol reduces our dependence on foreign oil
  • Ethanol is green renewable energy
  • Ethanol is cheaper than gasoline

As we all know when dealing with a politician, “half the truth, is often a great lie.”


Corn is the most widely produced feed grain in the United States, accounting for more than 90% of total U.S. feed grain production. 81.4 million acres of land are utilized to grow corn, with the majority of the crop grown in the Midwest.  Although most of the crop is used to feed livestock, corn is also processed into food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, yogurt, latex paint, cosmetics, and last but not least, fuel Ethanol. Of the 10,000 items in your average grocery store, at least 2,500 items use corn in some form during the production or processing. The United States is the major player in the world corn market providing more than 50% of the world’s corn supply. In excess of 20% of our corn crop had been exported to other countries, but the government ethanol mandates have reduced the amount that is available to export.

This year, the US will harvest approximately 12.5 billion bushels of corn. More than 42% will be used to feed livestock in the US, another 40% will be used to produce government mandated ethanol fuel, 2% will be used for food products, and 16% is exported to other countries. Ending stocks are down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5%, the lowest since 1995/96 when it dropped to 5.0%. As you can see in the chart below, poor developing countries are most dependent on imports of corn from the US. Food as a percentage of income for peasants in developing countries in Africa and Southeast Asia exceeds 50%. When the price of corn rises 75% in one year, poor people starve.

The combination of an asinine ethanol policy and the loosest monetary policy in the history of mankind are combining to kill poor people across the globe. I wonder if Blankfein, Bernanke, and Grassley chuckle about this at their weekly cocktail parties while drinking Macallan scotch whiskey and snacking on mini beef wellington hors d’oeuvres. The Tunisians aren’t chuckling as food riots have brought down the government. This month, the U.N. Food and Agricultural Organization (FAO) reported that its food price index jumped 32% in the second half of 2010 — surpassing the previous record, set in the early summer of 2008, when deadly clashes over food broke out around the world, from Haiti to Somalia.

Let’s Starve a Tunisian

“What is my view on subsidizing ethanol and farmers? Under the constitution, there is no authority to take money from one group of people and give it to another group of people for so called economic benefits. So, no, I don’t think we should do that. Besides, bureaucrats and the politicians don’t know how to invest money.” Ron Paul

The United States is the big daddy of the world food economy. It is far and away the world’s leading grain exporter, exporting more than Argentina, Australia, Canada, and Russia combined. In a globalized food economy, increased demand for corn, to fuel American vehicles, puts tremendous pressure on world food supplies. Continuing to divert more food to fuel, as is now mandated by the U.S. federal government in its Renewable Fuel Standard, will lead to higher food prices, rising hunger among the world’s poor and to social chaos across the globe. By subsidizing the production of ethanol, now to the tune of $6 billion each year, U.S. taxpayers are subsidizing skyrocketing food bills at home and around the world.

The energy bill signed by that free market capitalist George Bush in 2008 mandates that increasing amounts of corn based ethanol must be used in gasoline sold in the U.S. This energy legislation requires a five-fold increase in ethanol use by 2022. Some 15 billion gallons must come from traditional corn-blended ethanol. Nothing like combining PhD models and political corruption to cause worldwide chaos. Ben Bernanke and Charley Grassley have joined forces to bring down the President of 23 years in Tunisia. People tend to get angry when they are starving. Bringing home the bacon for your constituents has consequences. In the U.S. only about 10% of disposable income is spent on food.  By contrast, in India, about 40% of personal disposable income is spent on food. In the Philippines, it’s about 47.5%.  In some sub-Saharan Africa, consumers spend about 50% of the household budget on food. And according to the U.S.D.A., “In some of the poorest countries in the region such as Madagascar, Tanzania, Sierra Leone, and Zambia, this ratio is more than 60%.”


The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 was enough to feed 330 million people for one year at average world consumption levels. More than a quarter of the total U.S. grain crop was turned into ethanol to fuel cars last year. With 200 ethanol distilleries in the country set up to transform food into fuel, the amount of grain processed has tripled since 2004. The government subsidies led to a boom in the building of ethanol plants across the heartland. As usual, when government interferes in the free market, the bust in 2009, when fuel prices collapsed, led to the bankruptcy of almost 20% of the ethanol plants in the U.S.

People fed by US ethanol grain

The amount of grain needed to fill the tank of an SUV with ethanol just once can feed one person for an entire year. The average income of the owners of the world’s 940 million automobiles is at least ten times larger than that of the world’s 2 billion hungriest people. In the competition between cars and hungry people for the world’s harvest, the car is destined to win. In March 2008, a report commissioned by the Coalition for Balanced Food and Fuel Policy  estimated that the bio-fuels mandates passed by Congress cost the U.S. economy more than $100 billion from 2006 to 2009. The report declared that “The policy favoring ethanol and other bio-fuels over food uses of grains and other crops acts as a regressive tax on the poor.” A 2008 Organization for Economic Cooperation and Development (O.E.C.D.) issued its report on bio-fuels that concluded: “Further development and expansion of the bio-fuels sector will contribute to higher food prices over the medium term and to food insecurity for the most vulnerable population groups in developing countries.” These forecasts are coming to fruition today.

It Costs What?

The average American has no clue about the true cost of ethanol. They probably don’t even know there is ethanol mixed in their gasoline. The propaganda spread by the ethanol industry and their mouthpieces in Congress obscures the truth and proclaims the clean energy mistruths and the thousands of jobs created in America. The truth is that producing ethanol uses more energy than is created while driving costs higher. The jobs created in Iowa are offset by the jobs lost because users of energy incur higher costs and hire fewer workers as a result. It takes a lot of Saudi oil to make the fertilizers to grow the corn, to run the tractors, to build the silos, to get the corn to a processing plant, and to run the processing plant. Also, ethanol cannot be moved in pipelines, because it degrades. This means using thousands of big diesel sucking polluting trucks to move the ethanol – first as corn from the fields to the processing plants, and then from the processing plants to the coasts.

The current ethanol subsidy is a flat 45 cents per gallon of ethanol usually paid to the an oil company, that blends ethanol with gasoline. Some States add other incentives, all paid by the taxpayer. On top of this waste of taxpayer funds, the free trade capitalists in Congress slap a 54 cent tariff on all imported ethanol. Ronald R. Cooke, author of Oil, Jihad & Destiny, created the chart below to estimate the true cost for a gallon of corn ethanol. Cooke describes a true taxpayer boondoggle:

It costs money to store, transport and blend ethanol with gasoline. Since ethanol absorbs water, and water is corrosive to pipeline components, it must be transported by tanker to the distribution point where it is blended with gasoline for delivery to your gas station. That’s expensive transportation. It costs more to make a gasoline that can be blended with ethanol. Ethanol is lost through vaporization and contamination during this process. Gasoline/ethanol fuel blends that have been contaminated with water degrade the efficiency of combustion. E-85 ethanol is corrosive to the seals and fuel systems of most of our existing engines (including boats, generators, lawn mowers, hand power tools, etc.), and can not be dispensed through existing gas station pumps. And finally, ethanol has about 30 percent less energy per gallon than gasoline. That means the fuel economy of a vehicle running on E-85 will be about 25% less than a comparable vehicle running on gasoline.

Real Cost For A Gallon Of Corn Ethanol

Corn Ethanol Futures Market quote for January 2011 Delivery $2.46
Add cost of transporting, storing and blending corn ethanol $0.28
Added cost of making gasoline that can be blended with corn ethanol $0.09
Add cost of subsidies paid to blender $0.45
Total Direct Costs per Gallon $3.28
Added cost from waste $0.40
Added cost from damage to infrastructure and user’s engine $0.06
Total Indirect Costs per Gallon $0.46
Added cost of lost energy $1.27
Added cost of food (American family of four) $1.79
Total Social Costs $3.06
Total Cost of Corn Ethanol @ 85% Blend $6.80


Multiple studies by independent non-partisan organizations have concluded that mandating and subsidizing ethanol fuel production is a terrible policy for Americans:

  • In May 2007, the Center for Agricultural and Rural Development at Iowa State University released a report saying the ethanol mandates have increased the food bill for every American by about $47 per year due to grain price increases for corn, soybeans, wheat, and others. The Iowa State researchers concluded that American consumers face a “total cost of ethanol of about $14 billion.” And that figure does not include the cost of federal subsidies to corn growers or the $0.51 per gallon tax credit to ethanol producers.
  • In May 2008, the Congressional Research Service blamed recent increases in global food prices on two factors: increased grain demand for meat production, and the bio-fuels mandates. The agency said that the recent “rapid, ‘permanent’ increase in corn demand has directly sparked substantially higher corn prices to bid available supplies away from other uses – primarily livestock feed. Higher corn prices, in turn, have forced soybean, wheat, and other grain prices higher in a bidding war for available crop land.”
  • Mark W. Rosegrant of the International Food Policy Research Institute, testified before the U.S. Senate on bio-fuels and grain prices. Rosegrant said that the ethanol scam has caused the price of corn to increase by 29 percent, rice to increase by 21 percent and wheat by 22 percent. Rosegrant estimated that if the global bio-fuels mandates were eliminated altogether, corn prices would drop by 20 percent, while sugar and wheat prices would drop by 11 percent and 8 percent, respectively, by 2010. Rosegrant said that “If the current bio-fuel expansion continues, calorie availability in developing countries is expected to grow more slowly; and the number of malnourished children is projected to increase.” He continued, saying “It is therefore important to find ways to keep bio-fuels from worsening the food-price crisis. In the short run, removal of ethanol blending mandates and subsidies and ethanol import tariffs, in the United States—together with removal of policies in Europe promoting bio-fuels—would contribute to lower food prices.”

The true cost of the ethanol boondoggle is hidden from the public. The mandates, subsidies and tariffs take place out of plain view.  The reason blenders (and gas stations) will pay the same for ethanol is because they can sell it at the same price as gasoline to consumers. A consumer will pay the same for ten gallons of E10 as for ten gallons of gasoline even though the E10 contains a gallon of ethanol. Consumers pay the same for the gallon of ethanol for three reasons. (1) They don’t know there’s ethanol in their gasoline. (2) There is often ethanol in all the gasoline because of state requirements, so they have no choice. (3) They never know the ethanol has only 67% the energy of gasoline and gets them only 67% as far. The result is that drivers always pay much more for ethanol energy than for gasoline energy, simply because they pay the same amount per gallon. When gasoline prices are $3.00 per gallon, Joe Six-pack pays $4.50 for the same amount of ethanol energy.

You know a politician, government bureaucrat or central banker is lying when they open their mouths. Whenever evaluating a policy or plan put forth by those in control, always seek out who will benefit and who will suffer. Who benefits from corn based ethanol mandates and subsidies? The beneficiaries are huge corporations like Archer Daniels Midland and Monsanto, along with corporate farming operations (80% of all US farm production), and Big Oil. The mandated ethanol levels are set in law. By providing tax subsidies we are bribing oil companies with taxpayer dollars to do something they are legally required to do, resulting in a $6 billion windfall profit to oil companies.  The other beneficiaries are the Senators and Representatives from the farming states who are bankrolled by the corporate ethanol beneficiaries and their constituents who will re-elect them. The environment does not benefit, as many studies have concluded that it requires more fossil fuel energy (oil & coal) to produce a gallon of ethanol than the energy created. The jobs created in the farm belt at artificially profitable ethanol plants are more than offset by job losses due to the added costs in the rest of the economy. When subsidies are removed or oil prices drop, the ethanol plant jobs disappear, resulting in a massive capital mal-investment. 

Our supposedly wise PhD and MBA leaders have created a perfect storm. The unintended consequences of government intervention in the markets are causing havoc, food riots, starvation and intense suffering for the poor and middle class. Brazil produces sugar cane ethanol in vast quantities and can export it to the U.S. much cheaper than we can produce corn ethanol. Fuel prices would be lower without tariffs on Brazilian ethanol imports. The average cost of food as a percentage of disposable income for an American is 10%. Averages obscure the truth that the cost is probably .0001% for Lloyd Blankfein, Ben Bernanke and Chuck Grassley, while it is 30% for a poor family in Harlem. America’s horribly misguided ethanol policy combined with Ben Bernanke’s Wall Street banker subsidy program are resulting in soaring fuel and food prices across the globe. Poor people around the world suffer greatly from these policies. Below are two assessments of ethanol.     

 “Everything about ethanol is good, good, good.”Senator Chuck Grassley, Iowa

“This is not just hype — it’s dangerous, delusional bullshit. Ethanol doesn’t burn cleaner than gasoline, nor is it cheaper. Our current ethanol production represents only 3.5 percent of our gasoline consumption — yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World.”Jeff Goodell

Who do you believe?

133 thoughts on “HOW MANY SENATORS DOES IT TAKE TO SCREW A TAXPAYER? (Featured Article)”

  1. You’d have to be a moron to think that the government’s ethanol policies are productive. It’s a bribe to agri-business, pure and simple.

    It would be better to just give ADM $6 billion dollars and let the rest of us power our machines with regular gasoline. It would improve the environment and not starve the Third World.

    Grassley ought to be ashamed of himself. What a crook.

  2. Jmarz

    I got it from an article by Ronald Cooke on Financial Sense. Google his name and his ethanol article from 2007 will come up.

  3. Haha eat shit American Taxpayers. The farmers in Iowa thank you for subsidizing their new trucks and their sparkling new GPS enabled, climate-controlled farm equipment. Grassley is universally loved in this state. The other side doesn’t even put up a competition. This year they ran Roxanne Conlin, a big socialist Democrat. I think she got 25% of the vote. He will be in office until he dies or retires (though those farmer types die on the job most of the time rather than retire).

    Really the subsidies, as Steve Hogan mentions, benefit the corn processors like ADM and Cargill. It kind of fucks the farmers in my family over, since they grow hogs and some cattle, making the high price of grain an issue. However, they mostly use their own grain to feed their livestock. And the Big Business model of raising livestock really screwed things up things when you really had to get big or become a cog in the machine. One of my uncles got big and another didn’t have the resources and had to sign all kinds of shitty contracts with the Cargill etc.

    But cheap American grain has other consequences. With globalization when prices are low and their isn’t a market it gets dumped around the world on markets like Mexico. Which was doing okay on its own without NAFTA. The irony is that the areas in Mexico where people first domesticated maize, the small farmers can’t make it and are forced off the land by the fascist state/corporate interest. See Michael Pollan for a discussion of this.

    Ethanol is a boondoggle. I agree. Foreign dependence on oil is a bigger boondoggle. The real cost of a gallon of gas is what? $11?


    My favorite is the “Ethanol Plants will create all these jobs” BS. They are damn nearly autonomous and probably need 30 or so staff to operate. The cost/benefit per job for the taxpayer sucks. Most of the jobs are in the temporary construction. I was driving up to Minneapolis a couple months ago and couldn’t help but see the irony in the fact that I drove by a coal power plant and 2 miles down the road there was an ethanol plant. The ethanol plants are easy to spot because they smell like shit.

    Has anyone seen “The Informant!” with Matt Damon about ADM price fixing? It is worth watching. I believe it is a true story.

  4. I am quite surprised only 2% of corn is used in food stuffs … considering the fact that corn or some derivitive thereof is in virtually everything we eat … including meat since corn makes up most of the animal’s diet. Nevertheless, facts are facts.
    There was an ethanol plant near South Bend, IN that used HP computers. We made a lot of money off them. They never ever questioned ANY pricing we gave them whether for hardware, software, or consulting services. No dickering ever. They simply paid. Their plant manager pretty much told our salesman that they don’t have to worry about revenue or profitability. Not kidding.
    Nice reference to Tunisia. That may be a bigger story than most people realize. Tunisia COULD be the Black Swan/Tipping Point for Islamic nations in that neck of the woods. How many times have the muslim people (not some military coup or small armed faction) actually overthrown a government? None that I can think of off the top of my head. If it spreads to neighboring countries …. look out!!

    It goes without saying … another great article.

    1. Stuck

      Tunisia and their departed President were big time allies of the US. They were 100% onboard with the War on Terror.

      We can thank Ben Bernanke for anarchy.

  5. Screw gas and ethanol. I have seen more bike riders(not motorcycles) this winter since 1982. And I am not talking about those spandex wearing moving billboards on racing bikes I am talking about J6P. I just saw a bike ride past my house and its 19 degrees outside

  6. Iowan

    Thanks for the interesting input. The ethanol scam is ridiculous. It has resulted in higher prices for the basic necessities in life. We have sacrificed the struggles of a majority of Americans for the sake of tremendous profits for a small group of specials interests who are in bed with big government. Government intervention always ends in failure. When will we learn this? These flawed policies will continue to hinder any sound transformation for our country. Americans are beginning to wake up but at a slow pace. Big government is the problem not the solution. Regulations and taxes are not the answer. A smaller government with limited power is the answer. How can someone not be outraged when the facts are presented and it makes no economic or common sense but yet we continue to pursue these practices?

  7. This is actually FAR worse for the environment that people realize; most of that corn is genetically modified with Bt. Bt corn produces it’s own pesticide; one so powerful it actually sterilized the soil in which it is grown (soil is a combination of the organic and non organic matter AND the beneficial bacteria, fungi, and other microbes). The runoff is polluting streams and Bt corn has been implicated in the bee decline. I remember a story a few years back where a silo of Bt corn got mixed with a silo of normal corn and produced into cornflakes before anyone realized it; a thousand Americans were poisoned. Genetically modified crops have been linked to Morgellon’s disease. People who get this develop ‘threads’ that erupt from their skin among other neurological symptoms. The threads have been found to contain DNA from a fungus (the one that causes cankers on trees) which is used as a carrier gene in the genetic modification process.

    1. In PA there is a mandate to use gasoline with 15% ethanol during the winter months. During the summer months my little Insight was getting 44 mpg. Now it is getting about 42 mpg. Thanks Charlie.

  8. Now it is getting about 42 mpg. Thanks Charlie. -Admin

    What does Chucky care when his political career [screwing Americans] is over and he gets millions a year to lobby his former sycophant congressional aides

  9. Iowan, I am from Iowa also. Where do you live?

    I did a one-year contract assignment for a rural water district. One of their customers is an ethanol plant, and those things go through a TON of water – lots and lots of money spent on their water bill. Apparently, making ethanol gives off a lot of heat. Also a lot of pollution. Hell, I *live* in this state and I don’t want to see Iowa get those subsidies. It’s not good for us, any more than it is for anyone else. Back before corn became the government’s favorite crop, Iowa was a major grower of apples. Let us go back to apples, I say. Preferably honeycrisp.

  10. One upside: Ethanol has a really high octane rating. Hot rodders in the midwest can build very high compression (like 14:1 or 15:1) motors for their “street cars” that run on “pump gas”, as long as that “pump gas” is E-85. Subsidized by Uncle Sam, OMG. Hey, someone has to be a winner.

  11. You get poorer gas mileage with ethanol, which more than compensates for the cheaper price. I have only put ethanol gas in my car once, when the temperature was well below zero, because it doesn’t freeze as easily. (Of course a can of HEET would work just as well, but I didn’t have any.)

  12. What is continually left out of the equation is the alternative fodder for ethanol; corn is always chosen because of government subsidies. Corn is one of the least efficient crops for ethanol production, though it is not a net loss as this article suggests, it is simply a very slim margin. Non-food crops such as cattails product far more ethanol per acre and subsequently use less energy per gallon to produce. We have several projects that utilize constructed wetlands filled with cattails for tertiary sewage treatment; primary anaerobic digestion yields methane and the effluent goes to the wetlands where the cattails uptake excess nutrients and clean the water for use as irrigation. The cattails are harvested and processed into ethanol where the remaining wort is composted and used as fertilizer.

    If we were to use more projects such as this we could reduce the amount of energy and resources spent on sewage treatment while yielding both a natural gas and a liquid fuel. This however is too hard for an oil company to monetize…

  13. Was anyone else told as a kid “clean your plate-there are starving children in India”? (or Africa, or whatever). I can see the next generation-“don’t drive excessively-there are starving children in Tunisia”. I wonder if the average Tunisian knows we are burning what they call food?

  14. Very good points taken.
    Here in Europe (especially Czech Rep.) you drive through many many acres of Rape seed fields for Bio-Diesel. I do not know how the economics works out for Rape Seed, but it is thousands of acres not being used for food.
    But to my main point, and I smell a large rat in a related field. And that is the over-abundance of natural gas, and what seems like a propaganda line that it is almost worthless for America. So it appears that we are going to be shipping it to Europe, (I am guessing at a rock bottom price), allowing the French and Germans and others to have a cheap competitor for Russian gas, and thus helop them hold their prices down.
    Please remember, there is no central planning in America right? Free markets must be maintained, so a natural resource that could drastically reduce oil consumption here is being shipped out at a bargain price, while oil will be imported. What a shame in a free market we cannot force conversion to natural gas, in a strategic manner, to bring about the largest reduction of imported oil, for the lowest retooling costs. The Germans or the Chinese would never allow anything so absurd (in my opinion) . And to add insult to injury, I have to speculate that the lion’s share of the profits of the gas will land in the pockets of the Energy Internationals, while the normal US citizens are left with the cash outflows for oil imports.
    This is all speculative, without figures to back it up, but it definitely deserves some serious research.

  15. Pirate Jo – I live in Iowa City. Federal policy has messed up Iowa agriculture for generations. Prohibition destroyed one of the largest grape growing industries in the nation (something like 3rd). Only now is it coming back to any extent, and who knows to what extent it will since the snobs have imbued a sense of superiority into the French/Californian grapes.

    1. This guy called High Plains Drifter on ZH is really good. I’d love to get him over to our site.

      by High Plains Drifter
      on Sat, 01/15/2011 – 17:12

      Yes hope and change gathered last weekend in Arizona, the most stupid idiotic display of brainless drivel I have seen in a while. They all had their little shirts on, shirts that were provided to them, with the words , “together we thrive” . They really didn’t give one good damn about those people who got killed , but only to start some stupid politcal movement for the man of change for 2012. It sickens me to think that I live among people like that. It sickens me to think that many of our founding fathers did so much to try and start this country out on the right foot but now look at it dying on the vine. Who is there that will stand for her, in her time of need? Who is her champion now? Where is he or she? No where to be found. The silence is deafening as this nation dies.

  16. They sure don’t make patriots like they did 250 years ago, do they?

    Things are not bad enough in the FSofA (except to the insightful thinker types like TBP readers) to do more than make J6P uneasy and the ones’ out of a job and broke just collect all the freebies the FSofA makes sure continues to flow. I mean when you are so broke you’ll never pay it back to anyone, what’s a few hundred million more for food stamps, unemployment, subsidies for electricity, et al, ad nauseam ??.

    The leaders of our fair used-to-be Republic will just keep printing to keep the beast at bay which will work until it doesn’t. Remember he/she who uses the printed trash-money first gets the most benefit from it.

    We have passed the tipping point, IMHO, and what comes next is anybody’s guess. I think I’ll take a trip to the shooting range Monday and burn a few clips just to make me feel better. (Damn I wish I had a few 30 round clips – I could probably melt a barrel with a 3-4 of those!)

    And yes, I have a Florida permit to carry and yes, I exercise it – especially when going to Orlando. With the dick-heads driving up here to rob banks now, I may have to exercise my carry rights here just to be safe in a Winn Dixie strip mall parking lot.

    Now I feel better.. Thanks..

  17. Iowan, I live in West Des Moines. We call Iowa City the Island of Misfit Toys, but in a loving and affectionate way. I know lots of people with pleasant but hazy memories of that town, and it is where Team Ska congregates every year on Ragbrai.

    I always thought farming seemed like a cool job. Of course it helps if you have a farm, and with the government essentially having nationalized the industry, I don’t think I would enjoy farming in its present state. Recently in the newspaper, they were as usual bemoaning the loss of young people from Iowa. One commenter said it would cost a young person $3.7 million to buy a farm and get started in the business. It’s certainly out of MY range. I really can’t afford to spend that much to buy myself a job, only to have to pander to the government for enough subsidies to remain competitive.

  18. So let me get this right.

    The Fed keyboards currency into existence in the Treasuries credit account.

    The Treasury then makes bonds, bills and notes to sell to investors and loan to the government.

    The corn lobbyists wine and dine politicians for corn subsidies.

    The corn lobbyists then buy legislation from the elected representative to make laws that ethanol must be used as an automotive fuel.

    The taxpayer, liable for the money government borrowed, with interest, from the Treasury, then pays the corn industry to not grow so much corn to keep prices high under the guise it will keep prices low.

    The private Fed is financing all this with money ex nihilis.

    Is that really nationalizing the corn industry?

    Seems to me, and I could be wrong, that the corn industry is exacting a tribute from the people putting the taxpayer in debt to the banksters.

  19. I find a lot of misinformation in this article troubleing. I wish I could address everything, but I will just address a few realities that I see from my farm.
    1. Corn is a very efficient store of energy. In 2010 I collected 102million BTU’s of solar energy on EVERY acre of corn ground using nothing but natural rain as a hydrogen donor and pulling carbon (CO2) out of the air to bind with it. I use no nitrogen because It follows a legume crop, and I do not turn any soil. I make three trips accross my fields- Plant, Spray, Harvest. These trips combined take 3 gallons of diesel per acre or .013gal/bu. More than half the corn crop is stored in large piles on the ground, needing no silo. I transport corn 19 miles to the ethanol brewer hauling 1000 bushels burning 8 gallons of diesel or another .008 gal/bu. The plant brews 2.7 gallons of corn whiskey (ethanol) for every bushel that I haul in, and 40% of what is hauled in is hauled out as DG (Wet distillers grain) for feeding cattle, displacing corn that they otherwise would have been fed. So every acre on MY farm captures enought sunlight to provide 607.5 gallons of energy that is safe enough to drink (before added to gas), as well as 10,000pounds of feed for producing steaks and hambergers, while using .0078 gallons of Fossil Fuel diesel per gallon of ethanol end product (figuring nothing for the feed).
    2. Ethanol’s effect on food prices
    a. The enviornmental movement pays absentee owners of farmland to grow zero food on 30+ million acres of CRP contracts every year for “habitat” That could be growing a lot of food.
    b. The enviornmental movement has turned thousands of acres of food production into desert in the Klamath baisin for suckerfish habitat. Same story in the California Central valley putting minnow habitat before food. Flooded farmland is expanding in North Dakota by a forced growth of Devils Lake. Imperial valley is getting water rights taken away…. etc…etc.. The stoppage of horse slaughter in this country has stopped an export of protien to france and other countries who eat horse meat, and have turned animals that used to have value into a liability that have to be buried instead.
    c. The price of Corn was half of what it is now as recently as last July. Investment funds are record long while Commercials are record short.
    d. We are exporting record amounts of grain. Export terminals cannot load out any faster. We are not withholding any from the rest of the world – we are supplying them even more. They just had bad growing conditions. It happens.
    e. Farmers can’t grow below the cost of production. Costs are affected by a falling dollar just as corn prices are. I recieve less for corn now than my father did 30 years ago when adjusted for real inflation.
    f. Americans dispose of 40% of our food. It just gets thrown out Think about that.
    g. A family buys more gas than bread or corn-flakes. double corn add .04c to a box of corn flakes. double wheat add .04c to a loaf of bread. eliminate ethanol add .25c to the price of a gallon of gas. Which do you buy more of per month?

  20. Farmers in Nebraska and the Dakotas brought the U.S. closer to becoming a biofuel economy, planting huge tracts of land for the first time with switchgrass—a native North American perennial grass (Panicum virgatum) that often grows on the borders of cropland naturally—and proving that it can deliver more than five times more energy than it takes to grow it.

  21. Kill Bill,
    No, it would be much harder. Harder to prepare seedbed, harder to plant, more labor, machinery, and fuel intesive to harvest, bale, stack, store, and less dense and more expensive to transport.
    I grow alfalfa in rotation with my corn, and I have alot more time,machinery, fuel, and labor per acre with biomass than I do with corn.

    I could never capture the amount of BTU’s with switchgrass as I can with corn, and I would loose the Nitrogen efficientcy of the crop rotation If I grew a nitrogen hungry perenial grass.

    The last issue, is with corn you feed the plant as well as the soil. Grain for food, and residue to feed the biological life in the soil. Harvesting switchgrass for fuel is nothing like native prarie, because you are not returning any carbon/humus back to the earth. Biomass removal is less sustainable than grain removal.

    P.s. I don’t grow corn because I want to. I would rather grow alflafa for dairies. But it works good in a rotation and prices encoraged me to. If prices were to drop for corn, I would not be growing any, and the supply would shrink.

    1. FamilyFarmer

      Is your scenario the rule or the exception? I have no problem with ethanol for fuel. I have a problem with subsidizing ethanol with my tax dollars and keeping Brazilian ethanol out of the US with tariffs. If ethanol can stand on its own two feet as a cheaper alternative to Middle East oil, then great.

      Thank you for posting. Real world examples are much better than theory.

  22. Thanks for the information FF. Its good to talk to an actual farmer.

    But it seems as if we are looking at energy in two ways. The one being for you to produce it and energy which the consumer would get from it.

    I read switchgrass produces 540x times more energy that was used to grow it.

    But what your saying is that the price you get for it and the labor, and fuel costs, etc involved in farming it isnt viable for the farmers?

  23. Also Kill Bill,

    If anyone is paying tribute to me, I must have missed it because I grow crops worth almost 1million dollars, and live on 40K while paying Uncle Sam over 180K on Federal income tax, State Income tax, Alternative minimum tax, twice the SS & Med tax, property taxes on both land and machinery, sales taxes on repairs, parts, exise taxes on trucks and trailers. They do pay me back 6K (included in the 40k) for following their rules and reporting, The rest goes to expenses.

    Good luck to you and your family.

  24. Oh, and I forgot the Heavy Vehicle Use Tax (2290) well as the Corn Checkoff (tax) that my state tried to sieze to balance it’s budget shortfall.

  25. Oh, and I forgot the Heavy Vehicle Use Tax (2290) well as the Corn Checkoff (tax) that my state tried to sieze to balance it’s budget shortfall -FF

    I dont think thats right just as I dont think states robbing private pensions to pay for states shortfall is right.

    I read where the total shortfall for all fifty states debts is something like 140 billion.

    Thats less than what AIG was bailed out for but for some reason there is a law that the Federal reserve cant bail out state debt.

  26. @Kill Bill,

    “Is that really nationalizing the corn industry?

    Seems to me, and I could be wrong, that the corn industry is exacting a tribute from the people putting the taxpayer in debt to the banksters.”

    Interesting angle. Either way, it’s nothing I would remotely call a free market.

  27. The US is full of sheeple. No matter what facts are placed in front of them, they will not learn. Now go watch your mind-numbing TV entertainment Id10ts….

  28. What FamilyFarmer leaves out is the number of BTU’s used at the ethanol plant to A) mash the grain to convert starch to sugar (being a brewer myself–mashing takes a lot of energy), B) distill the beer to 95% ethanol, C) dry the ethanol to nearly pure 100% ethanol, D) dry the distillers grains, E) treat the wastewater effluent created by the ethanol creation process, F) transport to the ethanol to California from the grain belt, etc. The energetics are great from the seed to the farmers gate. It is the processing of the grain into ethanol that really sucks energy.

    The Brazilians have the right idea. The sugar from the cane is used to make ethanol and the bagasse is used (with leftovers) to fire the whole ethanol creation process.

    But in some sense, FamilyFarmer is right, if his acreage has a high CSR (thats Corn Suitability Rating for you non-Midwesterners) then he’s never going to grow cellulosic ethanol. It’d be a better use for him to grow corn. (This is assuming the status quo for oil.)

    But its all still a philosophical argument… we need an EROEI of ~10. The modest, maybe 1.3:1 EROEI for ethanol isn’t going to cut it.

    1. I’m feelin the love from Yves Smith. She linked to my article on Naked Capitalism. I wonder if this means I can comment on her site?

  29. “FamilyFarmer” sounds like a Goobermint Plant to me. Congrats Jim, you have finally made the Big Time, you have your own Harry Wanger on Board here to tell everyone how really Ethanol from Corn is GOOD and all the nonsense your read that it has a Negative EROEI is FALSE!

    I am no expert on this topic, but Iowan brings up some important points FF left out, but besides that in principle even with the best yields with the best water with the best soil you just cannot produce either ethanol or biodiesel at the rate it is being consumed at these days. Also clear is that every acre dedicated to Ethanol production for automotive transport is an acre taken away from Food consumption. Also obvious is it takes a whole lot more energy to move a 2 Ton SUV at 60MPH than it does a Homo Sapiens to move at 15mph on a Bicycle. So under no circumstances can you justify converting corn to ethanol for vehicle usage when the same corn would neable more people to live out their lives reasonably if most of the people burning gobs of energy in their SUVS would just give that up. Zero Sum Game there, every BTU of energy you use up is a BTU some starving person could use to stay alive.

    Of course, right now this conflict hits only peole in Tunisia, not for the most part people here in the FSofA, not even the FSA who stay decently fed with SNAP Cards. Give it a little time though, and this conflict will hit your family also.

    Coming Soon to a Theatre Near You.


  30. Is anyone surprised at this? No matter what the subject, it always results in spending your money for their interest. It has nothing to do with helping Americans anymore. People have to get passed the ideal that you have to be a Democrate or Republican or this will continue forever. Next time think about changing to independent and you will quickly start seeing things differently. When you see something being criticized by one party or the other, or by some government official it only mean they are afraid of it……… maybe the TEA PARTY. These people are the only ones left that haven’t been bought!

  31. Thanks to Family Farmer for putting some reality into this. It always stuns me when I read nonfarmers think that people actually eat corn that is used for ethanol. It is not the corn you buy in the store. It is not the corn used for chips and tacos. It is field corn used to feed livestock and for other purposes.

    I do have to wonder how ethanol could stand on it’s own two feet if we pulled the troops and warships guarding the oilfields out of the mideast, or if this cost were just passed on in the cost of gasoline. What would it be then, $10/gallon?

    BTW, in my opinion, switchgrass for ethanol will never really be feasable. The volume that will need to be handled is staggering, it is hard with corn, which is quite concentrated.

    Ethanol is not evil and neither is Chuck Grassley.

  32. eugend66,

    I read the article and it makes no sense. China is worried about rising prices, so they cut the supply (imports) and draw down their stocks to an even tighter level??

    Maybe someone could explain that one to me. Thanks for the link.

  33. Read part of this article over at Naked Capitalism, Yves referenced it in one her articles. There may be personality differences between you two but she knows good information when she sees it.

  34. Nah, Efarmer, I thank you! Cutting imports means less export. Living on what they grow
    is not out of the question. There are monies, assets all to be given away to ppl.
    One step closer to the capitalist dream will ease all the riots.
    A newborn ‘ middle class ‘ , in those ghost cities will do the trick.

  35. Interesting angle. Either way, it’s nothing I would remotely call a free market. -Pirate Jo

    Yes, exactly! Its just Laissez Faire that floaters [think tanks] have re-branded to make it palatable for the general public and support such an irresponsible system.

  36. I feel a certain synchronicity this morning.

    Automatic Earth is my first read each day. ok so far.

    Burning Platform is next. The article from Automatic Earth about zombie money is there.

    Coming Depression is next. The article from Burning Platform about Ethanol is there.

    I wonder how far i can go. Naked Capitalism is further down the list but maybe i should go out of order this morning.

  37. Generally I go for the news first then head over to the science and physics sites to prepare and then to economical type sites such as TBP and FS in order to refill my napalm tank for the inevitable flame wars at the last stop,,,,political websites.

    Im just glad Smokey is such a above the board guy, a lover of humanity and veritable bouquet of benevolence, a shining knight on an errant journey of peace else I would have died of the battle long ago.

  38. Hi KB,

    I’m trying so hard to maintain a big picture view of the world
    so i start with the big picture economic views such as TBP
    and THEN read the news to see if the news/noise flow supports
    or contradicts my big picture view.

    1. Avalon has been doing most of the grocery shopping for the last two months, but this morning I did the grocery shopping at the Giant near our house. The government says that food prices went up 0.1% in December. That is the biggest crock of shit I’ve ever heard.

      A few months ago when you would go into the Meat section there would be chicken, steak, pork and bacon on sale. You could get boneless chicken breasts for $1.79 a pound. There would be 2 for 1 for London Broil. You could get a package of bacon for $1.99.

      Today, nothing was on sale. Everything was full price. Food prices are effectively increasing at an annualized rate excedeeding 10%.

      1. These are the types of emails I receive and the responses that I give. If you choose to email me, be ready for the response. Feel free to send Clark an email.

        —– Original Message —–
        From: “Clark Tomlin”
        To: [email protected]
        Sent: Saturday, January 15, 2011 10:01:17 PM
        Subject: Ethanol

        You know, you’re argument isn’t new. We’ve debated this issue many, many times here on our local blog. You are yet another handwringer who is saying that the World will starve to death because of ethanol. Guess what? It’s not true. Producing ethanol from corn does not destroy, use up, or otherwise prevent it’s being used as a cattle feed which is what corn is primarily used for. In fact, brewer’s grain (the by-product of ethanol production) is a most sought after by-product of the ethanol-producing process. Why, oh why do you persist with this pathetic line of reasoning? What is your motivation? Are you owned lock, stock, and barrel by the oil companies? It’s just so old and meaningless at this point it’s hardly worth the argument. Try again somewhere else will you?

        Clark Tomlin CPA


        Clark. I really don’t care if you are a CPA. So fuck you.

        I have no problem with ethanol if my tax dollars don’t subsidize it.

        You are part of the FREE SHIT ARMY.

        I’m owned by no one you fucking dickhead.

        You pricks ignore the facts because you love your free shit.

  39. Hi KB, I’m trying so hard to maintain a big picture view of the world
    so i start with the big picture economic views such as TBP -Specie

    Same here, were just going about it in different ways, no argument there, but it is also why I stopped watching TV years ago as it tries to do just the opposite by cramming a big world into a little iluminated box in thirty minutes time + commercials while claiming that it was representative of the big view.

  40. Everything was full price. Food prices are effectively increasing at an annualized rate excedeeding 10%. -admin

    I do my own shopping and like you said have noticed the same thing especially with poultry and meats.

  41. “Efarmer

    Your part of the Rural Free Shit Army.”

    I guess I am. I do receive taxpayer subsidies. It encourages massive overproduction and cheap food for the consumer. When I graduated from college in 1977 food was 19% of a famililes food budget. Now it is something like 9%. Just awful, isn’t it?

    But please admit, so are you. Taxpayers are subsidising (through the military) cheap oil. Why is that acceptable?

    And please, no name calling. It gives me the sense you aren’t really interesting in discussing this.

    1. Efarmer

      Are you new to this site? I want the US military out of every country in the world. Big Oil, the Military Industrial Complex, Wall Street banks, and farmers need to compete without my tax dollars subsidizing them.

      You can produce as much ethanol as your heart desires. Just do it without me subsidizing you. Are you subsidizing my long commute to work every day? Give me your address and I’ll send you a bill.

      Free shit is free shit, whether it is being handed out to lazy good for nothings in West Philly or whether it is handed out to some farmer in Iowa.

  42. Direct ethanol production consumes 3 gallons of water for each gallon produced vs 2 gallons per for gasoline. WTF, aren’t environmentalists worried about our fresh water supplies?

    I wonder how many FamilyFarmers are out their thinking I will grow corn instead of other crops due to government meddling in price discovery processes. Unintended consciences for diverting our corn usage with farmers saying, “hey i think i will stop growing wheat and grow corn instead,” scares me. Yahoo! Wheat prices go up for no supply and corn goes up because of demand.

    However…potential positive side effect of less bread means we all eat corn tortillas…drive the price up high enough and could be spun as an illegal immigration solution…hmmm…need to mull on that some more…

    No wonder our country is broke…we pay farmers to grow corn (subsidies that don’t make it to the FamilyFarmer just the corporatefarmer) and we pay ethanol producers tribute to turn corn, energy and water back into energy that we add to thin out our existing energy source.

  43. Efarmer—– Interesting that you rationalize being subsidized by the taxpayer. I wonder how long you’d survive if the whore lobbyists for agriculture went on extended leave. Or if Congress outlawed the fucking pork that your representatives bring home every year to swap for votes in your district. Tell you what. Since you are so proud of your subsidies, how about subsidize my dick ?

  44. “in 1977 food was 19% of a famililes food budget. Now it is something like 9%”

    Wonder what the comparable percentages are for a family’s tax bill. Oh wait, that would only apply to the half of the people who actually PAY taxes. FSA benefits dutch-door style.

  45. Stop the Farm subsidies and let the free markets work the way it was intended to work..The giveaway of taxpayers money has to stop and then perhaps things will get back to normal. I know foreign poeple who have bought up acreage in the states and fully paid for it with government tax dollars…why do we allow that to happen?

  46. Yes, I am new to leaving comments on the site. I have admired the writings of Jim Quinn for some time and have forwarded many to family and friends. They know that I left the Republican party for reasons that Mr. Quinn (administrator?) would completely understand. Government has gone berzerk in size and spending. It is immoral. Ag is totally guilty here.

    If you would read back, I never once said that Ethanol or ag should get any subsidies. I do not understand when one subsidy is attacked while another is given a free pass. On this site, I am guilty for drive by reading and not understanding the complete libertarian view here. My fault.

    In closing, I do not understand the need by many to use profanity here. It completely diminishes the point that is being made. Imagine if anyone in public ran around talking like that, what would be the reaction.

    Lastly, I have no clue who claims to be the Efarmer who wrote the penis related rant above. It is not me.

    1. Efarmer

      Don’t let the profanity deter you from posting. This site is a little harsh. We unload on each other, but don’t hold grudges.

      I’m a Ron Paul Libertarian. I’m against subsidies for anyone. In comparison to what the Wall Street banks have done to America, ethanol is a pimple on America’s fat ass.

      Thanks for your views.

  47. Efarmer—–Apparently you have been duped by some sinister bloggers on this site regarding the size of my package. Condoms are readily available in my size at any pharmacy. Just select the Trojan Triple Extra large. But to put the size issue to rest, once and for all, just ask your wife. She swallowed a half pint of my baby batter this morning while you were milking your cows.

  48. “In closing, I do not understand the need by many to use profanity here. It completely diminishes the point that is being made.”

    Efarmer —

    1. — Politicians, bankers, and the powers that be FUCK US IN THE ASS on a daily basis.

    2. — Posters here do not like being fucked in the ass.

    Therefore, we complain about being fucked in the ass by using language such as, “I hate being fucked in the ass!”

    If you don’t like profanity then go take a fucking dive off a tall building. This is not a place for you. And we sure as fuck don’t need a dweeb like you lecturing us about it!

  49. “In closing, I do not understand the need by many to use profanity here.”
    Efarmer, I respectfully submit that you are confusing needs with desires. I have no need to use profanity. None. But I do desire to vent on a forum that encourages multiple points of view while simultaneously allowing a wide range of expression. This place is not for the thin skinned. It is not a schoolyard and it is not a church.
    When you venture onto this board and defend ethanol and Chuck Grassley and DON’T think you will get your ass lit up, then you DESERVE it all the more.

  50. Efarmer
    You’ll have to get over the cursing, name calling, taunts, trash talking, sexual innuendos and other point diminishing stuff tossed around. That’s the way things roll. Plenty of people post without including all that stuff, and plenty else gets said by those who do.

  51. Dont listen to Smokey. What he isnt telling you is he is inserting a spaghetti noodle into a 4″ dia PVC pipe 12″ long.

  52. 1977 food was 19% of a famililes food budget. Now it is something like 9%. Just awful, isn’t it? -EF

    I guess that depends on how a families budget is figured. With rising fuel prices and insurance premiums going lunar. That is to say that food isnt getting as expensive as fast as other things in the budget.

  53. From 1950 to 1965, median family income rose from $24,000 a year to $38,000 a year. That’s close to 4 percent a year, close to 60 percent over 15 years. That’s a rising tide.

    From 1975 to 2010 median family income rose $42,936 to $49,777. That’s not quite 16 percent over 25 years, less than six-tenths of 1 percent per year.

  54. “Administrator says:


    Thanks for your views.”

    Phew, for a minute I wasn’t sure there was a Santa Claus.

    It is a common theme out here in the heartland that it really is wrong for us to be receiving any subsidies anymore. It is getting embarassing. It really is quite small in the scheme of things, we get about 3% of our gross in payments, but it is really hard to explain to a young family who pays taxes and is trying to make ends meet.

    Keep up the good work Jim.

  55. Good writing, only thing its not the worst thing I’ve seen ads f/cat litter made from whole corn
    (not husk’s) you can’t make this shit up! Only in US would people have thier animals shitting
    on food while people are starving in the world,(Haiti 140 miles off fla)

  56. Corn [teosinte] isnt a naturally occurring crop and would die off rather quickly if it wasnt for humans taking care of it.

    I also question its nutritious value as a food.

  57. I won’t argue about probable corrupt good old boy agreements between congress and corporate farming interests. However, there are some pertinent facts which articles like this one always leave out.

    For instance the article states: “More than 42% will be used to feed livestock.. “; and also: “Of the 10,000 items in your average grocery store, at least 2,500 items use corn in some form during the production or processing.” Now, how many of you concerned citizens know the difference between field corn which supplies the first category, and sweet corn which is what us humans eat? How many of you understand the processing differences? Do you think field corn is reduced down to cobs or kernels and even perhaps canned for the cattle’s dinner needs?

    Or do you understand that field corn, stalks, leaves, cobs and all, is most often just harvested with huge choppers, no not Hells Angels, but harvesters that sweep thru the fields turning standing corn into chunks blown on the go into accompanying dump trucks to create huge piles of corn silage. Ethanol plants are not the only things that create what Iowan thinks ‘smell like shit’ – although perhaps he is confusing cattle yards with fermenting corn. Because you see, corn silage, ferments – those huge bio-mass piles which are often in sheltered berms and/or covered with tarps, naturally generate heat and the corn undergoes a natural fermentation process which produces… ‘ta da’: ethanol. Cattle love corn silage and those huge piles last out the severest winters with no problem.

    Which brings us to another question about reporters with agendas or with no farm background experience making statements such as: ‘Added cost from waste $0.40’ Now what ‘Waste’ is this? The vast majority of left over ‘waste’ from corn alcohol production is a high protein food, which is used as a supplemental livestock feed, or is added to food which we humans consume. Nobody with any sense throws the ‘waste’ mash (the solids left over) away as they are too valuable. Yet the income from this is not mentioned here or any where else by critics.

    You may very well be correct about the corruption, but you don’t do yourself or anyone else any honors by tacking on every off the wall ‘cost’ you can think of and leaving out valid income sources everyone connected with the industry understands. And just to really irritate you I’ll ask why the devil in this list of yours there is no offset costs for the imported oil the ethanol displaces – isn’t that the justification for these programs? Belief in a cause is all fine and good until you let bias take over and spin everything out of control, for then you become just like the deranged left and their climate nonsense.

    1. m02

      You’ve added your 2 cents but you have not refuted any of my FACTS. Why is it that people with agendas, like yourself, hate facts? Because they reveal you to be a mouthpiece for your special interest.

      Another member of the Rural Free Shit Army steps out from behind the corn stalk.

  58. m02—–You make several legitimate points. However, your points leave the larger issue unaffected. The fact remains that taxpayer money is being compelled (by force ) to subsidize ethanol in what is, by any definition, a huge net waste of taxpayer money in a ridiculous farce.
    My aunt has a turd she keeps covered in a silver chalice up on a shelf in her cabinet. She takes the chalice down once a week and removes the turd and polishes it. It remains a turd.

  59. With permission, I would like to copy this and return it and a check for $ 0.01 to good ole boy Sen. Dicky Lugar in the donation request letter he sent to me. He is at least a s lousy as Grassley. But, should I send it to his office in DC, or his large farm in south/central Indiana?

  60. Corporate monopolies are what is driving the cost of food, not farm gate prices. In this time of “soaring” food prices, the cost of wheat in a loaf of bread is still about a dime. Who gives a shit over a 2 cent increase.

  61. Underfire – you ignorant twit – the people of the poor nations give a major shit about it, given they buy much of their food raw and not processed. Use your head for other than a hatrack.

  62. Loved your article about ethanol. The last time I took chemistry, using yeast and corn to make ethanol produces vast amounts of Carbon Dioxide. Does anybody know what they are doing with the CO2 or are they just releasing it to the atmosphere to cause more warming, another added cost of making this fuel?

  63. llpoh So you think Cargill and Company is going to pass on a 2 cent discount to overseas destinations? What a joke, lmao. And by the way, how long do we have to keep extending welfare to foreign countries? Maybe they should limit their population to what their resources can provide.

  64. Tom Skowronski——You will find most people here are very concerned about the adverse consequences of the CO2 release. More man made global warming is the last thing we need. In fact, the release of the CO2 in the ethanol making process is by far the hugest cost of the entire process to our civilization. I mean, there should be massive legislation passed immediately to outlaw the release of carbon dioxide. Every person should be forced, by law, to pay a fine every fucking time they exhale, since they are releasing carbon dioxide into the atmosphere. I bet you believe in leprechauns too, Tom.

  65. Underfire – you indicated 10 cents in grain going up 2 cents. That is a 20% increase in commodity cost (I think it is much higher). The poor nations of the world will be extremely hard hit by such an increase. Commodity prices are world-wide. Who the fuck is talking about welfare to other countries? The point is that subsidizing ethanol is artificially driving up commodity prices. That in turn is hitting the poor world-wide. It is hard to believe you are so dense.

  66. For those of us who have been paying attention, this latest revelation of the incompetence and lack of seriousness in Congress is no real surprise.
    The “ruling class” political establishment truly believe that America is Too Big To Fail and as such refuses to take any responsibility for their actions. Congress is not evil, but lazy, feckless and ignorant, that is why economic collapse is not just inevitable but indeed imminent.
    The United States is unlikely to make it to the 2012 elections before the wheels fall of the train.

  67. lloph It’s impossible to get a handle on farm commodity prices by “such a percent” increase. In 1987 I paid $130 per ton for feed wheat for my cattle operation, this year I stocked up in june for $120, now I’d be paying $170, two years ago I paid $200. The point I’m making is that the corporate monopilization of American agribusiness, not farm gate prices, is responsible for food inflation, and yes, milling grade wheat is selling for about $240 per ton to the farmer in the Klamath Basin where I live, or about 12 cents per pound. As for poor countries paying for food, does it really matter what the price is if they grow their own, or provide something of equal value to the world market? Say they grow their own, that money just circulates around within their economy anyway. The elephant in the room is still oil and energy.

  68. HFCSES corn-syrup_N.htm?csp=

    Almost half of tested samples of commercial high-fructose corn syrup (HFCS) contained mercury, which was also found in nearly a third of 55 popular brand-name food and beverage products where HFCS is the first- or second-highest labeled ingredient, according to two new U.S. studies.

    HFCS has replaced sugar as the sweetener in many beverages and foods such as breads, cereals, breakfast bars, lunch meats, yogurts, soups and condiments. On average, Americans consume about 12 teaspoons per day of HFCS, but teens and other high consumers can take in 80% more HFCS than average.

  69. Opinionated, “Congress is not evil, but lazy, feckless and ignorant, that is why economic collapse is not just inevitable but indeed imminent.”

    I’d say you’re half right, in that collapse is inevitable. But to say that Congress is lazy, feckless and ignorant, and is by extension responsible for our current crises, is to insinuate that someone better could be produced to lead our country. This, in my opinion, completely understates the seriousness of our situation. Our problem is us, “we” vote in who will deliver to us the most stuff. This country is fractured beyond repair. There’s a thousand factions all demanding more. Big biz., Banks, unions, poor, tax payers, tax recievers, on and on.

  70. Aside from the environmental and socioeconomics of corn, ethanol is a poor fuel. What’s better? It’s 138 octane higher mixed alcohol fuel. Biodegradable fuel that can be synthesized almost anywhere, from solid and liquid wastes, biomass, coal, methane and CO2. Just look in your trash can for feedstocks, or the county dump. Or sewer sludge. Or coal. Or woody biomass. Or methane and CO2.

    At 17 percent methanol, 49 percent ethanol, 20 percent propanol, 10 percent butanol, and the rest of the higher C-5 to C-10 alcohols in declining amounts, higher mixed alcohol fuel is non-corrosive, so it can be pipelined. (Ethanol can’t be pipelined, it must be trucked or railed.). “HMAs” are also cleaner and much cheaper to produce.

    There’s a lot to like about alcohol fuels. But which alcohol fuel, and which production method, would you like to see take root? The one that extends the ethanol train wreck, or a more powerful and plentiful, biodegradable fuel that can be made anywhere, from almost anything?

    The incumbent technology has a long, well understood track record, which means that breaking into the fuel business with an alternative process–even one that is clearly superior in volume potential and fuel quality–is tough. The incumbent has the benefits of scale and cost. And the corn ethanol lobby controls the dialog in Washington, and even determines the language of biofuels. Ethanol from corn, or any other source, isn’t the last word in clean fuels by a long shot.

    America, you do have a choice.

  71. Jim

    Have you seen “Gasland”? My wife got it and watched it, and I could only stomach watching a bit of it. It is unbelievabley outrageous and horrible to see how the land, water, people, and animals are poisoned and despoiled in the process of hydrofracking.

    I was wondering if you could write a similiar article on hydrofracking to extract natural gas to demonstrate the “cost” to the public of the gas produced, but I think it would be impossible. You could find the cost in terms of amount of petroleum energy used in the 400-600 tanker truck trips used to bring the water to each well and so on.

    But the terrible, grevious, downside to our capitalist system is that one cannot put a price on the poisoning and destruction to our environment and our people in the process. No price can be properly determined, so it is assumed that there is no “value” lost, outside of the cost of the lawsuits to the companies.

    And here I moralize: There is such an evil, evil side to our government and system of laws where people and entire pieces of Nature can be destroyed in some way in order for some to individually make a “profit” at the expense of everyone else.

    While watching some of the scenes where people were describing their illnesses and the contamination of their water for their livestock, I kept thinking and asking myself, as you do in other articles, how long will people stand for this? The answer appears to be far, far, too long.

    The Spectre that is behind this destruction is the same spectre behind the Too Big To Fail Banks and Globalism – greed and the desire for profit and the willingness to destroy anyone and anything to get it. The willingness to crush individuals and nations and social fabric without a second thought, as long as money and power are acquired.

    I grew up in Pennsylvania, in Bradford County, out in the rural areas, and these scenes are painful to watch.

    I can’t believe people can be so restrained when their families and land and livestock have been so ruined by these gas companies. I think that part of the original justification for the Second Amendment is ex post facto. You have a gun not only to try to prevent your wife from being raped, but also for retribution if she is raped.

    These gas companies are raping the land and the people on the land and I find it hard to understand why someone has not brought that retribution directly back to the gas companies. Where are the domestic terrorists and environmental extremists of whom the government is so afraid? Where are they when we need them?

  72. @Efarmer

    In 1975 (closest I can get to your ’77 reference), in the heart of the largest recession since the Great Depression (obviously, at that time), food stamp participants totaled 19.4 million, or 8.9% of our fellow citizens. Today it is 14% of the population (25% of children) for a grand total of 43.4 million.

    So, while we claim that we spend “less,” the truth isn’t so pretty, unless you think we the productive, the risk-takers, the workers, aren’t paying for the increase of the population on our backs. Unless, like the farmers subsidies, you somehow believe it is free.

    Side note: coming down the pipe, thanks to many things (like people feeling entitled to live in the desert) and using food for fuel, packaging and a million other items, is going to be the bust/shortage of all times. Fresh water.

    People can live with less food – and that would be good for our country – but we can’t exist without fresh water.

    It’s beginning to look like Peak Government, Peak Oil and Peak Water are going to diverge around the same time.

    Ethanol isn’t helping that equation at all. Even Al Gore admitted (in a speech in Europe, apparently he hasn’t the balls to go on the Today Show and admit it) that ethanol was not a good idea and he knew it when he pitched for ethanol/farmers subsidies & bribes in the Senate. Tennessee has an awful lot of farmers.

    Thanks for another enlightenment Jim.

  73. TeresaE,

    Apples and oranges. Every year the USDA figures the cost of a food basket and divides it by national average income. If you want to argue the numbers, talk to them, I’m just the messenger.

    On a somewhat related side note, since it gets pretty quiet out here, one of my more humorous activities is to drop my wife off at Walmart, park in the fire lane, and watch the people that go in and out. Stunning.

  74. Respectfully Efarmer, it is NOT “apples and oranges.”

    The money comes from somewhere, yet the group paying shrinks.

    Yes, 9% of my income may go to my food costs, but 100% of my sister’s, and her boyfriend and their six kids, goes to my taxes or the deficit.

    I’d rather pay 19% for my own damn food, and ZERO percent of hers. I’d be much farther ahead.

  75. Well I know another industry that will see an enormous boost in the States if families in Harlem or other poor areas need to spend 40% or more on food costs – private security.

    Maybe the politicians were right when they said that the future of the US economy was the service sector. I wonder having if having armed security guards at the entrance of every remaining middle class subdivision was what they had in mind. There definitely will be a need for at least 2-3 million guards…and I suppose that they are mostly “green” jobs since security guards stand in a hut and can patrol on bikes.

    For my part, based on where I live, I’m already both investing in a small rice farm as well as buying physical rice that can be stored for the coming year should there be a shortage. I am buying it not because I’m personally afraid of the extra costs. I’m afraid of what might happen if my own security guards are forced to pay greater than half of their monthly pay on food in the event of a shortage.

    All I know for sure is that a huge spike in food prices worldwide is going to have worldwide fallout. Anyone who isn’t preparing in one way or another is going to get burned….and probably in ways they’ve never imagined.

  76. Admin

    I just read your article “Too Small To Matter”. I missed it last week – too busy – sorry. I usually read them all; this is the primary site I visit on the net for economic commentary.

    Regarding the people’s reaction to hydrofracking, I think there must be thousands and thousands of guns in Pennsylvania, along with some militia. When I grew up, even we had 6-8 pistols and rifles that we rarely used, not being hunters, and my father was a physician. But we had them nonetheless.

    And so it occurs to me that there are no domestic terrorists. If there were, they would already be operating in Pennsylvania, sabotaging tractor trailers and the drilling sites, which are unguarded and vulnerable, taking the fight against corporate fascism directly to the board rooms and homes of the executives. If there were domestic terrorists, Pennsylvania would be a war zone.

    There are no domestic terrorists. It is another Big Lie by the government.

    Sometimes I wonder if the conspiracy sites are correct when they say that adding flouride to the water creates a docile population. Or maybe it’s television. Or high-fructose corn syrup. Or the medications they take.

    Whatever the reason, the population is far too malleable and sheep-like. Where are the wolves among us who are on our side?

    1. Yojimbo

      The poor people in central PA have been bought off by the Natural gas companies along with the PA politicians.

  77. At a subsidized cost of $6.80 a gallon, that’s some damn cheap moonshine!

    Add spices, and repackage as Victory Gin. Give it away with all food stamp and unemployment benefit applications. Eliminate cirrhosis treatment from the AMA protocols (these alcoholic bastards deserve to die, right?).

    This will solve most of our demographic problems in a few years. Wouldn’t that be a more effective use of taxpayer dollars than burning it in our cars?

  78. It takes more energy to produce one gallon of ethanol than what it is worth, it takes two barrels of oil and more electricity than what it is worth, You should see Poet Energy Corp offices in Sioux Falls, they are not starving thanks to the Government…..

  79. Take a look at this claimed biofuel process:

    Apparently the microbes produce something close to diesel fuel. I have heard about this for at least 5 years. We will see if they are blowing smoke up someones asses to make a quick buck.

    I did the calculations from a feasibility standpoint. And if they produce 800 bbl oil per year per acre, this is 1 x 10^9 J/sq. meter/year. Here in Iowa, we get something like 5 x 10^10 J/sq. meter/year. So on an efficiency basis, it isn’t totally outlandish, especially if you are doing production in some place that gets better sunlight than we do. (And doesn’t get so cold to freeze the water.)

  80. ed

    i’m glad you found this site too

    i look forward to many friendly discussions with you

    don’t get your hopes up too high.

    everyone that hangs out here does not support paul.

  81. Smokey — I think you meant to say, “Not everyone who hangs out here support Pau;.”

    Your double negative makes it appear that NO ONE here supports Paul. Learn how to write goddammit. I have more important things to do than to correct your poor grammar.

  82. A sad history.

    During the Carter Administration I was General Sales Manager and Associate Director of the Foreign Agriculture Service. I held those positions from July, 1977 to January 1981. At that time, as it had been for many years, the US had huge over capacity in agriculture. The abundant supply of cheap land and abundant water, with lots of farm labor led to extremely low prices. During the Great Depression as consumer incomes declined and consumption fell there was a massive over production pushing farm prices below the cost of production. The Republican President Herbert Hoover, and later FDR argued that “others must be taxed so that farmers could be subsidized”. With over 60 percent of the population living on farms or in towns dependent on farmers, the political implications are obvious. The Hoover administration introduced the first farm subsidy program. A floor price of 80 cents per bushel of corn and 20 cents per pound of cotton was established. When prices fell below those levels the federal government would step in to buy the crop, store it and hope to sell it at a decent price. As time went by similar programs were introduced for sugar, milk and other commodities. But during most years abundant production has kept prices below whatever floor prices were set, often resulting in the US government owning large quantities of commodities. 

    The Food Stamp program was passed by the FDR administration in 1939 as a way to help feed starving Americans during the depression while getting rid of farm surpluses. 

    In 1954, with farm surpluses mounting, congress passed the Agricultural Trade Development and Assistance Act (known popularly as PL 480). The objective was to use the abundant agricultural productivity of the United States to combat hunger and malnutrition. and encourage economic development in the developing countries. It was essentially a giveaway program that helped get rid of huge farm surpluses while generating long term commercial demand as developing countries learned how to use those products to produce low cost chickens, pork and beef. Our work at Michigan State in Latin American countries had convinced me that PL 480 was a very effective to assist development. The General Sales Manager position was created to work closely with the State Department on PL 480 and, if necessary, use commercial loans to countries that did not qualify for PL 480 give aways. Commodity surpluses were at an all time high when, at age of 38, I arrived in DC to manage those programs. During my three and a half years I supervised a staff of 140 people disbursing billions to PL 480 recipient countries and providing over $3 billion in loan interest rate guarantees to countries that bought subsidized surplus commodities with as much as 3 years to repay. 

    However, farm surpluses were only slightly lower in January 1981 than they were when I arrived in 1977. Improvements in crop yields and economies of scale as farm sizes grew had lowered production costs and as a side effect created a mass exit of population from farms and small rural towns.

    After leaving the USDA to join a consulting firm in McLean, VA I was asked by the US Corn Growers Association, one of many farm lobby groups that I had worked with as General Sales Manager, contracted me to carry out a study of the feasibility of development of an ethanol subsidy program. I discovered early on that ethanol from corn was not economically viable. Basically it took more energy and costs to grow corn, process it into ethanol and distribute it to retailers than it could be sold for. Hence, the only way corn ethanol could be viable was with a US government subsidy. I explained that in my report; but I also noted that to alleviate the “knocking” prevalent in automobile engines tetraethyllead was blended with gasolines beginning in 1923. Some 50 years hence, and after substantial pollution of the environment by lead, alkyllead additives were phased out in a process that required another 15-20 years. But the chemical additive (MTBE) that had been developed to replace etraethyllead had a highly detrimental impact on the environment. Finally, I pointed out that a 10-15% addition of ethanol would alleviate knocking while reducing CO2 emissions. I recommended that the Corn Growers Association join lobbying efforts for subsidies that would make ethanol competitive with MTBE as an additive. 

    The process was already underway with passage of the Energy Tax Act of 1978, an attempt to solve two problems at once: our vulnerability to oil shortages and corn prices that had been depressed by our agricultural subsidies. In 1980, a punitive tariff of 50 cents per gallon was laid against ethanol imports (the rate today is 2.5 percent plus 54 cents). This and government sugar-price supports and tariffs guaranteed that American corn would be the only cost-effective feedstock for ethanol. Ethanol producers also became eligible in 1980 for government-guaranteed loans for up to 90 percent of their construction costs.The corn processing and grain exporting giant Archer Daniels Midland and similar companies, joined forces with the Corn Growers to get legislation passed. Government help was a windfall for ethanol: Production shot upward from 20 million gallons in 1979 to 750 million gallons by 1986. In 1990, a tax credit of ten cents per gallon was created for small-capacity ethanol producers.

    I had a role in helping create a monster, with subsidies to large corporations and corn growers that are causing huge distortions in the energy market. And once such subsidies are in place it is politically impossible to kill them because of the lobbying power and campaign contributions by vested interests that buy congressmen and senator support.   

    I was naive, thinking only of the short term and never considering such an outcome.

    1. Kelly

      Wow. That is a fascinating history of government involvement in the agricultural market. It seems to be a perfect example of unintended consequences. Every time government tries to solve a problem, they cause two more. Then they attempt to solve those problems and cause new ones. Ultimately the whole contraption will come crashing down. We are very close to that point.

  83. Kelly Harrison
    Great post. You have an intricate knowledge of the cause and effect of decisions and policies that, step by step over time, have indeed brought about this shadow of an economy. All the way back to the Great Depression right up into the oncoming one, that is quite a story.

    I hope you come back and post more often.
    And I hope you don’t mind us fellers cursing up a storm.


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