Ethanol Mandate: "Don't waste any more of our time or your time telling us it's a bad idea, because they're going to do it."

Ronald Bailey | July 29, 2008

Wind farmer T. Boone Pickens recounts for the Los Angeles Times a telling conversation he had years ago with then-Sen. Bob Dole (R-Kan.):

Back in 1996 when Bob Dole ran for president and I was his energy advisor, and he told me...on ethanol, he said, "Ethanol is, you say it's a bad fuel." I said, "Come on Bob, you spend more money making it than importing it." And he said, "Let me explain something to you about politics: There are 21 farm states, and that's 42 senators. Don't go any further." I'm getting the picture. I said, "They want ethanol." He said, "They're going to have ethanol." And so he said, "Don't waste any more of our time or your time telling us it's a bad idea, because they're going to do it."

Once again, bad policy and a taxpayer rip-off turns out to be good politics.

Addendum: Apparently Pickens believes that taxpayers and ratepayers should help him finance his gigantic $10 billion wind farm. Like the ethanol barons before him, Pickens has learned to love subsidies and corporate tax breaks as much as next tycoon. Ah, hypocrisy.

Comments

|7.29.08 @ 10:49AM|#

this is not new

Brett|7.29.08 @ 10:58AM|#

Google in all it's wisdom is displaying a FeedBack Advertisement for ethanol on this page. Apparently the concept of context never crossed their minds.

Anonymous Coward|7.29.08 @ 11:07AM|#

in all it's wisdom is displaying a FeedBack Advertisement for ethanol on this page. Apparently the concept of context never crossed their minds.

Be sure to click the link (just not more than once). :-P

thoreau|7.29.08 @ 11:11AM|#

If politics dictates that farm states get subsidies, well, OK, but can't we at least just decouple the subsidies from energy policy? Give Iowa however much money to do whatever, and meanwhile buy whatever fuel makes the most sense in an open market.

|7.29.08 @ 11:15AM|#

SGdsghfg: No it's not, but I think it's good to remind oneself occasionally that rent-seeking is at the heart of our politics.

|7.29.08 @ 11:27AM|#

that rent-seeking is at the heart of our politics

Fixed.

|7.29.08 @ 11:31AM|#

Cellulosic ethanol is the future. Corn ethanol is not. Japanese companies make it out of algae that re-grows in 24 hours. Coskata licenses this tech to them.

squarooticus|7.29.08 @ 11:32AM|#

Someone explain to me how to solve the problem of rent-seeking when the federal government has so much power over everything. I swear I will turn in my anarchist membership card if someone manages to convince me that it's even possible.

I personally would love to see more attention paid to the fledgling secession movements around the country. In the age of the long tail and with the waning power of the establishment media glorifying the every action of the feds, it's increasingly likely that such movements will gain traction. Secession is only kooky when you don't know anyone advocating it.

|7.29.08 @ 11:38AM|#

T. Boone Pickens, you are rent seeking scum.

Sully|7.29.08 @ 11:44AM|#

Squareooticus - "I personally would love to see more attention paid to the fledgling secession movements around the country"

We already have 50 state governments, or 57 if you believe Barack. We can't protect them from the centralizing impulse of the Feds despite the constitution. Face facts - the best we can do is slow the migration of power to the center. Secession movements are distracting carnival shows, as are the periodic constitutional amendment movements.

Nigel Watt|7.29.08 @ 11:50AM|#

Sully: What if I don't care what happens to the rest of the country? If there could be one free state, that's good enough to let the rest go to hell.

Colin|7.29.08 @ 12:00PM|#

The funny part of that Dole anecdote is that Dole was one of those corrupt farm senators.

squarooticus|7.29.08 @ 12:13PM|#

We already have 50 state governments, or 57 if you believe Barack. We can't protect them from the centralizing impulse of the Feds despite the constitution. Face facts - the best we can do is slow the migration of power to the center.

That is tantamount to admitting you've already lost. Pardon me if I don't think your words are exactly Patrick Henry-esque.

Within the rules of the existing system, power always flows upward, from the local level to the states and from the states to the feds. As a result, it seems pretty clear to me that trying to fix the system-by which I mean reversing the flow of power-within its own framework is a futile exercise, something even you seem to recognize. Why not act on that recognition, by which I mean advocating a solution that might actually get us real freedom?

IMO, the real carnival show is the attempt to play the same losing political games in the hopes that it will result in lasting liberty. (Recall what Einstein said: "The definition of insanity is doing the same thing over and over again and expecting different results.") Libertarians have been losing ground, steadily for the most part and in occasional fits, for 40 years. It's time to recognize that and move the fight away from Washington.

Nigel Watt|7.29.08 @ 12:14PM|#

squarooticus: Are you in NH yet?

|7.29.08 @ 12:18PM|#

Apparently Pickens believes that taxpayers and ratepayers should help him finance his gigantic $10 billion wind farm. Like the ethanol barons before him,

I'd love to see how liberal environmentalists respond to this one. Something they desperately want (wind farms/renewable energy) vs. corporate subsidies.

Something tells me it'll break the way of "since it's for the public good."

The New Revolution|7.29.08 @ 12:24PM|#

Pickens idea is both brilliant and utilitarian . . . not to mention far superior to the present energy regime. Investment of this kind will actually drive down prices, and eventually push government out of the market - sorry people, but sometimes you have to cede a little to gain alot. I'll take my small dose of government investment now if it means that we'll soon be (relatively) free of rent-seekers and the dark shadow of the Feds.

|7.29.08 @ 12:24PM|#

Libertarians have been losing ground, steadily for the most part and in occasional fits, for 40 years.

On what index is this based? you'll note I'm an angry optimist, so anytime I hear that "the world is going to hell in a handbasket because my worldview isn't dominant", I tend to get my hackles up.

Secession is only kooky when you don't know anyone advocating it.

They're going to secede and form...what, exactly? If they don't institute a government, one will inevitably be instituted for them.

What I've come to realize is that some people are always going to seek physical power over others. It's best to throw as many hamstrings and speedbumps and traps in the way of those people than it is trying to convert everyone to your way of thinking.

I believe in a mechanistic approach to restraining government, not an organic "convert the masses" one.

squarooticus|7.29.08 @ 12:30PM|#

Nigel: Not sure yet if NH will be my final location, but it will almost certainly be one of NH, VT, or ME. I am sticking around MA for about one more year, after which I'll be selling my house and moving. If I were renting, I'd already be gone... alas! I have no time to get my house into salable condition while I'm working full time.

I'm so sick of living here: traffic, assholes†, 12% capital gains taxes, Nanny-state annoyance, union corruption, "zomg!GUNZ!!", etc. It's too bad, because MA and Boston have so much good stuff, including great food, great beer, a striking amount of natural space, lots of amateur sports opportunities, cultural events, etc... but the one-party rule combined with wealthy apathy have made it a place the revolutionaries would have been ashamed of.

† Gotta love the guy screaming "Homo!" at other drivers last night at 11pm in bumper-to-bumper traffic on 93 because he wanted to merge in from the breakdown lane once he saw the cop lights ahead, but no one would let him in; I'd like to think a good shot with pepper spray as he was leaning out the window would have made him think twice the next time, but Boston seems to be a magnet for the incurable anti-social types.

Paul|7.29.08 @ 12:31PM|#

I'm with thoreau on this one. Let's just write them a cheque and take the ethanol issue out of the picture. The farmers can think of it as a gift card.

squarooticus|7.29.08 @ 12:40PM|#

On what index is this based?

It's based on squarooticus's "look at how much extra federal regulation there is on everything, from drugs to food to financial markets to medicine to transportation to education" scale. It's anecdotal, but I think you'd have a hard time convincing me otherwise.

I'll agree that there's a greater amount of social liberty, in the sense that gays can shack up in most places without finding a burning cross in their yard, blacks in general have the same opportunities as everyone else, and people can walk around NYC with seventeen nose rings and pasties over their nipples, but these are a result of local cultural shifts, not of the federal government loosening the shackles. The government at a national level is more meddlesome than it has ever been, and it gets strictly worse over time.

They're going to secede and form...what, exactly?

I thought this was evident from my post but... start small: just have one state government declare independence from the US.

Paul|7.29.08 @ 12:43PM|#

On what index is this based?

I dunno, AO, there are a lot of indexes which could show that libertarians have lost a lot of battles-- even most of them. The country is becoming more socially tolerant in certain niche areas-- areas where libertarians share vision with say, Democrats or rank and file liberals: Artistic speech, entertainment speech, gay rights etc.

But where Democrats and Libertarians part company, we ain't winnin' much. Free speech vis. political speech(!), illegal search, private property, wiretapping. Even the recent second amendment 'victory' was won on a razor thin margin (4 out 9 judges agree: it's not an individual right) with extremely vague parameters on what regulation a state or locale can impose on said 'individual right'. The War on Terror has been the greatest threat to liberty in my lifetime-- a tangible threat that actually has affected my daily life. No signs of abatement there.

Subsidies and state intervention in the economy is-- by my estimation-- at an all-time high. And the WoD is so firmly entrenched and applied to a wider and wider array of substances that it's my opinion that all we can do at this point is negotiate reasonable surrender terms. Maybe we can wrangle some limited reforms to it in the years to come.

Other than that, one could argue that we're on track for the big win.

|7.29.08 @ 12:52PM|#

one of NH, VT, or ME.

ME?!? ME might be pretty, but ME government is bloated beyond belief. ME has the 2nd highest state/local tax burden in the country, and has been 1 or 2 for over a decade (with the exception of one year when they dropped all the way to 3).

VT BTW is #1 two years running. Yay #1!

The whole Northeast is socialist hell. NH is succumbing. Stay away.

|7.29.08 @ 12:53PM|#

Maybe we should look at history and see how previous secession attempts have fared...

squarooticus|7.29.08 @ 1:00PM|#

The whole Northeast is socialist hell. NH is succumbing. Stay away.

If you're coming from MA, like I am, virtually anything is better. There are only 6 states I absolutely will not live in: MA (once I leave), NY, MD, IL, NJ, and CA. Everything else is a substantial step down on the tyranny scale.

Besides, at least the economics of the situation make New England the most likely region of the country to secede from the US during a prolonged economic downturn: they put the most into the Feds relative to what they get out.

Nowhere in the US, with the possible exception of Alaska, is going to be close to ideal. And I ain't moving to Alaska. We are unfortunately on an increasingly-crowded globe, so civilized areas that aren't ruled with an iron fist are getting a lot harder to come by. I'm trying to balance living my life with living my principles. I am open to places outside the NE, but I'm having a hard time believing other areas of the continental US that I'd actually want to live in are any better.

Can anyone speak to Washington (state)? Oregon? North Carolina?

squarooticus|7.29.08 @ 1:00PM|#

Maybe we should look at history and see how previous secession attempts have fared...

Maybe we should consider that lots of things are very different from 150 years ago.

|7.29.08 @ 1:17PM|#

Squarooticus-

I agree with your list. I would add all the other New England states as none of them are exactly freedom friendly. Yes, Rhode Island is a little better on the issues of small mj possession and hobbying.

|7.29.08 @ 1:19PM|#

squarooticus,

Different? Yes.

More advantageous to secession? No way. The armed forces are so far superior to any militia a seceding region or state could drum up, it's not even funny.

|7.29.08 @ 1:20PM|#

There are only 6 states I absolutely will not live in: MA (once I leave), NY, MD, IL, NJ, and CA. Everything else is a substantial step down on the tyranny scale.

Trust me when I tell you that Ohio will soon be on your list. We're trying really hard to show how "modern" we are by acting like that list of nanny-states up there.

Can anyone speak to Washington (state)? Oregon? North Carolina?

I'm not a North Carolinian, but my sense of the state is that it's relatively free. Perhaps you should try a big city in a red state somewhere (Atlanta? Birmingham?); it would combine social tolerance (maybe) with less regulations. AFAIK, most of the Old South hasn't seen fit to implement draconian smoking bans, for example.

Nigel Watt|7.29.08 @ 1:23PM|#

The NHLA there has pretty effectively put the state's machinery in neutral. Some more help and they'll be able to put it in R.

(I have to graduate before I get there - 2010.)

|7.29.08 @ 1:24PM|#

the economics of the situation make New England the most likely region of the country to secede from the US during a prolonged economic downturn: they put the most into the Feds relative to what they get out.

That's not the best measure. New England's economy is heavily dependent on being plugged into the US economy at large. I don't see the banking and insurance sectors being terribly thrilled about being cut off from most of their customers!

If you were going to have a secession, it would have to be an area that had a commodity to sell...think Alaska or Texas. But in all seriousness I think the secession train left long ago.

Alan|7.29.08 @ 1:26PM|#

So are tax breaks a form of subsidies or not? The Reason guys seem to be going back and forth on this. Tell me what to think already!

|7.29.08 @ 1:28PM|#

Newt Gingrich didn't call Dole the "tax collector for the welfare state" for nothing.

|7.29.08 @ 1:31PM|#

Ethanol just pisses me off on so many levels. I, perhaps foolishly, hope that this can be undone next year as the evidence of the fiscal insanity and environmental harm this corporate welfare entails becomes common knowledge.

Gilbert Martin|7.29.08 @ 1:33PM|#

"Pickens idea is both brilliant and utilitarian . . . not to mention far superior to the present energy regime. Investment of this kind will actually drive down prices, and eventually push government out of the market - sorry people, but sometimes you have to cede a little to gain alot. I'll take my small dose of government investment now if it means that we'll soon be (relatively) free of rent-seekers and the dark shadow of the Feds."

What the hell are you talking about?

None of the wind farms in this country would have ever been built without tax credits. They can't compete with fossil fuel energy even at current prices without them.

Ask the utility companies in Texas how "brilliant" the idea of wind power is. When he wind stopped blowing over a wide area there not long ago, it triggered an power grid emergency. They had to shut off power to a bunch of industrial customers to prevent blackouts. Wind power is highly variable and has to be backed up by some other power source. A lot of that is going to be fossil fuel.

We have plenty of coal reserves in this country and there is no legitimate reason not to continue using that for electricity instead of building more expensive and less reliable wind farms.

Russ 2000|7.29.08 @ 1:33PM|#

If politics dictates that farm states get subsidies, well, OK, but can't we at least just decouple the subsidies from energy policy?

I thought American politics was the art of joining as many unrelated concepts together as possible. Like internet gambling legislation tacked onto an Iraq War spending bill. Why do you hate America, thoreau?

Gilbert Martin|7.29.08 @ 1:35PM|#

"the economics of the situation make New England the most likely region of the country to secede from the US during a prolonged economic downturn: they put the most into the Feds relative to what they get out."

Are they going to create their own army, navy and air force for their own territorial defense?

I doubt it.

Russ 2000|7.29.08 @ 1:37PM|#

There are only 6 states I absolutely will not live in: MA (once I leave), NY, MD, IL, NJ, and CA.

How can PA and UT not be on your list? The silly alcohol laws alone!

squarooticus|7.29.08 @ 1:51PM|#

libertymike:

I agree with your list. I would add all the other New England states as none of them are exactly freedom friendly.

This goes against everything I've heard from people I know who've moved to NH. I don't honestly know a whole lot about VT or ME, meaning I need to educate myself... but I know a lot about NH and I like what I've seen so far.

Occam's toothbrush:

More advantageous to secession? No way. The armed forces are so far superior to any militia a seceding region or state could drum up, it's not even funny.

You're making the implicit assumption that secession would be followed by an invasion of said state. I don't think that is so clear-cut.

That's not the best measure. New England's economy is heavily dependent on being plugged into the US economy at large. I don't see the banking and insurance sectors being terribly thrilled about being cut off from most of their customers!

Now you're making the assumption that secession would result in something akin to trade sanctions. Again, I don't that is so clear-cut.

Optimist:

Trust me when I tell you that Ohio will soon be on your list.

I think OH is already on the same list with AL, MI, KY, WV, etc. in the sense that those places have nothing to offer me even if they aren't abhorrent from a philosophical standpoint.

Nigel Watt:

The NHLA there has pretty effectively put the state's machinery in neutral. Some more help and they'll be able to put it in R.

These are conservative R's or neo-con R's? The latter aren't helpful.

Gilbert Martin:

Are they going to create their own army, navy and air force for their own territorial defense?

Do they need one? Why is the militia insufficient for this purpose? Are they in danger of being overrun by Québécois barbarians? Maybe a great wall running from Bangor to Burlington would stem the tide.

Russ 2000:

How can PA and UT not be on your list? The silly alcohol laws alone!

My list is based on many factors, not simply a few anti-liberty laws. No state is ideal.

|7.29.08 @ 2:02PM|#

ID, WY, or MT top my list. But the wife would never go for it.

|7.29.08 @ 2:06PM|#

ID, WY, or MT top my list. But the wife would never go for it.

Wyoming and Montana are truly beautiful places if you can appreciate the wide-open spaces, and much of northern Idaho is densely forested and mountainous. But the winters are pretty harsh--and it would help to have a career that isn't location-specific.

|7.29.08 @ 2:20PM|#

Squarooticus-

You are right. I did not intend to include NH in my statement, "I would add all the other New England states.." as all the other necessarily excluded NH-given that NH had been mentioned by you.

However, I am sure that you may have heard about the corrosive influence Massachustts expatriates have had upon NH. It is real.

The New Revolution|7.29.08 @ 2:48PM|#

OHIO SUCKS . . . the only silver lining there is a possible partial repeal of the smoking ban that is on the ballot in November. Polls show overwhelming support, and it is likely to pass . . . it basically puts the power of banning smoking in restaurants in the hands of the owners and managers.

Nigel Watt|7.29.08 @ 2:51PM|#

These are conservative R's or neo-con R's? The latter aren't helpful.

They're libertarians, pretty much, and fairly radical ones.

|7.29.08 @ 3:00PM|#

I think OH is already on the same list with AL, MI, KY, WV, etc. in the sense that those places have nothing to offer me even if they aren't abhorrent from a philosophical standpoint.

Lumping those states all together makes about zero sense. Ohio is the eighth largest state in the nation; it doesn't even approach the "parochial" status of say, KY, WV or AL.

I know, I know, it's all hick flyover country...

|7.29.08 @ 3:14PM|#

squarooticus,

How many Americans patronize Canadian companies for banking and insurance? Not many. Cross-jurisdictional issues are a hassle for those types of things. New England service industries would suffer, trade sanctions or no.

I'm curious, though, in what you think the federal govt's response to a secession would be. We've already seen how hamhandedly they deal with state-level attempts to drop out of the federal marijuana regulatory regime, and that's nothing in comparison to full-blown secession, especially if it's of a state that pays a lot of federal taxes or has oil reserves.

Paul|7.29.08 @ 4:21PM|#

So are tax breaks a form of subsidies or not? The Reason guys seem to be going back and forth on this.

Depends on how you define "tax break". If a government says "Hey, we're dropping the sales tax back to 8.9%" that's a tax break which would not, by any stretch of the imagination be considered a subsidy.

But if a large private company whispers sweet nothings into the ear of the city council and mayor, and promises to build a large business complex-- but gee, if I could get my property taxes reduced-- that'd be greeeattt. Oooh, we can call the property and "economic improvement zone" or something."

That's a tax break and it's a subsidy.

Paul|7.29.08 @ 4:25PM|#

I'll take my small dose of government investment now if it means that we'll soon be (relatively) free of rent-seekers and the dark shadow of the Feds."

*rubbing temples*

You'll take a small dose of government investment, rent-seekers and the dark shadow of the Feds now, hoping you'll be rid of them later? What is this 'logic' of which you speak?

The New Revolution|7.29.08 @ 4:44PM|#

Here is the logic: the government already has control of energy in this country. They set the policies, they make the rules. It sucks, I hate it, but that's the reality ... now, accepting that reality, what is better: government power/dollars that is/are fundamentally misdirected and misspent? Or . . . investment in a plan that at least makes half a lick of sense, and that opens the door for the a smaller government presence in the future?
I will always take the latter, recognizing that such opportunities usually ocur once or twice a generation.
The last time this occured? Welfare Reform, 1996 . . . a reform which meets the criteria of the aformentioned better, and more logical choice.

The New Revolution|7.29.08 @ 4:47PM|#

* new and improved, corrected the hideous typos*
Here is the logic: the government already has control of energy in this country. They set the policies, they make the rules. It sucks, I hate it, but that's the reality ... now, accepting that reality, what is better: government power/dollars that is/are fundamentally misdirected and misspent? Or . . . investment in a plan that at least makes half a lick of sense, and that opens the door for a smaller government presence in the future?
I will always take the latter, recognizing that such opportunities usually occur once or twice a generation.
The last time this occured? Welfare Reform, 1996 . . . a reform which meets the criteria of the aformentioned better, and more logical choice.

|7.29.08 @ 5:37PM|#

>>Maybe we should look at history and see how previous secession attempts have fared...

umm. by my count, you're at 1 for 2 if you live in the south (for a 50% success rate). if you live in the north, you're only at 1 for 1 (100%)! so why would you find those numbers discouraging? IMO, some of us seem to be undefeated at secession attempts and none of us are without a win...

Just Sayin\'|7.29.08 @ 6:03PM|#

"if you live in the north, you're only at 1 for 1 (100%)!

Mr. Shay and various Western Pennsylvanian distillers may disagree.

|7.29.08 @ 7:17PM|#

There's a difference between attempting to secede from a government that's 3000 miles away in the 1700s, and doing it with a govt on the same continent in the 2000s.