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May 12, 2008

Ethanol, Secular Theocracy, and the great Aorta.

Many years ago, we had a great libertarian guru in Australia by the name of John Singleton. I had the pleasure of attending a meeting where John was the guest of honor.

In his speech he referred to the great Australian aorta. I don’t recall the exact words but it was a send up of the tendency of people to want government to do things they wanted with the pronouncement “They orta.” This is still the way things are worldwide.

The fact is that the lifeblood of state expansionism passes through this vessel of our own making when we demand, they orta stop people saying …., they orta make a law to ……, they orta provide more ……, they orta encourage the use of biofuels. The list goes on, you know the drift.

I have dealt with the disaster in the making, of biofuels in previous posts but this is about the sort of thinking that creates state intervention and the elitist vision, which is dragging us down the road to collectivism. Take the following opinion piece from the NYT with the title, Rethinking Ethanol.

The time has come for Congress to rethink ethanol, an alternative fuel that has lately fallen from favor. Specifically, it is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.

This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases. ……….
OK, there is nothing unusual in this statement, you read this sort of thing every day without batting an eyelid or probably thinking about it too much. Yes the bloody government has got it all wrong again and we the elitists of the press are going to put them back on track with our ideas.

So, why did the state move to subsidize ethanol production and come up with the idea of mandating content levels in the first place? It was the same sort of thing as this, where the environmental movement the press and people who produced the raw materials and saw advantage for themselves, lobbied to get it, that’s why.

The result is that for a start there is a 51-cent per gallon subsidy on it in the US. This means that for every gallon blended into the fuel there, all people are taxed 51 cents plus the cost of collecting that tax plus the cost of administering the payment of that subsidy. Add to this that with the demand for corn increasing as a result the prices of all grain has gone up. In other words you are paying for this decision in many different ways, all at the same time.

Without subsidies and mandates there would probably be some sort of ethanol industry in the making, given the current oil price. There would not however be the current distortion of the market caused by government action.

The NYT do not want natural market forces to do their thing however, far from it. They want a realignment ……. . The direction of the use of alternatives to the current fuels are according to the NYT to be in their favored direction, that is, ethanol, no other.

We bitch about the advance of state interventionism, yet we never seem to realize that we ourselves are in part responsible for this. We rarely question this process at its origin, only in its results.

We are in the process allowing the elitists of think tanks, academia, lobbying and so on become the secular priests of the great religion of the government knows what is best for you, and it is as theocratic in its own right as Iran.

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