WSJ rips Gingrich for defending ethanol subsidies

posted at 3:35 pm on January 31, 2011 by Ed Morrissey

Newt Gingrich has been touring Iowa lately, attempting to generate interest in a run for the 2012 GOP presidential nomination, and he’s been going the traditional route of defending farm subsidies, especially for ethanol.  Gingrich blasted the media for its skeptical approach to ethanol subsidies, especially the Wall Street Journal, saying that “big urban newspapers want to kill it because it’s working,” and then questioned the WSJ’s values.  The editors have responded in an unsigned editorial titled “Professor Cornpone,” and they give Gingrich both barrels:

Here’s how he put in Des Moines, with that special Gingrich nuance: “The morning that I see the folks who are worried about ‘food versus fuel’ worry about the cost of diesel fuel, worry about the cost of commodities on the world market, worry about the inflation the Federal Reserve is building into our system, all of which is going to show up as higher prices, worry about the inefficiencies of big corporations that manufacture and process food products—the morning they do that, I’ll take them seriously.”

The morning Mr. Gingrich read the offending editorial, if he did, he must have overlooked the part about precisely those concerns. He must have also missed our editorial last month raising the possibility that easy money was contributing to another asset bubble in the Farm Belt, especially in land prices. For that matter, he must have missed the dozens of pieces we’ve run in recent years critiquing Fed monetary policy.

Of course, the ethanol boom isn’t due to the misallocation of resources that always stalks inflation. It is the result of decades of deliberate industrial policy, as Mr. Gingrich well knows. In 1998, then Ways and Means Chairman Bill Archer tried to kill ethanol’s subsidies for good, only to land in the wet cement that Speaker Gingrich had poured.

Yet today this now-mature industry enjoys far more than cash handouts, including tariffs on foreign competitors and a mandate to buy its product. Supporters are always inventing new reasons for these dispensations, like carbon benefits (nonexistent, according to the greens and most scientific evidence) and replacing foreign oil (imports are up). An historian of Mr. Gingrich’s distinction surely knows all that.

The WSJ then accuses Gingrich of pandering, but says the problem goes deeper than just check-box politics in Iowa.  If Gingrich seriously thinks that the subsidies for ethanol really are working to do anything more than distort markets and put politics above science, then the Journal argues that his judgment is seriously lacking.  Ethanol gets lower gas mileage, thanks to its lower energy potential, which is one of the reasons that consumers haven’t bought flex-fuel vehicles.  As Jazz Shaw noted earlier, ethanol in higher percentages tends to damage engines not specifically built for the fuel, but this kind of pandering means we’ll all have to deal with those consequences by government fiat.

We have an opportunity to reform government, perhaps the greatest such political opening in almost a century.  Farm subsidies in general have to be on the table, but that’s especially true for ethanol and corn in particular.  Ethanol has simply proven to be too costly, too difficult to transport, and not an effective enough substitute for gasoline to be practical or cost-effective.  Subsidies only hide that fact from consumers at the gas pumps and the showrooms, but the cost to taxpayers for the years of subsidies demonstrate the decades-long failure.  Even Al Gore admits ethanol is a bust, for Pete’s sake.

Republicans don’t need a presidential candidate who wants to conduct business as usual by buying farm votes with promises of our money.  We need a candidate who recognizes the historical moment for change, rather than the opportunity to sell more of the same.


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The old ways do not work any more Newt. You can polish it, smooth it, scream it and it’s still BS. We have seen decades of this stuff in magazines, TV, newspapers and radio and all of it edited to the hilt. We see the TV interviews with rehearsed, scripted, sorted out before the cameras roll, interviews. Soft questions an eighth grader could answer with a discussion of what was said afterwards. Anyone with an analytical mind would wonder why do I need this explanation for something I just watched? This is true for all the politicians of both parties. They and you, Newt, still don’t get it. There’s more recorded video and audio out there than you can count and most of it was recorded in unguarded moments, unedited, that sums it up pretty good.

mixplix on January 31, 2011 at 7:14 PM

Your a has-been,

Mr. Gingrich,

You’re a cursed infected blood clot,

You smell like maple syrup, and you’re covered up with spots,

Mr. Giiiiiiiiinnngrich!!

If I were to take a wild guess, when your parents were pregnant with you they….

smoked a lot of POT!!!!!

cableguy615 on January 31, 2011 at 7:35 PM

Gingrinch loves him sum Big Gubmint!

Spare us and Please don’t run for any office Newt. Go away. That is all.

maineconservative on January 31, 2011 at 7:42 PM

Amen! About time WSJ called out the pandering Newt.

Newt: Go back to the couch with Nancy.

aigle on January 31, 2011 at 7:49 PM

Ethanol is a bad idea if made with such a high quality food source such as corn. We need to develop other biomass methods for ethanol like Brazil: cane, sorghum, algae, etc. The price of food will fall, and also the price of gas. We don’t need to keep subsidizing corn growers with money we don’t have. Stop spending money. Cut it out. All of it. Stop spending now!

Dandapani on January 31, 2011 at 8:29 PM

Republicans don’t need a presidential candidate who wants to conduct business as usual by buying farm votes with promises of our money. We need a candidate who recognizes the historical moment for change, rather than the opportunity to sell more of the same.

The smartest thing Ross Perot ever said was that if someone’s wife can’t trust him, how can the country?

itsnotaboutme on January 31, 2011 at 8:30 PM

Few of us are immune from creeping Liberalism. It’s become part of our national DNA over the last 100 years.

A 100% true Conservative sounds antiquated, nasty, selfish, and out of touch even to other (lesser) Conservatives. I can only imagine a time when what I just described was actually part and parcel of being an American-and not really selfish at all but generous and helpful-by choice, not by the Federal Government mandating our actions, and micro-managing every conceivable resource and economic venture…ah heck, even social ventures come to think of it.

Fortunately I’m Conservative enough that the mere word “subsidy” really pi$$es me off.

Dr. ZhivBlago on January 31, 2011 at 8:40 PM

I long ago stopped taking Newt seriously. All politician, all the time.

pugwriter on January 31, 2011 at 11:02 PM

Gingrich sucks. He doesn’t deserve anyone’s attention.

woodNfish on January 31, 2011 at 11:42 PM

If Gingrich actually believes in Ethanol Subsidies, he just moved to the bottom of my list of Presidential hopefuls. Ethanol is a really stupid idea that could only work with politicians like Gingrich running the show.

bflat879 on January 31, 2011 at 11:45 PM

Dear Newt,

Give it up. You can’t mandate technological advances (well, you can, but you’ll be about as successful as predicting the end of the world). It’s not the business of the government to (try to) pick winners and losers – the market is where the winners will be decided.

dissent555 on February 1, 2011 at 12:27 AM

E15 adds 15% to the cost of a gallon of fuel, while reducing mileage, adding maintenance costs, and increasing the cost of food.

This is government stupidity at its worst.

Good solutions to real problems don’t need subsidies!!!

landlines on February 1, 2011 at 2:48 AM

This shows the short sightedness of Ed M. and the WSJ. The higher prices for corn / grain brought on by the Corn Eth Program have translated into large amounts of foreign currency flowing back into the US economy. What a switch!! We desperately need that. Addionally, the higher prices are luring the entrepreneur back to the land and that will mean more food production which will be needed as the world population will rise to 7 billion within the next couple of years. We must applaud our US farmers and the work they are doing and they should be paid well for it. DD

Darvin Dowdy on February 1, 2011 at 8:28 AM

The higher prices for corn / grain brought on by the Corn Eth Program have translated into large amounts of foreign currency flowing back into the US economy. What a switch!! We desperately need that. Addionally, the higher prices are luring the entrepreneur back to the land and that will mean more food production which will be needed as the world population will rise to 7 billion within the next couple of years. We must applaud our US farmers and the work they are doing and they should be paid well for it. DD

Darvin Dowdy on February 1, 2011 at 8:28 AM

This would be great if true….but absolutely NONE of this is true.

1. Ethanol is a poor, unsustainable fuel

2. Ethanol increases our dependence upon foreign oil, and thus increases our trade deficit.

3. Ethanol is not made from corn and farmers’ sweat: it is made from government mandates and a taxpayer subsidy.

Ethanol is pure liberal fantasy. It is counter-productive for the environment, for the budget, for jobs, for food prices, for energy, and for trade.

landlines on February 1, 2011 at 9:37 AM

It will be an eye opener to see which “Conservatives” preach this same BS when they campaign in Iowa just like Algore did in 2000. I am sad to say that anyone who has been in polotics as long as Newt has is a pragmatist and will say and do almost anything to get elected. They haven’t seen the transformation that the Tea Party has brought. The days of lying to get elected and then doing what you really wanted all along are over!

inspectorudy on February 1, 2011 at 10:24 AM

Killing off the ethanol subsidies (which only seem to benefit the large ethanol producers such as ADM and Cargill) should be one of the top priorities of the Republican House. Diverting corn into ethanol drives up the cost of animal feed and food in general and is simply BAD BAD BAD policy.

Any Republican who is for ethanol will not get my vote in 2012.

Old Fritz on February 1, 2011 at 10:53 AM

Newt is NOT going to get elected POTUS! He has too much excess baggage hanging around his RINO neck. He needs to quietly fade away into the sunset.

belad on February 1, 2011 at 1:29 PM

And I used to think Al Gore was the dumbest politician on the planet.

TomLawler on February 1, 2011 at 4:21 PM

The epitome of “politics-as-usual”, bribing Iowa primary voters by offering them gubmint money

Raisedbywolves on February 1, 2011 at 5:04 PM

Paying for corn to be grown to be added to gasoline from a guy who looks like he doesn’t miss too many meals should get both barrels from the wsj. Both barrels? Would that be gun barrels or corn whiskey barrels?

Kissmygrits on February 1, 2011 at 5:27 PM

No food for oil.

EconomicNeocon on February 1, 2011 at 9:04 PM

Landlines: we need the influx/increase in foreign currency that the Corn Eth Program has brought us more than we need for folks like you to be proven right. Certainly there are plenty of negatives but US farmers are now operating in the black. The US is the largest exporter of Corn/Grains in the world. One of the last things we export and actually make $$ at. Our economy needs that cash desperately right now. Its a no brainer. Additionally, McCain the GOP dis’d the farmers in 08 (by opposing the corn eth program) and lost the farm vote almost in its entirety. That was a stupid move on their part. Will we make a dumb move like that in 2012? This is one of the few smart moves Newt has made in a long while. There may still be hope for him but I doubt it. DD

Darvin Dowdy on February 1, 2011 at 10:43 PM

Interesting to read all the garbage on this thread from people repeating half-truths to no truths at all.

The alcohol subsidy go to the fuel blenders, not the farmers. They are the same companies that a huge portion of our defense dollars protect the feedstock (oil) in the middle east.

Yes, alcohol does have less energy per gallon, but at the same time provides a car fuel with a higher octane. The dumb thing is flex-fuel engine, because if run at a higher compression ratio, you get better fuel mileage. So an engine set-up properly for alcohol will get about the same mileage as one set for gas because of the higher operational efficiency of the alcohol engine.

When making alcohol from corn, you are still left with all the protein of the original corn. Only the carbohydrates are consumed in the production of alcohol. Because of this, you are left with 18 lbs. of high quality protein feed instead of the 56 lbs of corn (which also contains around 8 lbs of water per bu.) In the world, there is a huge shortage of protein, but carbohydrates abound in grasses. So it is quite cost effective to ship dried distillers grain to places in the world where they need animal feed. Wet distillers grain is used locally to feed cattle here.

There has been a misinformation campaign by food companies domestically to blame high corn prices for the sharp increases in food prices. That happen over three years ago, but when corn prices were down a year or two before the latest run up, food prices did not come down. Farmers and the alcohol industry were made the “fall guys”. Today, a bushel of corn brought $6 for 56 pounds to the farmer. Buy a pound of corn flakes and you may pay $4, but they are great! Making corn flakes is about the easiest industrial process there is, a local feed yard makes them by the ton to feed cattle.

It takes very little liquid fuel to produce corn. Most of the energy used in the production of fertilizer, running irrigation wells, and processing alcohol is from natural gas, which is a very abundant fuel and pretty much unusable as a automotive fuel unless you want to change trillions of dollars of infrastructure that supports the liquid fueled transportation system.

Highplains on February 2, 2011 at 9:20 PM

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