July 22, 2011

Veto by Nixon Secures Transparency of MO Government

Early in July, amidst a much cooler climate, Gov. Jay Nixon vetoed a measure that sought to limit the openness and transparency of public and governmental entities.

Specifically, the vetoed legislation aimed to shelter public entities from disclosing minutes, votes, and records; it also allowed for closed meetings.

Without public access to important information — whether it is school district board minutes or the budget of fire protection districts — injustices may go unnoticed and our public officials may be tempted to act in unethical and elusive ways.

Take, for example, a recent embezzlement scandal in Brentwood. As Chad Carson reported, the city administrator of the suburban municipality was found to have stolen nearly $30,000 of city funds. That money, largely from tax receipts, was thrown away at a riverboat casino. Increased government accountability is the only effective solution Missouri citizens have to prevent such abuses in the future.

It is improbable to assume that the general public will suddenly besiege public entities with information requests — commonly known as Sunshine Law Requests. Therefore, the protection of this right is critical to policy analysts and journalists statewide who, in their endeavor for truth, rely on accountability. After all, your government cannot be accountable without transparency.

We often chastise our elected officials’ performance — ironic, since we elect them. However, when they strive to bolster the sense of public duty, as Gov. Nixon illustrated here, some praise and an attaboy are due.

So now, even as the mercury seems to higher and higher each day, Missourians can feel good about greater openness, transparency, and accountability in government.

June 23, 2011

Do You Take Sugar With Your Ethanol?

Brazil: A land entailing natural wonders, a powerhouse economy, and sugar cane ethanol? Yes, that’s right. Ranked second in terms of production and first for exporting, Brazil has long been a pivotal mover and shaker in the global ethanol industry.

Together with the United States, Brazil produces nearly 88 percent of the world’s ethanol supply. However, Brazil uses sugar cane as a preferred alternative to corn in its ethanol production.

With an annual yield of nearly 370 million bushels of corn, many Missourians are deeply connected to the corn-based ethanol industry. If the industry were to dry up, thousands stand to suffer in the short run. Even so, could there be a sweeter alternative?

Well, quite literally, yes. The Brazilian sugar cane industry is said to be seven times more efficient than that of the United States, and less expensive, too — nearly 30 percent cheaper, in fact. Regardless, it appears that the federal government has little interest in the more viable Brazilian blend.

In order to offset a federal tax credit targeted to ethanol blending companies, the United States has levied a tariff on Brazil’s ethanol, perhaps as a way to keep the international market out while spurring on its own domestic product.

Current and past administrations have vowed to reduce foreign oil imports, claiming that we have become too dependent on them. So, why a virtual ban on Brazilian imports? If ethanol is federally promoted as a solution to the so-called national security issue of dependence on Middle Eastern oil, why wouldn’t cheap, clean-burning ethanol from friendly Brazil be satisfactory? If officials are serious in addressing this as a national security issue, they would invest in other forms of energy — namely, those which are not harmful to our country’s environment and well-being.

Thankfully, it appears that lawmakers might be making a move in a better direction. Last week, Sen. Tom Coburn (R-Okla.) fathered an amendment that would slash government subsidies of the corn industry while also lifting the tariff. Unfortunately, Coburn’s amendments may never become actual laws. Nonetheless, the Senate has shown an ever-increasing readiness to bring ethanol subsidies to the curb.

So, is investing in the precarious, ever-expanding corn-based ethanol industry worth the higher food prices, loss of necessary agricultural groundwater, and increased pollution that result? Well, some would argue that the aforementioned are a small price to pay to support an industry. I contend the contrary. Surrounding Missouri’s ethanol industry, we have corn farmers benefiting from subsidies, cattle farmers suffering from feed shortages, and mandates that often require we burn at least 10 percent less-fuel-efficient ethanol in our cars.

When subsidies are involved, benefits for some lead to costs for others. So, who’s right? You be the judge.

June 8, 2011

New Ethanol Mandates From Washington

My father founded and ran several area gas stations until his death. At first, he embraced the use of oil and gas mandates like those that regulate the ethanol industry — he saw ethanol as a possible revenue stream. However, optimism dwindled as each fall’s harvest brought bushels of despair, not what others had promised. He would one day realize the strife that comes with perverse government regulations.

Many have regarded ethanol to be the proverbial “fuel of the future,” claiming that it reduces the cost of gasoline at the pump while also emitting less pollution. Although ethanol can replace gasoline in some ways, it is less beneficial than many expect.

The Department of Energy began releasing data in 1997 determining that some of the benefits derived from ethanol don’t outweigh the costs, as researchers had previously believed. Ethanol may emit less pollution when burned in place of gasoline, but the Environmental Protection Agency reports that it releases carcinogens at far higher levels than they predicted when it’s created.

Despite the abundance of new testimonies and information, however, both the federal and state government continue to support ethanol ardently, as our country’s energy messiah.

Pointing to often-circulated claims of environmental friendliness and cost-effectiveness, Rep. John Shimkus from Illinois recently introduced new legislation that would impose further government mandates for the production of ethanol. Amid another distressing year for Detroit, this governmental decree would require that 50 percent of all new automobiles be capable of running on ethanol and other non-petroleum fuels by 2014. That number would stiffly rise to 95 percent just three years later.

So, do the advantages of ethanol outweigh the costs? The answer, simply, is no. Aside from its counterproductive environmental effects and proven efficiency loss for each mile to the gallon, ethanol is a precarious investment for the government to force on us for several reasons:

  • First, it has been shown that increases in ethanol production are correlated with an increase in food prices. These effects can be felt not only statewide, but also nationally and internationally.
  • Second, and as a direct result of government mandates, a cloud of pseudo–market demand now hangs heavily above the heartland. Simply put, the current supply/demand ratio did not arise naturally from the decisions of producers and consumers, interacting voluntarily in the market. Instead, the ethanol industry is artificially bolstered by government sanctions.
  • Finally, both this mandate and others like it point to the essence of how government controls harm the economy. There are too many hands in the cookie jar, and, as a result, everyone’s hand gets stuck; the cookie crumbles. Automakers should not be burdened with absurd requirements such as this from legislators who seek to alter the free market for the sole benefit of their constituents, and at the expense of everyone else.

Don’t get me wrong, I support the development of renewable energies and green solutions. Markets reward efficiency. However, as both a Missouri resident and an owner of my father’s businesses, I find that legislation like our own E-10 mandate and the proposal advanced by Rep. Shimkus in Illinois are harmful — especially in the long run.

Neither supply nor demand would exist at anywhere near current levels without both federal and state mandates, both of which have propelled ethanol into the forefront of the American auto and oil industries. As it stands, the eagerly pushed supply of ethanol more than satisfies current market demand. And that, folks, is just basic economic principle.

A project of the

 


Download the Show-Me Institute's iphone app. Download the Show-Me Institute's android app. Sign up for the Show-Me Institute's RSS feed
Follow the Show-Me Institute on Facebook Follow the Show-Me Institute on Twitter Watch the Show-Me Institute on YouTube

The views expressed by each contributor to this blog are those of that contributor alone, and do not necessarily represent the views of the Show-Me Institute.

Welcome to the official blog of the Show-Me Institute. Here you'll find daily commentary by Show-Me Institute staff and scholars.



Recent Posts

View a random entry.

Archives

Categories

Links

Missouri

Free Market

Sister Organizations

Powered by Wordpress