Knowledge Problem asks: Is the energy bill really a farm bill?
Because that's what it looks like to me. And to Jim Lucier of Prudential Securities, who took the words right out of my mouth on Tuesday's Kudlow & Company. In all of the commentary and analysis that I have read, very few people believe that this bill will do anything constructive to remove obstacles to competitive electricity markets, reduce our overall energy consumption, or provide valuable direction to energy technology research. Its most noticeable provision amounts to little more than a farm subsidy under a different name. From a recent Reuters article:
To stretch America's gasoline supplies, the leaders of a joint Senate-House conference committee racing to finish a U.S. energy bill agreed on Monday to almost double production of the motor fuel additive ethanol to 7.5 billion gallons a year by 2012. ...
The ethanol compromise is larger than the 5 billion gallons approved by the U.S. House of Representatives, but smaller than the 8 billion gallons called for by the Senate.
Ethanol, derived mostly from corn, is a popular political cause in farm country, where it is regarded as a homegrown answer to oil imports and a boon to farm income.
During the presidential primary elections on the West Wing this past season they made it very clear, very clear, that ethanol subsidies were a stupid idea. Jimmy Smits, as Representative Matt Santos (D), only went along to win votes. Here is how it went down:
Josh has more trouble with Santos and his wife both of whom have serious concerns about the ethanol subsidy. Mrs. Santos, mentions, "Ethanol is subsidized to the tune of what a billion dollars a year, Josh?" Later she turns to her husband and says, "...Honey, a billion dollars a year to make a gasoline additive?"
Still later Santos tells Josh, "You know, Helen's not wrong about ethanol.... It's bad for the environment, its expensive. Mother of all panders.... Transportation is difficult. Storage is a nightmare.... It's corporate welfare.... Seventy-five percent of the money goes to the richest 10% of American farmers...."
"Yeah, well explain it to them after someone's actually elected us to something, okay?" "...You're trying to steer me to middle of the road positions.... and supporting ethanol's a mistake." Santos fights against this support right up to when he goes to the stage and at the last minute he allows himself to be persuaded by Josh.
The Republican canditate (Sen. Vinick (R), played by Alan Alda) then trashes ethanol in his Iowa speech: a good move but it won't win votes.
Representative West Wing viewer: [Sigh] "If only Matt Santos and Arnold Vinick were real" [sniff, a tear, then s/he starts crying like a baby and/or curls into a fetal ball].
