Ummm, Illinois Profit?

I had blogged before about the socialist, Carol Browning, who had discriminated against her employees as the head of the EPA. Yet, the appointee will be the new coordinator of energy policies in the U.S. Before we go too far astray I have to wonder why she would get this appointment. One aspect to consider is to grasp how much of a benefit that the corn producing states, such as Illinois, stand to gain from an increase in using ethanol. The short answer is a great deal. This is a move that they were savvy enough to move on once it became clear that oil flow to the U.S. was in jeopardy.

Corn belt states began subsidizing ethanol after the Arab oil embargo of 1973. The federal government advocated its use a few years later. The Energy Tax Act of 1978 authorized an excise tax exemption for biofuels, chiefly gasohol (a gasoline blend containing at least 10 percent ethanol). Another federal program provided loan guarantees for the construction of ethanol plants, and in 1986 the U.S. even gave ethanol producers free corn. It's estimated that the excise exemption alone costs U.S. taxpayers as much as $1.4 billion per year.

The immediate beneficiaries of ethanol subsidies have been corn farmers and, more significantly, the Archer Daniels Midland Corporation of Decatur, Illinois, better known as ADM. The world's largest grain processor, ADM produces 40 percent of the ethanol used to make gasohol. As might be supposed, the company and its officers have been eloquent in their defense of ethanol and generous in contributing to both political parties. The politicians have been in return. The libertarian Cato Institute estimates that every dollar of ADM's ethanol profit costs taxpayers 30 bucks.

The circle is complete. The corn growers stand to profit from the increased demand for ethanol and minions are needed to implement the plans of big business. Obama will enter now.