19 December 2008

Bailout Banditos

Kevin Drum asks "what harm does it do to try" to stimulate our way out of the economic doldrums? I reply that every idiot with a lobbyist will claim that they need to be stimulated [sic] with OUR money.

In an normal world of competent government, idiots would go the way of the dodo, but a BIG FAT $5 trillion teat has a way of keeping stupid ideas alive long after their natural lifespan.

For example, the Renewable Fuels We Should All Drink Ethanol! Association (WSADEA rhymes with "cool aide") is asking* for MORE government support, i.e.,
The association told the transition team that it wants — among other things — an immediate $1 billion to finance current operations and avoid layoffs and a $50 billion federal loan guarantee program to build new conversion facilities and pipelines.

But Craig Cox, the Midwest vice president of the Environmental Working Group, said, “It’s utterly irresponsible to continue to expand this conventional biofuels industry,” when ethanol may well increase greenhouse gas emissions through greater land use and nitrogen and phosphorous pollution.

[snip]

In response, the ethanol association released a statement that said, “Some have misconstrued” the industry’s ideas for a stimulus “as a request for federal assistance or a bailout. To the contrary, the RFA recognizes that by stimulating increased production, innovation, and investment in new technologies and cellulosic feedstocks, a revitalized renewable fuels industry can help bail out the flagging U.S. economy and lessen America’s dependence on foreign oil.”
I don't know about you, but loan guarantees and "stabilization funds" (to help with losses resulting form speculating that corn futures would rise in price) sure look like subsidies to me. (But wait! green jobs, investment, innovation! -- oh STFU already...)

Next week, I'll give a longer update on that man-made disaster, the worst (?) agricultural program ever, that weapon of mass-destruction, the ethanol program.

Bottom Line: I hate to blog on stupid, harmful, dangerous, destructive ideas, but "how to make a better chocolate chip cookie" hardly inspires me the same way that political corruption, bad science and hackneyed economics does. (Something to be thankful for -- in a perverse way.)

hattip to JWT and the anti-ethanol lobby

* Excerpt from the Congressional Quarterly, which does not understand how to post on the InterTubes.

ps: The Bailout Explained

Young Chuck in Montana bought a horse from a farmer for $100.

The farmer agreed to deliver the horse the next day.

The next day he drove up and said, "Sorry son, but I have some bad news, the horse died."

Chuck replied, "Well, then just give me my money back."

The farmer said, "Can't do that. I went and spent it already"

Chuck said, "Ok, then, just bring me the dead horse."

The farmer asked, "What ya gonna do with him?

Chuck said, "I'm going to raffle him off."

The farmer said, "You can't raffle off a dead horse!"

Chuck said, "Sure I can, Watch me. I just won't tell any body he's dead."

A month later, the farmer met up with Chuck and asked, "What happened with that dead horse?"

Chuck said, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998 $898."

The farmer said, "Didn't anyone complain?"

Chuck said, "Just the guy who won. So I gave him his two dollars back."

Chuck grew up and works now for the government. He was the one who figured out how to "bail us out".

1 comment:

Michael said...

Chuck was a hedge-fund manager before he worked for the government.