Mar 14, 2012

Why we're broke (or) Is that a corn cob in your pocket or are you just glad to see me?

Things are popping down in Emmetsburg, one of the few places in the country with a statue of Robert Emmet on the court house lawn. The governor was there yesterday to, so help me, assist in announcing that there would be a groundbreaking for a cob plant.

It's a POET project, and we're not talking e.e. cummings here. By its own admission, POET doesn't really stand for anything.  The huge ethanol company concedes it's just designed to conjure up beautiful thoughts about  clean, renewable energy made from corn squeezings and, now,  stover -- the stalks and cobs.

Agribusiness has done well, mostly courtesy of taxpayer subsidies, in turning one of our basic food stocks, corn, into a marginal motor fuel. Of course that comes with a cost, and if you've priced a pound of low-grade hamburger lately you know  what we're talking about. (Assuming the awareness that cows eat corn.)

It finally dawned on us proletarians -- and later on our political masters --  that there might be a conflict  between burning corn in our gas tanks and being able to afford corn flakes. Maybe less corn for cattle meant fewer cows, and that might make them more expensive. Same with pigs. Same for Coke sweeteners. Damn, how can a guy get a hundred bucks worth of food into one little plastic bag?

So the agribusiness fellows decided to oil the water. They would use the stover -- the semi-waste in the corn field --  to create fuel. It isn't very efficient, but, what the Hell,  with the right lobbyists and a crack public relations consultant we can lay off the risk on the suckers.


It isn't hard to understand why the governor was there, or why POET distilleries across the Heartland have drawn visits from presidents. The industry is heavily a political creature of Washington and of state capitols. It is a darling of so-called conservative Republicans, and rural Democrats, aided and abetted by the icky-poo-oil haters, the Greens who consider a tank of gasoline felonious.

I wish it were easier to dig out the actual total of taxpayer forkovers for this little project in my neighborhood. The immediately apparent subsidies total $125 million -- $20 million from the state and a $105 million loan guarantee from the feds. There is undoubtedly much more, ranging from other lightly reported direct handouts to the amorphous cost of mandated ethanol in your Chevy.


But, Jim,  don't you think we must invest in clean energy, get independent of the greedy Arab sheiks and their buddy Chavez, prepare for the day when there is no more oil?

Sure. All of the above. But you're faking it with the word "invest."  You mean "extort."  You're nicking every taxpaying manjack in the country to support a handful of ethanol speculators. It it were an investment the ethanol barons would sit down with private investors and make their case. If the private parties bought the idea, they would front the  money. That would be an investment.

Besides, not to put too fine a point on it, we're already broke.


Nevertheless, the deal is done and Emmetsburg and its outlying growers will benefit. Millions of dollars in checks will be cashed at local banks, and the check will be signed by POET.

All we can do now is hope that there's a glimmer of understanding down there that the real power behind the company check is a sweating Ben Bernanke, hunched over the mimeograph machine with the green ink, cranking out C-Notes for all he's worth.


May I be permitted one final word? Thank you.



SpeakerTweaker said...

I swear, reading this blog sometimes is like catching up over a cuppa coffee with that guy that no one really knows personally, but everyone nonetheless respects imminently and listens to intently. I ever make my way through corn country, I'm dropping you a line.

Another great post, well on its way to being shared.


johnmxl said...

You know how a farmer doubles his farm income?

He puts up another mailbox.

I've heard of several alcohol plants shutting down because corn prices are too high. In some cases the communities in which the plants are located offered tax incentives to get the plants, so now they are out the income of the employees' wages AND the revenue the plants would have generated.

Funny how these plants are folding at about the same time the incentives are scheduled to expire.

Purely coincidental, though, I'm sure.

Jim said...

Thank you Tweaker. I am flattered -- and appreciative of the share.


The double mailbox is itself an economic stimulus, John. There's purchase of the box itself, the post, the auger, miscellaneous attaching hardware, and, most important, the quick-growing shades trees so Klem doesn't get sunburned sitting on the lawn chair, waiting for the RFD guy with the green checks from Uncle.