The Ethanol Papers - Paperturn manuscript - Flipbook - Page 398
February 5, 2016
REPLY FROM BARRY RITHOLTZ
Sir:
I just finished reading your response to my column "Enough With Ethanol."
My only wish is that YOU had read the column and responded to what I
wrote. Instead, you responded to what others have been saying about
Ethanol. It appeared you misread or misunderstood what I put on paper.
First, I wondered "why we still subsidize turning food into an inefficient
fossil-fuel substitute." I did not say we had tax subsidies; The word has a
very precise meaning - the dictionary definition of the word "subsidize" is:
Verb to purchase the assistance of by payment of a subsidy; to aid
or promote (as a private enterprise) with public money or efforts
We have "subsidized" Corn Ethanol with direct tax subsidies through
2011; we have also subsidized ethanol by mandating the usage of ethanol through the Renewable Fuel Standard requirements.
This is not the free market at work, but rather an EPA decree that requires
retailers blend almost 15 billion gallons of corn ethanol a year into the
gasoline they sell to the public.
It may not be a tax-based subsidy (a phrase I never use in the article) but
it is a direct support of the product. And that sir, is a subsidy. So too was
the a 54-cent per gallon import tariff, making US made ethanol that much
more expensive, but that was not in the final version of the column.
That definition aside, you never respond to the direct points of my column
that Ethanol is:
·
·
·
·
·
Anti-Free Market
Damaging to engines
not especially efficient;
Drives up the cost of water to local Midwestern consumers
Causes pollution via runoff to Gulf of Mexico
