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Iowa Moonshine: The Sordid History of Ethanol Mandates
In recent years, politicians set impossibly high mandates for the amounts of ethanol motorists must buy in 2022 while also setting impossibly high standards for the fuel economy of cars sold in 2025. To accomplish these conflicting goals, motorists are now given tax credits to drive heavily-subsidized electric cars, even as they will supposedly be required to buy more and more ethanol-laced fuel each year.
Why have such blatantly contradictory laws received so little criticism, if not outrage? Probably because ethanol mandates and electric car subsidies are lucrative sources of federal grants, loans, subsidies and tax credits for “alternative fuels” and electric cars. Those on the receiving end lobby hard to keep the gravy train rolling while those paying the bills lack the same motivation to become informed, or to organize and lobby.
With farmers, ethanol producers and oil companies all sharing the bounty, using subsidies and mandates to pour ever-increasing amounts of ethanol into motorists’ gas tanks has been a win-win deal for politicians and the interest groups that support them and a lose-lose deal for consumers and taxpayers.
The political advantage of advocating contradictory future mandates is that the goals usually prove ridiculous only after their promoters are out of office. This is a bipartisan affliction. In his 2007 State of the Union Address, for example, President Bush called for mandating 35 billion gallons of biofuels by 2017, an incredible target equal to one-fourth of all gasoline consumed in the United States in 2006. Not to be outdone, “President Obama said during the presidential campaign that he favored a 60 billion gallon-a-year target.”
The Energy Independence and Security Act of 2007 (EISA) did not go quite as far as Bush or Obama, at least in the short run. It required 15 billion gallons of corn-based ethanol by 2015 (about 2 billion more than were actually sold), but 36 billion gallons of all biofuels by 2022 (which would be more than double last year’s sales). The 2007 energy law also raised corporate average fuel economy (CAFE) standards for new cars to 35 miles per gallon by 2030, which President Obama in 2012 ostensibly raised to 54.5 mpg by 2025 (a comically precise guess, since requirements are based on the size of vehicles we buy).
The 36 billion biofuel mandate for 2022 is the mandate Iowa Governor Terry Branstad (and Donald Trump) now vigorously defend against the rather gutsy opposition of Sen. Ted Cruz. But it is impossible to defend the impossible: Ethanol consumption can’t possibly double as fuel consumption falls.
From 2004 to 2013, cars and light trucks consumed 11% less fuel. The Energy Information Agency likewise predicts that fuel consumption of light vehicles will fall by another 10.1% from 2015 to 2022. So long ethanol is no more than 10% of a gallon (much higher than Canada or Europe), ethanol use must fall as we use less gasoline rather rise as the mandates require. If we ever buy many electric cars or switch from corn to cellulosic sources of ethanol, as other impossible mandates pretend, then corn-based ethanol must fall even faster.
If raising ethanol’s mandated share above 10% is any politician’s secret plan, nobody dares admit it. Most pre-2007 cars can’t handle more than 10 percent ethanol without damage, and drivers of older cars often lack the income or wealth to buy a new one. Since ethanol is a third less efficient than gasoline, adding more ethanol would also make it even more impossible for car companies to comply with Obama’s wildly-ambitious fuel economy standards (which must also reduce ethanol use, if they work).
The 2007 law also mandated an astonishing 16 billion gallons of nonexistent “cellulosic” ethanol by 2022 from corn husks or whatever. We were already supposed to be using a billion gallons of this marvelous snake oil by 2013. Despite lavish taxpayer subsidies, however, production of cellulosic biofuel was only about 7.8 million barrels a month by April, 2015 (about 94 million a year). The Environmental Protection Agency (EPA) mandate in June 10, 2015 was 230 million billion in 2016, which is more fantasy.
It doesn’t help that the Spanish firm Abenoga – which received $229 million from U.S. taxpayers to produce just 1.7 million gallons of ethanol — is trying to sell its plant in Kansas to avoid the bankruptcy fate of cellulosic producer KiOR. It also doesn’t help that a $500,000 federally-funded study paid finds biofuels made with corn residue release 7% more greenhouse gases than gasoline.
The contradictory, fantastic and often scandalous history of ethanol mandates illustrates the increasing absurdity of mandates from Congress and the EPA.
The 2007 biofuel mandate was not just bad policy. It was and remains an impossible, bizarre policy.
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Cuba Attacks Religious Believers Even As It Liberalizes Economic Rules
The Obama administration has been easing restrictions on travel, exports, and export financing. Commerce Secretary Penny Pritzker spoke of “building a more open and mutually beneficial relationship.”
However, the administration expressed concern over Havana’s dismal human rights practices. Despite the warm reception given Pope Francis last fall, the Castro regime has been on the attack against Cubans of faith.
In a new report the group Christian Solidarity Worldwide warned of “an unprecedented crackdown on churches across the denominational spectrum,” which has “fueled a spike in reported violations of freedom of religion or belief.” There were 220 specific violations of religious liberties in 2014, but 2300 last year, many of which “involved entire churches or, in the cases of arrests, dozens of victims.”
Even in the best of times the Castros have never been friends of faith in anything other than themselves. The State Department’s 2014 report on religious liberty noted that “the government harassed outspoken religious leaders and their followers, including reports of beating, threats, detentions, and restrictions on travel. Religious leaders reported the government tightened controls on financial resources.”
Last year the U.S. Commission on International Religious Freedom was similarly critical. The Commission explained: “Serious religious freedom violations continue in Cuba, despite improvements for government-approved religious groups.” Never mind the papal visit, “the government continues to detain and harass religious leaders and laity, interfere in religious groups’ internal affairs, and prevent democracy and human rights activists from participating in religious activities.”
Now CSW has issued its own report. Last year’s increase in persecution “was largely due to the government declaring 2000 Assemblies of God (AoG) churches illegal, ordering the closure or demolition of 100 AoG churches in three provinces, and expropriating the properties of a number of other denominations, including the Methodist and Baptist Conventions.”
This wide-ranging campaign was led by the Office of Religious Affairs. Noted CSW: “In 2015, the ORA continued to deny authorization for a number of religious activities and in cooperation with other government agencies, issued fines and threats of confiscation to dozens of churches and religious organizations.”
Through the ORA the Communist Party exercises control over religious activities. Indeed, reported CSW, the Office “exists solely to monitor, hinder and restrict the activities of religious groups.”
The regime also has increasingly targeted church leaders and congregants, for the first time in years jailing one of the former. In early January two churches were destroyed, church members arrested, and three church leaders held incommunicado. One of the government’s more odious practices, according to CSW, has been to threaten churches with closure if they “do not comply with government demands to expel and shun specific individuals.”
The regime’s destructive activities have been justified as enforcing zoning laws. But in practice the measure is a subterfuge to shut down churches.
Other legislation threatens house churches. While not consistently implemented in the past, “church leaders have repeatedly expressed concern at its potential to close down a large percentage of house churches.”
CSW concluded that the ongoing crackdown was an attempt to limit calls for social reform which would complement ongoing, though limited, economic changes. Detentions initially were concentrated on “Cubans considered by the government to be political dissidents,” including a group of Catholic women called the Ladies in White. The regime crackdown later “expanded to include other individuals associated with independent civil society, including human rights and democracy activists.”
The Obama administration was right to engage Cuba. After more than 50 years, the embargo serves no useful purpose.
However, even lifting all economic restrictions won’t turn Cuba into a democracy. Only sustained pressure from within and without Cuba is likely to force the Castro regime to yield control to the Cuban people.
As I wrote in Forbes: “Americans should forthrightly encourage freedom in Cuba. Religious believers should be particularly vocal in supporting people seeking to live out their faith under Communist oppression. Some day autocracy will give way to liberty even in Cuba.”
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Ultimately, “School Choice” Must Be about Freedom
It is National School Choice Week, and this ever-growing event-of-events will feature discussions throughout the country tackling test scores, competition, empowering the poor, efficient use of taxpayer dollars, monopoly breaking, and numerous other, very important topics. But ultimately just one goal must be paramount: maximizing freedom. In the end, it is defending liberty – the true, bedrock American value – that school choice must be about.
This is first and foremost a normative conviction. Freedom must have primacy because society is ultimately composed of individuals, and leaving individuals the right and ability to control their own lives is fundamentally more just than having the state – be it through a single dictator, or majority of voters – control our thoughts, words, or actions.
Of course, children are subject to someone’s control no matter what. But a corollary to free individuals, especially when no one is omniscient and there is no unanimous agreement on what is the “right” way to live, or think, or believe, must be free association – free, authentic communities. We must allow people and communities marked by hugely diverse religious, philosophical, or moral views, and rich ethnic and cultural identities and backgrounds, to teach their children those things. Short of stopping incitement of violence or clear parental abuse, the state should have no authority to declare that “your culture is acceptable,” or “yours must go.” Indeed, crush the freedom of communities and you inevitably cripple individual liberty, taking away one’s choices of how and with whom to live.
Of course, the reasons to demand educational freedom are not just normative. They are also about effective education, and it is not hard to understand, at a very basic level, why.
If there are things on which all agree, choice is moot – all will teach and respect those things. But if we do not all agree, forcing diverse people to support a single system of “common” schools yields but three outcomes: first, divisive conflict; then, either inequality under the law – oppression – when one side wins and the other loses, or lowest-common-denominator curricula to keep the peace. Forced conflict and curricular mush no one should want. And inequality under the law we should all loathe and fear, even if we do not care about the rights of others and think we will come out the victors today. Tomorrow, we may not.
School choice is something for which all Americans should fight. But ultimately, it is too limiting. What we need is freedom for all.
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Appreciating Abundance
Thanks to market exchange, Americans enjoy a greater variety of food choices, pay less for groceries than before, and have more income left over after grocery expenses. And, of course, this abundance is not limited to food, but extends to material goods and technology.
Bafflingly, there are those who bemoan abundance. Bernie Sanders, to name one, has said, “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers.”
When grocery-shopping to stock up for the impending blizzard, many of us on the U.S. East Coast were met with extremely limited choices and nearly barren aisles. When I attempted to buy sliced cheese, for example, there was only a single kind left: Swiss. There was no provolone or Muenster or pepper jack or cheddar or Colby any of the other varieties normally available. Although I find Swiss cheese bland, I bought it because it was my only option. I and many others were “living the dream” of those who romanticize scarcity.
An economics professor summed up the situation in this humorous tweet:
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Income Mobility, Regressive Regulations, and Personal Choices
Americans often move between different income brackets over the course of their lives. As covered in an earlier blog post, over 50 percent of Americans find themselves among the top 10 percent of income-earners for at least one year during their working lives, and over 11 percent of Americans will be counted among the top 1 percent of income-earners for at least one year.
Fortunately, a great deal of what explains this income mobility are choices that are largely within an individual’s control. While people tend to earn more in their “prime earning years” than in their youth or old age, other key factors that explain income differences are education level, marital status, and number of earners per household. As HumanProgress.org Advisory Board member Mark Perry recently wrote:
The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g. staying in school and graduating, getting and staying married, etc.), which means that individuals and households are not destined to remain in a single income quintile forever.
According to the U.S. economist Thomas Sowell, whom Perry cites, “Most working Americans, who were initially in the bottom 20% of income-earners, rise out of that bottom 20%. More of them end up in the top 20% than remain in the bottom 20%.”
While people move between income groups over their lifetime, many worry that income inequality between different income groups is increasing. The growing income inequality is real, but its causes are more complex than the demagogues make them out to be.
Consider, for example, the effect of “power couples,” or people with high levels of education marrying one another and forming dual-earner households. In a free society, people can marry whoever they want, even if it does contribute to widening income disparities.
Or consider the effects of regressive government regulations on exacerbating income inequality. These include barriers to entry that protect incumbent businesses and stifle competition. To name one extreme example, Louisiana recently required a government-issued license to become a florist. Lifting more of these regressive regulations would aid income mobility and help to reduce income inequality, while also furthering economic growth.
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Cato Scholars Respond to Obama’s Final State of the Union Address
Cato Institute scholars Emma Ashford, Trevor Burrus, Benjamin Friedman, Dan Ikenson, Neal McCluskey, Pat Michaels, Aaron Powell, and Julian Sanchez respond to President Obama’s final State of the Union Address.
Video produced by Caleb O. Brown, Tess Terrible and Cory Cooper.