March 17, 2013

TAX WHAT YOU DON'T WANT, DON'T TRY TO FUND WHAT YOU DO:

Days of Promise Fade for Ethanol (JOHN ELIGON and MATTHEW L. WALD, 3/17/13, NY Times)

Backed by government subsidies and mandates, hundreds of ethanol plants rose among the golden fields of the Corn Belt, bringing jobs and business to small towns, providing farmers with a new market for their crops and generating billions of dollars in revenue for the producers of this corn-based fuel blend.

Those days of promise and prosperity are vanishing.

Nearly 10 percent of the nation's ethanol plants have stopped production over the past year, in part because the drought that has ravaged much of the nation's crops pushed commodity prices so high that ethanol has become too expensive to produce.

A dip in gasoline consumption has compounded the industry's problem by reducing the demand for ethanol.

Markets are tough mistresses.  They won't let government pick winners, but do allow it to create losers.
Posted by at March 17, 2013 6:54 AM
  

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