Don’t Do it Again!

Early in 2007 our esteemed elected officials in Jefferson City passed a bill that in the guise of promoting competition, forever changed the landscape of cable in Missouri. AT&T lobbied hard and got what they wanted. Cities and ultimately consumers lost – all in the name of choice and competition.

I won’t belabor that lost cause now – just follow what is happening in cities across the country where AT&T is moving in. Technical problems. A lesser-quality-signal than cable. Slight – but noticeable delays in switching channels and of course what is near and dear – PEG. This once bastion of local programming has been (or will be) relegated to a sort of hybrid channel that forces viewers to first select a channel then make another selection once there to pick the particular channel they wish to watch. They say on the internet if you ask people to make too many clicks, they won’t get to your site. I think the same thing will happen here. People just wont bother.

And one thing we haven’t seen yet in Springfield are the huge boxes AT&T has to put up everywhere to make this work. Because the legislature effectively took away some local authority, these enormous boxes can be put wherever AT&T thinks they need them – just hope one doesn’t end up in your front yard.

But my point is not cable or lack of it but rather that it appears our elected officials may once again be entering an area where they don’t know enough – full disclosure - NEITHER DO I!

I read a blurb yesterday that they may be considering some sort of State legislation related to ethanol and subsidies.

I don’t know enough about ethanol but have read that if we somehow could convert all our corn production and even perhaps additional available land for more corn, and somehow build the multi-million-dollar processing plants and somehow find enough groundwater to support the processing operation – at best we might reduce our dependence on foreign oil by 2.5 %. That’s TWO POINT FIVE PERCENT!

Let’s look at subsidies.

Big oil will no doubt be involved. Do they need any sort of subsidy?

Large agricultural corporations like ADM and Cargill will want in on the action. Do they need a financial boost?

Local farmers who grow corn have seen their prices rise dramatically – partly based on supply and demand and partly on speculation. So they are getting more for their crop than before. But they are getting some sort of windfall since their prices for fuel and fertilizer and other operating costs have gone up. I just read about a Mississippi family who switched from cotton to corn for more profits. That is their choice but if we structure our system to encourage much more of this – one more industry will be shoved out – overseas – maybe it is already.

So who needs the subsidy?

Locally there is an issue about putting one of the ethanol refineries near a small town. The citizens are up in arms that such an operation could begin to eat up their precious water supply among other things.

Do the folks who want to build the plant need a subsidy? I undertstand a little about economic development and enticing businesses. I also understand that government often has to build the infrastructure on which these businesses ride.

But the government is not a bank or a loan company (you could debate this point on several levels). If I want to start up a chocolate business – I can’t expect the government to give me a chunk of money and to start encouraging people to eat chocolate. I’ll get enough tax breaks and incentives just the way the tax code is written now to write off lots of things against my potential profits.

Other issues at stake? Did I mention groundwater? I can’t quote figures but the ethanol plants require lots and lots of water to convert the corn into cellulose and then into what ever it is that ends up being ethanol.

For a nice short summary of why ethanol may not be the thing that solves our energy problems – read George Will in Newsweek (Feb. 11, 2008 Bio-Fuel Follies)

Anybody remember the dust bowl? I am way over-simplifying but part of the problem as I recall was so much crop land had been tilled and tilled and then a few dry years come along and all the top soil blows away. I am not a farmer of row crops but I know that corn is hard on the soil. It uses up nutrients and wears it out so you just can’t keep planting corn year after year without giving the land a rest.

I am a farmer or raiser of sheep so I can relate to the rising cost of feed. Just a few weeks ago I went to buy more and the price per 100 pounds had gone up more than $1 in just one month. I know part of this is the price of oil but it is also pegged to the price of corn and all the other commodities that go into feed.

As with so many things, when you push down in one place (subsidies for ethanol) things will simply pop up somewhere else (rising grain prices – erosion – lowering the water table etc.)

I think it is unfair for the State Govt. to start endorsing through a subsidy a business that has not been proven environmentally safe, absolutely necessary and may in and of itself just be a plain old bad idea.