Newt Gingrich sells soul to ethanol vote in Iowa

WASHINGTON - AUGUST 13:  Former Republican Spe...Image by Getty Images via @daylife
Opinion Journal:

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The former Speaker blew through Des Moines last Tuesday for the Renewable Fuels Association summit, and his keynote speech to the ethanol lobby was as pious a tribute to the fuel made from corn and tax dollars as we've ever heard. Mr. Gingrich explained that "the big-city attacks" on ethanol subsidies are really attempts to deny prosperity to rural America, adding that "Obviously big urban newspapers want to kill it because it's working, and you wonder, 'What are their values?'"

Mr. Gingrich traced the roots of these supposed antipathies to the 1880s, an observation that he repeatedly tendered "as an historian." The Ph.D. and star pupil of futurist Alvin Toffler then singled out the Journal's long-held anti-ethanol views as "just plain flat intellectually wrong."

Mr. Gingrich is right that ethanol poses an intellectual problem, but it has nothing to do with a culture war between Des Moines and New York City. The real fight is between the House Republicans now trying to rationalize the federal fisc and the kind of corporate welfare that President Obama advanced in his State of the Union. We'll dwell on this problem not merely because Mr. Gingrich the historian brought it up, but because it and he illustrate so many of the snares facing the modern GOP.

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Of course, the ethanol boom isn't due to the misallocation of resources that always stalks inflation. It is the result of decades of deliberate industrial policy, as Mr. Gingrich well knows. In 1998, then Ways and Means Chairman Bill Archer tried to kill ethanol's subsidies for good, only to land in the wet cement that Speaker Gingrich had poured.

Yet today this now-mature industry enjoys far more than cash handouts, including tariffs on foreign competitors and a mandate to buy its product. Supporters are always inventing new reasons for these dispensations, like carbon benefits (nonexistent, according to the greens and most scientific evidence) and replacing foreign oil (imports are up). An historian of Mr. Gingrich's distinction surely knows all that.

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This policy is bad for your autos and bad for energy policy. We would be much better off if this administration would stop trying to strangle domestic production, which is one of the reasons imports are up. If you took away the subsidies and the mandates, there would not be much of an ethanol market. That tells you right there what is wrong with the stuff. It is not worth what we are paying for it.
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