Ethanol’s Failure

<a href="http://www.mises.org/story/1886">Ethanol and the Calculation Issue</a><br />n<br />n<blockquote>In the end, the federal government's subsidization of ethanol through various energy bills created the current debate over the efficiency of ethanol production. In an unregulated and unsubsidized economy, the market pricing system for ethanol consumption and the capital goods required in its production will soon signify if ethanol production represents an efficient and viable investment. Hence, the continual need for an ethanol subsidy implies that the latter criteria are not met in ethanol production.<br />n<br />nIf ethanol production were truly profitable it would not need subsidization because consumers would purchase ethanol-enhanced fuel at a price that would provide a reasonable rate of return to producers. This in turn means that the producers of capital goods essential to ethanol production would also receive a rate of return on their investment that would allow them to profitably continue producing capital goods essential to ethanol production.</blockquote><br />n<br />nThis is exactly what I've been saying all along. If ethanol production was a viable industry the private industry would be doing it without the needs of subsides or mandates. With all the new subsides for ethanol in the new energy bill we are just throwing good money after bad for an industry that can't compete. <br />n<br />n<b>No failure in America, whether of love or money, is ever simple; it is always a kind of betrayal, of a mass of shadowy, shared hopes. Greil Marcus</b>