Ethanol can destroy engines, and it is also proven to corrupt political parties. Politicians who otherwise believe in the environment or in free enterprise prostitute themselves to Iowa’s political bosses who are all tangled up with the ethanol industry. If you believe in free enterprise, open competition, and good government, it’s depressing what Iowa and ethanol have done to the Republican Party.
One Republican lobbyist wants South Carolina to get in on Iowa’s game. Why should those corn cronies be the only Republicans who get to extract wealth from the other 49 states?
Boeing makes airplanes in South Carolina, and many of those airplanes are subsidized by the Export-Import Bank of the United States, whose charter has expired. Here’s the argument by D.C. lobbyist Stephen Aaron:
Any political analyst worth his salt knows you have to support ethanol if you want to win Iowa’s first-in-the-nation caucus. This should be true for Ex-Im in S.C., which is just as important to the state’s economy as ethanol is to Iowa. To their credit, Iowans recognized the opportunity presented by the gravity of their positon in the presidential primary and leveraged it into massive support for the issue of ethanol nationally. Iowans did this by making opposition to ethanol an untenable position for presidential contenders wooing voters. South Carolina should replicate this model with Ex-Im.
Aaron is a former GOP Senate staffer, who for years was an NRA lobbyist. Now he’s at K Street lobbying/consulting firm Levick. His argument sounds ridiculous to any conservative, but it’s the way the GOP’s pro-business wing sees things: Politics is about securing favors for businesses, because helping companies make a profit is the point of government policy.
Economist Don Boudreaux, who taught at Aaron’s alma mater Clemson, has this apt response:
Had Mr. Aaron taken an economics course there he would have been taught to look more deeply into the effects of policy. He would have learned that government subsidies cannot create some jobs without destroying other jobs; he would know that resources directed by government to domestic industry X are directed away from domestic industry Y; he would realize that benefits arbitrarily given by government to producers are paid for with resources arbitrarily taken by government from consumers.
I’ve written before on who Ex-Im’s victims are. They are the downstream customers of subsidized exporters, the U.S. competitors with subsidized U.S. exporters, the U.S. competitors with subsidized foreign manufacturers, and other borrowers who don’t have the loan guarantees Ex-Im’s beneficiaries do. They all lose business to Ex-Im’s favored companies. Wealth and resources go from the market-favored companies to the politically favored companies, so the economy as a whole loses.
This isn’t really “pro-business.” It’s pro-certain-existing-politically-connected businesses. That can’t be the future of the GOP.
Timothy P. Carney, The Washington Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Tuesday and Thursday nights on washingtonexaminer.com.
