With the election just around the corner, former North Dakota governor and former U.S. Secretary of Agriculture Edward Shafer told the audience at the United Egg Producers executive conference about presidential candidate Mitt Romney’s commitment to agriculture and to the country’s current ethanol policy. It was as though Shafer were reading from a speech written for the National Corn Growers Association meeting and not a speech written for U.S. egg producers, who are corn buyers. His comments dampened what was generally a warm reception for candidate Romney’s representative. What struck me about the support for ethanol is not so much that I believe that candidate Romney is on the “wrong side” of this issue, but rather that administrations choose “sides” at all.
By the time you read this column, the votes may have already been cast and you may know whether we are going to welcome a new president or have four more years of the Obama administration. My advice to the winner of this year’s election is the same regardless of who wins the race: “Keep your thumb off the scale!”
Support for ethanol
Shafer spoke of smaller government, less regulations and lower taxes; that all sounded good. However, he also described targeted tax credits for horizontal oil drilling when he was governor of North Dakota as well as candidate Romney’s strong support for corn-based ethanol, specifically the Renewable Fuel Standard program. This didn’t sound like free market thinking to me; it sounded more like support for “smart government” and the federal government picking winners and losers. The government should not be picking winners and losers, period. It isn’t okay just because the folks in power just happen to be wearing the “right” jersey.
The Renewable Fuel Standard program is wrong because it mandates use of ethanol in motor fuels and this favors ethanol producers over other users of corn. There is no mandate for U.S. citizens to consume a certain number of eggs or gallons of milk, so why should there be a mandate for ethanol use?
Markets will decide
The president should protect and defend the U.S. Constitution, not decide who should use how much corn. We shouldn’t vote for the candidate who promises to use the power of government to favor our industry. The candidate to vote for is the one who knows that their role is to keep their thumb off the scale. Free markets, without government intervention, are still the most efficient way to pick economic winners and losers. This is true whether the person in the White House has an R or a D on their jersey.