There are few things that energy-policy experts of all political stripes can agree on — but one of them is that mandates and subsidies to promote the use of corn ethanol (a policy first implemented by Jimmy Carter) are wasteful boondoggles that harm our environment and food supply while imposing billions of dollars of hidden costs on consumers. However, most energy-policy experts are not running for president in the Iowa caucuses.
Ted Cruz, however, is running in the Iowa caucuses, and this week he found out what happens when you try to take on Big Corn. The results of this battle may tell us a great deal about the future of free-market policies in the GOP. It’s a process that even voters who are not enthusiastic about any of the leading candidates should pay close attention to.
Iowa governor Terry Branstad lit into Cruz this week, breaking with the longstanding neutrality of governors in the caucus process. Branstad urged Cruz’s defeat, noting that Cruz “hasn’t supported renewable fuels and I think it would be a big mistake for Iowa to support him.” When asked to clarify, he doubled down on his statement.
What was behind this sudden outburst? Well, Branstad’s son Eric is a paid shill for the corn-ethanol industry who runs a shady group called America’s Renewable Future (ARF). ARF has been hounding Cruz on the campaign trail, sending out mailers and going on the airwaves to hit Cruz over his call for a phase-out of the Renewable Fuel Standard (RFS), a policy that effectively and practically mandates that a minimum percentage of ethanol be part of each gallon of gasoline sold. (The particulars of the RFS, which emerged from the 2005 Energy Policy Act, involve a lot of arcane energy-policy wonkery that we need not delve into here.)
In a report card issued by America’s Renewable Future, Cruz joined Rand Paul in receiving a “bad” rating, while Donald Trump joined Hillary Clinton and Bernie Sanders in receiving a “good” rating. A few hours after Branstad attacked Cruz, Trump demonstrated his continued willingness to be Branstad’s errand boy, joining in Branstad’s attack on Cruz’s ethanol position while pandering to Big Corn at a renewable-fuels forum.
#share#It tells you a great deal about Branstad, and about Iowa politics, that he did not even attempt to disguise his attack on Cruz as a matter of conservative principle — this despite the fact that the corn-ethanol mandate through the RFS serves as an effective estimated $10 billion annual tax increase on Americans, in addition to its many other shortcomings. It’s nothing more than a cleverly disguised gas tax that wastes its proceeds on burning otherwise useful food.
Corn ethanol may not be the third rail in Iowa politics that Renewable Fuel Standard advocates claim.
Branstad has tried to frame this controversy as a question of Cruz’s being bought by the oil lobby. But Cruz has called for the elimination of all subsidies on energy, including oil and gas, so that attack rings hollow. Cruz also recently attempted to defend his own approach to ethanol in the Des Moines Register, arguing for a free-market system of allowing higher-percentage blends of ethanol and reining in the EPA as a way of boosting Iowa’s corn farmers. While the practical difficulties of such an approach are more challenging than Cruz suggests in his op-ed, it at least has the virtue of being a serious market-based and farmer-centered approach to the issue rather than simply an industry-based giveaway.
And corn ethanol may not be the third rail in Iowa politics that RFS advocates claim. The RFS is much more likely to help agribusiness and gigantic farms than the small family farms that Iowans love. (A few years ago, we spent several days with my wife’s cousins on their small family farm in Hancock County. They won’t benefit from ethanol subsidies, but their neighbors growing thousands of acres of corn monoculture will.)
While the big winners in the RFS struggle may not be obvious, the losers surely are. Some 40 percent of our nation’s corn crop now goes to make ethanol rather than food for humans or animals. As a result, the ethanol mandate increases food prices. With petroleum prices at decades-long lows and other alternative fuels on the horizon, forcing corn ethanol on the marketplace makes less sense than ever.
Cruz, of course, tried to turn lemons into lemonade by casting Branstad’s remarks as yet another attack by the establishment. “It is no surprise that the establishment is in full panic mode,” Cruz said to an audience of supporters. “As conservatives unite behind our campaign, we are going to see the Washington cartel firing every shot they can, every cannon they can, because the Washington cartel lives on cronyism. It lives on making deals.”
#related#One might be tempted to simply see this as the remarks of a self-serving politician making the best of a difficult political situation. Yet in the debate among GOP cognoscenti over whether the establishment despises Cruz for who he is or what he stands for, this would seem to be a fairly strong point for the latter. A careful politician like Branstad raises the stakes to this degree only if someone is threatening to hold up his gravy train. If conservatives indeed love someone for the enemies they have made, than it must be said that Cruz’s stand on principle here has made him all the right enemies.
Unlike some at NRO, I’m not a dedicated Trump-hater. Despite his many shortcomings, I think he brings some useful things to the political process, and have said so in these pages. But for all his bluster, if Trump will bow and scrape to a mild-mannered politician like Terry Branstad on a question of conservative principle, even when his main rival has given him political cover to do the right thing, how is he going to stand up to the Iranian mullahs or the Democratic political and media machine when everyone is telling him to do the wrong but easy thing?
That’s a question that Iowa caucus-goers should ask themselves before making their voting decision.
— Jeremy Carl (@jeremycarl4) is a research fellow at the Hoover Institution, Stanford University, where he directs the Shultz-Stephenson Task Force on Energy Policy.