The continuing political drama has brought us many surprises but perhaps nothing compares in my book to Senator Ted Cruz (R-TX) taking on the ethanol lobby in Iowa. Up until now, Cruz has impressed me as one of those finger-in-the-wind politicians ever at the beck and call of the latest opinion poll, willing to change long-held positions at the drop of a hat. At various times he has been all over the lot on immigration, the Mideast, and other issues. But to come out against the ethanol subsidy in Iowa on the eve of the primary is extraordinary -- either a foolhardy gambit or a courageous stand on principle -- possibly a bit of both.
Predictably, Iowa's biggest ethanol trade groups are going all out in a multi-million dollar campaign to stop Cruz. If he should win, and he has been doing well in the polls, he would be the first of either party to win in Iowa while opposing the ethanol subsidy.
The ethanol subsidy is clearly ripe for repeal. It has been a boon to corn growers but hardly anyone else. The key is the Renewable Fuel Standard (RFS) that requires a specified level of ethanol in gasoline. The Environmental Protection Agency (EPA) is required to raise the ethanol content even higher, but if it gets over 10 percent it will begin to harm car engines.
There were two basic justifications for the RFS - to reduce our dependence on foreign oil and to reduce air pollution. But we are now at long last exporting oil and most environmentalists are figuring out that ethanol adds more carbon dioxide to the atmosphere than it eliminates. Plowing up grasslands and wetlands to grow more corn releases carbon stored in the soil, contributing to climate-warming emissions.
The RFS also drives up the cost of driving because current ethanol blends get fewer miles per gallon than regular fuel. The Institute for Energy Research says U.S. drivers have paid an additional $83 billion for fuel since 2007 because of the RFS.
Getting rid of the 18 billion gallons of ethanol now going into gasoline would reduce the oil glut and also reduce carbon emissions. Congress just got rid of the absurd ban on oil exports, so it would appear to be amenable to revisiting the ethanol foolishness.
But what are we to make of Cruz? His stand against ethanol is courageous in terms of where he is doing it. It may cost him votes in Iowa but it will serve him well among the vast majority of people who are trying to make up their minds about which Republican to choose as the party candidate. I think it will elevate Cruz, making him the most creative true conservative and the best choice over Donald Trump. Don't be surprised to see a fall election where Cruz is the Republican candidate running against Hilary Clinton.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You can quote from this with attribution. Let me know if you would like to speak with Jerry. January 2016