by Dr. Roy Cordato
Senior Economist, Emeritas
Reason.com’s Jacob Sullum points out what could, from a free market perspective, be the most important result of Monday’s Iowa Caucus–a candidate that favors the elimination of ethanol subsidies and mandates won. It has been traditionally thought that no one who openly opposes the subsidies could possibly win in this state which has been a major beneficiary of this form of coprate welfare for decades. But two Republican candidates stuck to principle on this issue, Ted Cruz and Rand Paul, and the former won the caucus in spite of his stance against federal ethanol mandates called Renewable Fuel Standards (RFS). According to Sullum “Cruz and Rand Paul were the only two candidates to earn a “bad rating” from America’s Renewable Future, a biofuel industry group whose state director is Branstad’s son, for opposing the RFS.” The reference is to Terry Brandstad, the long time Republican governor of Iowa who came out strongly against Cruz because of his stance on ethanol. As Sullum points out:
You can understand why all the other candidates decided to play it safe…when you look at the history of Iowa caucus winners since 1980, the first presidential election year after Congress started subsidizing ethanol. On the Republican side, all the winners—George H.W. Bush (1980), Bob Dole (1988 and 1996), George W. Bush (2000), Mike Huckabee (2008), and Rick Santorum (2012)—were ethanol boosters. Likewise on the Democratic side: Jimmy Carter (1980), Walter Mondale (1984), Dick Gephardt (1988), Tom Harkin (1992), Al Gore (2000), John Kerry (2004), and Barack Obama (2008) all favored crony capitalism for corn. In other words, Cruz is the first presidential candidate to win the Iowa caucus while opposing federal support for corn-based ethanol (along with “all energy subsidies and mandates”).