More Reminders Of Where Messing With Free Markets Takes You

More Reminders Of Where Messing With Free Markets Takes You

I've expressed my concern about ethanol as fuel (at least, corn-derived ethanol as fuel) before. The May 14, 2009 Business Week has an article about an increase in problems associated with gasoline with too much ethanol in it:

Scott Morrison is the owner of the City Garage chain in North Texas and he related the story of his technical director's run-in with ethanol; in December he filled up his E85 Flex Fuel Chevy Suburban at the Exxon station in Ovilla, just south of Dallas. His Suburban died on the spot, because even an E85-equipped vehicle will not run on the 100% pure ethanol that Exxon station was pumping that day. In that case it was not Exxon's fault but a mistake at the distribution center, and Exxon (XOM) quickly made good for the cost of repairs.

On Jan. 16 of this year, Lexus ordered a massive recall of certain 2006 to 2008 models, including the GS Series, IS and LS sedans. According to the recall notice, the problem is that "Ethanol fuels with low moisture content will corrode the internal surface of the fuel rails." In layman's terms, ethanol causes pinpoint leaks in the fuel system; when leaking fuel catches your engine on fire, that's an exciting way to have your insurance company buy your Lexus. Using ethanol will cost Toyota (TM) untold millions.

The article claims that the mass media are ignoring the problem--and I can't find a lot of other coverage of the problem.

The case for ethanol as fuel was to reduce dependence on foreign oil; the actual reason that the federal government went so overboard on the tax credits was to satisfy the agricultural lobby. Like many of these other crazy interferences in the free market, there is always:

1. The good, socially responsible reason to do this.

2. The greedy, special interest reason to do this.

3. The expected positive benefit. Sometimes this actually comes true, although seldom as large a benefit as was promised.

4. The completely unexpected result. If we are lucky, it's something as minor as engine fires. Sometimes, it's the destruction of a whole industry, with the jobs that go with it.

The cap-and-trade idiocy that Democrats are shoving through Congress right now is going to be the same set of problems, and for the same set of reasons.