Friday, December 2, 2011

More on Stern

Stern wishes the government to direct more of our economy.  Doing so, he believes, would allow America to regain her footing.  Well, we have some good examples of government meddling in the private sector, so let’s examine one of them: ethanol.

Several years ago, Congress passed a law mandating the use of ethanol in motor vehicle fuels.  It was believed this would lower our dependence on foreign oil and help the environment (note that both of these proved to be false).  Gasoline manufacturers were mandated to use a certain percentage of ethanol, and some even thought that ethanol could compete with traditional gasoline, especially given this new mandate.  However, ethanol is much less energy intensive than gas and more expensive to make (not to mention that it takes about one gallon of oil to make a gallon of ethanol).
Therefore, consumers – even those who really wanted to be “green” were having to fill up their cars more often and at higher prices.  Consumers abandoned ethanol for cheaper, more efficient gasoline.  Our brilliant Congress stepped in and began subsidizing ethanol, to the tune of $6 billion last year, or 45 cents per gallon.

So, instead of allowing consumers to choose a cheaper, more efficient fuel, government distorts the price of a poor substitute through subsidies, wasting billions in taxpayer dollars.
If Mr. Stern desires that we become more like China, you can expect more stuff like this.


  1. I here this hypothesis alot - that the U.S. should emulate China. Hereafter I dub it the Stern hypothesis.

    The issue that people fail to realize is this: the period of growth from China coincides with a great economic liberation of the Chinese people. Yes, it remains a directed economy, but much less so than it ever was in modern times. A more logical argument, then, is to continue to liberalize the economy.

    The Soviets were huge fans of 'five-year plans.' Where did that get them?

    People demanding a more government-directed economy have failed to understand the real reasons why centrally-planned economies fail.

  2. Stern, a former union thug, would certainly like to see big government direct more of the economy, as this would benefit federal workers. Predictable.

  3. From the National Review:

    Puts the smack-down on those who point to the Chinese success story as a model for America.

  4. Excellent piece.

    Stern says government should partner with the private sector. What a lovely sounding phrase ~ partner. It conjures up images of a peaceful, mutually beneficial relationship, where each party has an equal say. Except that government uses force with the threat of violence to get its way.

    There is no partnership with government. Any so-called partnership would invariable lead to a subservient relationship.