via a special arrangement with Informa Economics, Inc.
What I Was Asked, and Told in Spain
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decided to take a quick vacation to Spain while lawmakers came back to
town because, frankly, I wanted off one time when lawmakers were not.
It looks like my week-long respite produced nothing of significance in
Washington -- no great change from the past.
The following are some nuggets from
Madrid that you may find useful, and some of my comments on what USDA
Secretary Ed Schafer said this week regarding corn-based ethanol subsidies
(incentives for those supporting the subsidies).
-- Who's going to win
the U.S. presidential race? When I presented my passport
in Madrid, Spain, the officer quickly asked me, "So who is going
to win the U.S. presidential election?" I answered, "It is too
close to call but my hunch is McCain-Palin by a very close vote. But watch
the polls after the first presidential debate." The officer then
exclaimed, "I hope it's Obama." Wherever I went in Spain it
was the same -- "We want Obama." They had no idea who Biden
-- Whopper of a price for Big Mac: The
price of a typical McDonald's hamburger in Spain: at least 6 Euros --
In talking with people from Madrid,
besides the presidential election, they asked or told me the following:
-- "Why doesn't the U.S. use more nuclear energy?"
My response: environmentalists. Their response: "What?"
-- "Why doesn't the U.S. have more Smart cars?"
My response: They are coming, a little late, but better than never.
-- "How do your livestock producers cope with the price
of U.S. feed?" My response: with losses, not profits.
-- "Are we in a world recession?" My response:
We don't have the figures yet to confirm, but the more I travel the
answer is, yes.
On the domestic front, I received several
e-mails regarding USDA Secretary Ed Schafer's comments this week regarding
corn-based ethanol subsidies.
What Schafer said, according to Reuters:
Schafer said that cuts in government ethanol subsidies are needed. "The
ethanol industry has incorporated the fact there are subsidies into
their operational, financial models. I think that is a mistake,"
Schafer said at a conference in Kansas City. "They are going to
have to see a gradual ... step-down reduction in subsidies."
Biofuels plan coming. USDA and the Environmental Protection
Agency will roll out a biofuels action plan within the next few weeks,
Schafer said. The plan will lay out what elements of the biofuels industry
the government sees as sustainable and outline the government's ability
to support the industry.
1. Schafer will always spout what the White House
wants him to.
2. The ethanol use mandate was pushed by both Pres.
Bush and Democratic leadership, so that should hold for now, despite
going too far too fast, according to some.
3. People in the Bush administration, including the
Council of Economic Advisers and Treasury, are saying ethanol should
start standing on its own -- thus the comments of PHASING down the blender
credit and eventually eliminating the import tariff. The last Bush budget
request had an elimination of the ethanol import tariff.
4. Most important: Congress will determine the fate
of the blender credit and import tariff, and for now, ethanol is still
Apple Pie and thus very few changes are likely in the short run.
This column is copyrighted material, therefore reproduction or
retransmission is prohibited under U.S. copyright laws.