The Stalwart: Ethanol and Jobs

Now that Bush and everyone else are starting to talk about ethanol, the industry is doing their part to gain favor with the public. Recently a study was released that suggests ethanol investments would--surprise-- create jobs and boost the economy:

A study from the University of Missouri-Columbia estimates ethanol production will leave a noticeable footprint on the state's economy - to the tune of hundreds of millions of dollars a year in economic activity.

Missouri has ethanol plants in Craig, Macon and Malta Bend, and a fourth is expected to go online this fall in Laddonia. Combined, the four plants are expected to produce about 156 million gallons of ethanol annually.

Further expansion is expected to bring production up to 350 million gallons by 2007 or 2008, according to Rex Rickets, coordinator of the commercial agricultural program at the University of Missouri-Columbia.

Another ethanol plant is planned to open by fall 2006 in Sikeston. On Saturday, Lifeline Foods announced a $60 million plant expected to process 40 million gallons of ethanol annually in St. Joseph, beginning as soon as the end of 2006.

The study's findings were announced Tuesday at a news conference with lawmakers who are leading a proposal to require gas stations to blend their fuel with 10 percent ethanol. The lawmakers said the findings add fuel to their efforts.

The Missouri Corn Growers Association funded the study, which was conducted by researchers with the agriculture school in Columbia.

We've criticized the wind energy industry for making these same arguments. Job creation can't be an argument in favor of a given industry for, as we like to say, why not just power a city by turning a giant stone, and employing thousands of people to manually push it? Possibly for good reason, job growth is the economic indicator that the average person finds most important, and we're not surprised the industry uses this tactic. Of course we doubt that they managed to calculate the opportunity cost from the taxes required for the subsidy, not being circulated through the economy. Of course, if ethanol would be an economic boon, then the market should be adopting it en masse.

Oh, and not to mention, of course, that the industry has already been the recipient of subsidies for years and years and has gone nowhere.

What is This?

The Stalwart is a blog written by Joseph Weisenthal, covering such topics as stocks, business, economics, politics, technology, gambling, chess, poker, economics, current events, music, math, Chinese food, science, randomness, kurtosis, sports, evolutionary fitness, and anything else of the author's choosing. The words contained herein are the author's own, not affiliated with any other firm or employer.

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