Senate Votes To End Ethanol Tariff

About damn time.

The ethanol tariff and subsidy were essentially welfare for corn farmers, and perversely, most of the subsidy goes to agricultural giants like Archer Daniels Midland.

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Natural Gas to Ethanol

Now here is a form of ethanol production I have no problem with. Dallas TX based Celanese says it has a process to make ethanol relatively cheaply from natural gas.

However, because the ethanol is produced from a fossil fuel, it doesn't qualify as a renewable fuel, and therefore can't be used to satisfy the renewable fuel mandates that are driving corn based ethanol. So unless the law is changed, corn ethanol will continue to drive up food prices and eat tax money.

Romney And Ethanol

Mitt Romney, pandering to Iowans, has come out in support of ethanol subsidies.

I'm going to have a hard time supporting the guy in the primary.

Ethanol subsidies, like other agricultural price supports, are reverse-robin-hood: they take from the poor (us) and give to the mostly rich (large farms and Big Ag).

Here's an idea: how about we let ethanol follow market forces. If no one wants the stuff, there will be less produced, and farmers can plant wheat and barley instead, to make proper methanol.

GM CEO: Raise The Gas Tax

GM's CEO, Dan "plain speaker" Akerson said in an interview with Detroit News:

"There ought to be a discussion on the cost versus the benefits," he said. "What we are going to do is tax production here, and that will cost us jobs." For the years 2017-25, federal officials are considering 3 percent to 6 percent annual fuel efficiency increases, or 47 mpg to 62 mpg. That could boost the cost of vehicles by up to 3,500. "You know what I'd rather have them do � this will make my Republican friends puke � as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said. "People will start buying more Cruzes and they will start buying less Suburbans."

He is of course, correct: it would be easier to push the market towards buying efficient cars by keeping gas expensive... easier for the carmakers, not for the consumer. The consumer wants the pain hidden--we want cheap gas and efficient cars (but not too expensive, thank you). However, the last part of his quote, "People will start buying more Cruzes..." is not what the CEO should really want--GM probably makes a much nicer margin on Suburbans than on Cruzes. GM's top selling product is still the Silverado/Sierra.

Also, a gas tax now would hurt consumer spending, now, and slow economic recovery--hurting GM's sales.

Akerson should be careful, he isn't going to win any friends among his customers, or on Wall Street, with so much plain speaking.

GM's Akerson Eulogizes LIncoln

In an uncharacteristically (for GM) blunt statement, GM's CEO said

"They are trying like hell to resurrect Lincoln. Well, I might as well tell you, you might as well sprinkle holy water. It's over," he said about Cadillac's historical competitor."

He's right, of course, that Lincoln is struggling.

But, he shouldn't be too proud of Cadillac--at 11,600 sales in May of this year, Cadillac is still well behind BMW (20,600) and Mercedes (20,300), and even Lexus (12,300).

Mazda Manufacturing To Leave US?

According to The Detroit News, an unnamed source is saying that Mazda plans to leave the AAI plant in Flat Rock, MI, which would make Mazda a true import brand once again, with models coming from Japan and Mexico.

I understand that Mazda has a business to run, and that the Mazda6 (a good car) is not a great seller, but I am a little disappointed. I once owned one of AAI's previous products, the Mazda 626, which was a good handling but cramped mid-sized sedan. It was fun to point to my "foreign" Mazda and tell people it was assembled in Michigan by UAW labor.

The Dangerous Old Days

Wow. Racing has become a LOT safer than it used to be.

Killed Myself When I Was Young from The Jalopy Journal on Vimeo.