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Corn Ethanol Subsidy Going Away
- Thread starter 1engineer
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I'm here.
StarGazer
New member
Supply-side theories have many weaknesses but the major one is the assumption of perfect information. It assumes that all parties involved have all of the necessary information to make rational decisions with regard to their personal finances. But, as I said before, these ideas have only been "demonstrated" in a vacuum. In the real world, information asymmetry (where one party has more information about a particular transaction than the other) plays a huge role in how money moves. The latest bubble is a great example – bankers have much more information about the intricacies of mortgages than the average Joe/Jane. Allowing the “free” market to correct such things is a pipe dream. In such a world, 99 times out of 100, the more informed will always screw the less informed. More informed people tend to be wealthier so the money will flow upward. Then we end up with a problem – plenty of money in the economy but the wealthy are just sitting on it. The money is not moving through the economy. The more the wealth flows upward, the more likely it is that we end up with stagflation.
So, since the “job creators” are not able to do their part, the only entity left for the job creation role is the government. This worked during the Great Depression with FDR pushing for multiple stimulus packages. Then the ultimate government stimulus (WWII) got the economic engine running again. This was putting money in the hands of the average Joe. Joe was then going out and spending said money on goods and services that he needed. Government stimulus created demand. Demand creates jobs. The economy is powered from the bottom-up, not the top-down. After WWII, the government kept on stimulating and the US created the greatest middle class to ever exist. The GI Bill, Cold War (I’m an anti-war hippy but war can stimulate the economy…at least temporarily), the space race, huge funding into education (free college even), infrastructure spending, etc. all were involved in creating the most powerful country to ever exist.
Now, I like Ron Paul probably almost as much as you do but his ideas on the economy scare me. Well, his supply-side ideas that is. I’m with him on closing military bases around the world and cutting military costs. I’m also with him on ending the “Fed” (a misnomer since it’s not really a Federal agency). But switching back to the gold standard is something I disagree with him on. We’d be better off bringing back the “Greenback” (actual government issued currency instead of bank issued). This way we could have a currency that is not restricted by the availability of some metal. Gold only has value if we say it has value, just like our paper currency today. So why not skip the middle man and just have a currency set at a certain value (backed by the government) for exchange? The other major advantage to this approach is that the government will not accrue interest-bearing debt since it would be printing the money itself (it wouldn’t “owe” money to anyone). We would definitely need to have some checks and balances here but it’s been done successfully in the past (Lincoln and Jackson fought hard and had some success with the Greenback for a little while until Lincoln was killed).
The Federal Reserve is murky and mysterious for a reason – the bankers involved do not want people to know how much they are phucking all of us. I have a feeling most people would be shocked and outraged if they knew just how the Fed and banks work in general.
For what it’s worth, I work at a bank.
StarGazer
New member
1engineer
Moderator
Supply-side theories have many weaknesses but the major one is the assumption of perfect information. It assumes that all parties involved have all of the necessary information to make rational decisions with regard to their personal finances. But, as I said before, these ideas have only been "demonstrated" in a vacuum. In the real world, information asymmetry (where one party has more information about a particular transaction than the other) plays a huge role in how money moves. The latest bubble is a great example – bankers have much more information about the intricacies of mortgages than the average Joe/Jane. Allowing the “free” market to correct such things is a pipe dream. In such a world, 99 times out of 100, the more informed will always screw the less informed. More informed people tend to be wealthier so the money will flow upward. Then we end up with a problem – plenty of money in the economy but the wealthy are just sitting on it. The money is not moving through the economy. The more the wealth flows upward, the more likely it is that we end up with stagflation.
So, since the “job creators” are not able to do their part, the only entity left for the job creation role is the government. This worked during the Great Depression with FDR pushing for multiple stimulus packages. Then the ultimate government stimulus (WWII) got the economic engine running again. This was putting money in the hands of the average Joe. Joe was then going out and spending said money on goods and services that he needed. Government stimulus created demand. Demand creates jobs. The economy is powered from the bottom-up, not the top-down. After WWII, the government kept on stimulating and the US created the greatest middle class to ever exist. The GI Bill, Cold War (I’m an anti-war hippy but war can stimulate the economy…at least temporarily), the space race, huge funding into education (free college even), infrastructure spending, etc. all were involved in creating the most powerful country to ever exist.
Now, I like Ron Paul probably almost as much as you do but his ideas on the economy scare me. Well, his supply-side ideas that is. I’m with him on closing military bases around the world and cutting military costs. I’m also with him on ending the “Fed” (a misnomer since it’s not really a Federal agency). But switching back to the gold standard is something I disagree with him on. We’d be better off bringing back the “Greenback” (actual government issued currency instead of bank issued). This way we could have a currency that is not restricted by the availability of some metal. Gold only has value if we say it has value, just like our paper currency today. So why not skip the middle man and just have a currency set at a certain value (backed by the government) for exchange? The other major advantage to this approach is that the government will not accrue interest-bearing debt since it would be printing the money itself (it wouldn’t “owe” money to anyone). We would definitely need to have some checks and balances here but it’s been done successfully in the past (Lincoln and Jackson fought hard and had some success with the Greenback for a little while until Lincoln was killed).
The Federal Reserve is murky and mysterious for a reason – the bankers involved do not want people to know how much they are phucking all of us. I have a feeling most people would be shocked and outraged if they knew just how the Fed and banks work in general.
For what it’s worth, I work at a bank.
This is a 4Runner forum. My original post was about ethanol subsidies and ethanol is something many people are curious about, especially when posting about gas milage. In one of your posts you mentioned that it seems most posters here were conservative. It does not take much reading to know that you are correct. Question: Why then are you trying to change the minds of the majority on about something as complex as macro-economics in a corn ethanol thread on a 5G 4Runner forum? I'm sure there are plenty of places (MSNBC, the ex-ESPN guy Keith) where your ideas would be applauded. I have nothing against you or your beliefs but if I personally have any more questions on how economics work I will ask the people who have made lots of money, not the ones who teach it or store it for them.
Atlanta_man
New member
The subsidy for the farmers and processors looks to be gone.
Unfortunately, ethanol is here to stay and likely in much higher concentrations in gasoline. There are incredible rail and gasoline terminal resources dedicated to getting ethanol delivered and mixed before going to retail outlets. This huge investment is not paid for yet.
(yes, I work for a gasoline/diesel pipeline company)
Unfortunately, ethanol is here to stay and likely in much higher concentrations in gasoline. There are incredible rail and gasoline terminal resources dedicated to getting ethanol delivered and mixed before going to retail outlets. This huge investment is not paid for yet.
(yes, I work for a gasoline/diesel pipeline company)
StarGazer
New member
Yes, I tried to just move it to PM or possibly another thread in a different section but I took the bait. Just know that I continued (expanded) the threadjack, not started it. My apologies still.
BTW, I do not have cable/satellite so I don't watch the corporate news garbage. Many better places to get information.
1engineer
Moderator
I understand. Most here in the 5G forum are informed mature individuals as far as I know. getting anyone to agree on politics or religion is always a losing battle. Remember this though: Today, perception = reality instead of truth = reality. At least in my world we have laws (Pascal, Newton,) and theories (Einstein) that ultimately decide the truth as we know it today. Your world? Not so much. Whoever makes the better deal is right.
Pointing to this latest bubble/bust as support for your side is, bluntly, bizarre. Keynesian economics 101. If you're convinced what we have is a true free market, I'm afraid no length of discussion or empirical proof will be enough. You say you work at a bank. If you've ever owned a business, you will know without a shadow of a doubt, it isn't a true free market. I do not, in the least, intend that to be an insult. Furthermore, the assumption that someone's lack of education or knowledge concerning their financial dealings, when the information and education is freely available to them, is not their fault is disingenuous, at best.. and you know it. I admire the softness of your heart, the problem is keeping it from extending to your head.
This is an entirely inaccurate understanding of history. A few posts ago, I alluded to the the shift that happened in the late 20s towards Keynesian economics. You ignored it with passing dismissal. Look at the depression in 1920: its severity, the response (or lack thereof) and the length of recovery vs. your submission of 1929... and the severity.. and the length of recovery... and the resulting expanding severity of the boom/bust cycle FDR's response started.
Your evaluations of historical events as they relate to economics is clouded entirely with bias. This happens when people stay steeped in academia contrary to hands on experience. You really need to watch the videos I posted. All of them. You don't appear to be dumb but you are missing some compulsory understanding regarding the economy. I would think you'd be hungry for more education, not pass it off simply because it doesn't mold with what you're comfortable repeating.
Now, I like Ron Paul probably almost as much as you do but his ideas on the economy scare me. Well, his supply-side ideas that is. I’m with him on closing military bases around the world and cutting military costs. I’m also with him on ending the “Fed” (a misnomer since it’s not really a Federal agency). But switching back to the gold standard is something I disagree with him on. We’d be better off bringing back the “Greenback” (actual government issued currency instead of bank issued). This way we could have a currency that is not restricted by the availability of some metal. Gold only has value if we say it has value, just like our paper currency today. So why not skip the middle man and just have a currency set at a certain value (backed by the government) for exchange? The other major advantage to this approach is that the government will not accrue interest-bearing debt since it would be printing the money itself (it wouldn’t “owe” money to anyone). We would definitely need to have some checks and balances here but it’s been done successfully in the past (Lincoln and Jackson fought hard and had some success with the Greenback for a little while until Lincoln was killed).
The Federal Reserve is murky and mysterious for a reason – the bankers involved do not want people to know how much they are phucking all of us. I have a feeling most people would be shocked and outraged if they knew just how the Fed and banks work in general.
For what it’s worth, I work at a bank.
Watch the videos. PM me afterwards. We can continue this to whatever length you want. I enjoy debating, learning, challenging etc. My feelings haven't been hurt and I hope yours haven't either. I encourage you, as an equal, watch the videos. Contact via PM if you want to continue discussing this. I'm all for it. :fishing:
JB.
New member
It's the 21st century, guys. We don't have to rely soley on dead theorists. Lots of work has been done pretty recently with experiments and everything. Books have been written about it. For example:
Amazon.com: Thinking, Fast and Slow (9780374275631): Daniel Kahneman: Books
Updating human OSes is slow and difficult, though.
Amazon.com: Thinking, Fast and Slow (9780374275631): Daniel Kahneman: Books
Updating human OSes is slow and difficult, though.
Atlanta_man
New member
EPA raises ethanol goal | The Argus Leader | argusleader.com
tax credit gone
but,
... still have the mandates
tax credit gone
but,
... still have the mandates
Egstyle
New member
Also, this:
"In less than a decade, ethanol has risen from 10% of the US corn crop to almost 40%. Although ending the tax credit will reduce the industry's profits, the US Renewable Fuel Standard, which mandates 15 billion gallons of ethanol to be blended with gasoline by 2015 (about 10% of all fuel used in cars and trucks), will keep demand growing and corn prices high. About 13 billion gallons of corn ethanol is produced today."
Ethanol Tax Break Quietly Expires, Industry Moves on to Gas Pumps3286
This thread got me all excited over nothing. I want that **** out of my gasoline.
1engineer
Moderator
No you don't. Some ethanol is needed. Search for another thread I started called "Winter gas explained" for the answer.
