James Surowiecki gets on the ethanol-debate wagon. He’s not so much talking about “is ethanol good, is it bad.” He’s more interested in the absurdities of the interlinked lobbying interests of the corn and sugar industries, and how protecting domestic sugar production has the perverse effect of cementing corn’s role as the raw material for ethanol in the U.S.–even though it’s a totally second rate raw material for making ethanol.
I recently was thinking about sugar as well. Import restrictions cause the price of sugar to be extra high in the U.S. (Surowiecki says the price of sugar in the U.S. is more than twice the world average). Sugar is generally accepted to be terribly unhealthy, certainly at the quantities eaten by the average American. So maybe if the government stopped protecting the domestic sugar industry, the price of sugar in the U.S. would go down, and Americans would eat even more sugar–with a result of even more obesity and related ill health. These health problems are expensive to take care of. So maybe, ironically, by helping a few sugar daddies get very rich through quotas and subsidies (costing American consumers millions of dollars), these policies help keep Americans just a little healthier than they otherwise would be (saving Americans millions of dollars). Is it a wash? Is it actually good policy, so that the savings from avoided healthcare costs outweigh the losses to sugar inflation? I doubt it, but stranger things have happened.