WEBVTT NOTE Ethanol Subsidies Have Many Bad Consequences 1 00:00:00.000 --> 00:00:09.200 All right, next up. He's senior fellow at the policy, political economy, in political economy at the Independent Institute. 2 00:00:09.200 --> 00:00:15.500 He edits their quarterly journal, The Independent Review. I'm sure you've seen this publication. 3 00:00:15.500 --> 00:00:21.500 He is the winner of the most prestigious prize that the Mises Institute awards. 4 00:00:21.500 --> 00:00:26.100 That's the Gary S. Slarbom Prize for lifetime achievement in the cause of liberty. 5 00:00:26.100 --> 00:00:33.020 He is the 2007 winner of that prize. He's written a number of books against Leviathan, 6 00:00:33.020 --> 00:00:41.220 Depression War and the Cold War. One that is especially near and dear to my heart is 7 00:00:41.220 --> 00:00:49.380 this one called Crisis and Leviathan. And if you don't think that is a good book, none 8 00:00:49.380 --> 00:00:55.380 None other than Murray Rothbard would assign that in his U.S. Economic History class. 9 00:00:55.380 --> 00:00:59.020 So there is no greater endorsement for a book than that. 10 00:00:59.020 --> 00:01:02.580 So we have it on sale and he is here. 11 00:01:02.580 --> 00:01:04.220 He can autograph it. 12 00:01:04.220 --> 00:01:12.380 He is also going to talk to you today about ethanol subsidies and many, many bad consequences. 13 00:01:12.380 --> 00:01:15.380 Robert Higgs. 14 00:01:15.380 --> 00:01:33.580 Well, it's a pleasure to be here in Indianapolis today and an experiment as well because I'm 15 00:01:33.580 --> 00:01:44.700 going to talk to you about the ethanol program and some of its causes and consequences. 16 00:01:44.700 --> 00:01:51.420 This is a talk I've never given before, so you may consider yourselves guinea pigs. Often 17 00:01:51.420 --> 00:01:56.900 people invite me to give talks because they're aware that I know something about a certain 18 00:01:56.900 --> 00:02:01.280 topic and they want me to talk about that. And of course that's something I've talked 19 00:02:01.280 --> 00:02:08.780 about before, sometimes many times. I have the feeling at times that I'm like this broken 20 00:02:08.780 --> 00:02:17.160 and Record that just keeps spinning the same groove over and over and over and so I'm hoping 21 00:02:17.160 --> 00:02:22.300 to have a good time with you guinea pigs talking about something I've never discussed publicly 22 00:02:22.300 --> 00:02:23.300 before. 23 00:02:23.300 --> 00:02:29.740 However, as a prelude to that, I will spend a little time talking about some of the principles 24 00:02:29.740 --> 00:02:36.340 that I think are helpful in understanding the ethanol program, why it exists at all, 25 00:02:36.340 --> 00:02:46.240 and why it continues in spite of all the horrors that it produces and these are elements of 26 00:02:46.240 --> 00:02:56.720 public choice or political economy that apply to many different government programs and it 27 00:02:56.720 --> 00:03:03.220 turns out that the ethanol program is a kind of poster child. These principles are especially 28 00:03:03.220 --> 00:03:11.720 is really evident when we look at that program, but they're generally visible in many other 29 00:03:11.720 --> 00:03:18.700 government programs as well. Some of the previous speakers have mentioned government ag policy 30 00:03:18.700 --> 00:03:24.380 has been around in this country for a long time. It actually began before the war between 31 00:03:24.380 --> 00:03:31.500 the states when the patent office was giving away seeds to farmers and then later on of 32 00:03:31.500 --> 00:03:38.740 of course the Department of Agriculture took over and expanded that kind of activity and 33 00:03:38.740 --> 00:03:47.540 added others and then the state experiment stations were created in the 1880s and I always 34 00:03:47.540 --> 00:03:55.740 remember a story about the extension agent going out and finding the old farmer out in 35 00:03:55.740 --> 00:04:06.740 I'm from the extension agent for the county. I'm here to tell you how you can farm better. 36 00:04:06.740 --> 00:04:13.740 And the farmer says, I don't need you. You're wasting your time. I already know how to farm better than I am. 37 00:04:13.740 --> 00:04:24.740 That was a kind of joke. I grew up on a farm, so the extension agent was really not that much of a welcome 38 00:04:24.740 --> 00:04:31.300 A welcome figure when he came around to farms, farmers always knew a lot more than the extension 39 00:04:31.300 --> 00:04:39.480 agent did, but at all events we've got many different forms of agricultural subsidies from 40 00:04:39.480 --> 00:04:46.900 giving away things such as seeds and nowadays giving away all sorts of things to subsidies 41 00:04:46.900 --> 00:04:55.980 technologies that take countless forms, price supports, conservation set-aside payments, 42 00:04:55.980 --> 00:05:03.460 guarantees of making up the difference between loans issued and crop values and you name 43 00:05:03.460 --> 00:05:04.460 it. 44 00:05:04.460 --> 00:05:06.220 So it just goes on and on and on. 45 00:05:06.220 --> 00:05:10.660 And even the ag economists have trouble, I think, keeping up with this. 46 00:05:10.660 --> 00:05:40.660 I want to second what Tom DiLorenzo said about Zeke Pesar. He really is excellent, and I want to add to it that one of my Ph.D. students from the days when I taught at the University of Washington, Randy Rucker, who teaches at Montana State University, has become a co-author with Zeke, and so they now have a book together which is the best book I know of, 47 00:05:40.660 --> 00:05:50.660 I believe this is far and away the best book you could read about agricultural economics and the role of government policy in it, PESAR and Rucker. 48 00:05:50.660 --> 00:05:59.660 And that happens to be one of the books produced by the Independent Institute with which I'm affiliated. 49 00:05:59.660 --> 00:06:08.660 But the first point I want to make to you is when the government goes out and injects itself into the market system 50 00:06:08.660 --> 00:06:21.660 It never does just one thing. It can't go in there with kind of a surgical strike, as they would say in the Defense Department. 51 00:06:21.660 --> 00:06:35.660 Even though the main intention may be one thing, such as raising the price of corn to a higher level than it would achieve if we didn't put the government into the market, 52 00:06:35.660 --> 00:06:44.160 Even if that succeeds, and especially, in fact, if it succeeds, other things are going to be affected. 53 00:06:44.160 --> 00:06:52.160 And, of course, this is no secret to the people who exert influence on the making of ag policy. 54 00:06:52.160 --> 00:07:01.660 And, in fact, historically, some of the guiltiest parties behind agricultural policy making are not farmers at all. 55 00:07:01.660 --> 00:07:18.660 But people associated with farming industries in some way, especially as suppliers of farm products, as banks that make loans to farmers, as purchasers of farm products, and so forth. 56 00:07:18.660 --> 00:07:24.660 Farming is part of the great division of labor and it's associated with a lot of other interests. 57 00:07:24.660 --> 00:07:31.660 and often times those interests have more clout in policy making than the farmers themselves. 58 00:07:33.580 --> 00:07:38.900 One of the good illustrations of that was that when the Agricultural Adjustment Act 59 00:07:38.900 --> 00:07:45.900 was passed in 1933 and the Agricultural Adjustment Administration was created to administer the 60 00:07:47.060 --> 00:07:54.060 act, the government had to appoint somebody and it appointed a man named George Peake. 61 00:07:54.060 --> 00:07:59.900 Peek was not a farmer. Peek had been the president of the Moline Plow Company. But of course, 62 00:07:59.900 --> 00:08:04.580 all of these equipment companies understood that if something could be done by the government 63 00:08:04.580 --> 00:08:12.860 to give higher incomes to farmers, they would in turn, as Doug was suggesting in his talk 64 00:08:12.860 --> 00:08:18.860 about the history of Kansas, they would use some of that higher income to buy equipment. 65 00:08:18.860 --> 00:08:26.220 And so the equipment manufacturers were part of the politicking that gave rise to this 66 00:08:26.220 --> 00:08:36.020 first great attempt to have widespread detailed government planning of agricultural output 67 00:08:36.020 --> 00:08:39.340 and prices from 1933 on. 68 00:08:39.340 --> 00:08:46.380 There have been countless changes over the years in the details of the ag programs, but 69 00:08:46.380 --> 00:08:53.820 And in many ways, there's been continuity all the way from 1933 to the present. 70 00:08:53.820 --> 00:08:57.240 So that's principle number one. 71 00:08:57.240 --> 00:09:00.100 You can't do just one thing when you intervene. 72 00:09:00.100 --> 00:09:02.860 You're going to affect a lot of other things. 73 00:09:02.860 --> 00:09:09.040 And because of that, people who have other interests besides farming are going to become 74 00:09:09.040 --> 00:09:13.380 players in policymaking. 75 00:09:13.380 --> 00:09:22.380 A second principle relates to what is sometimes called the bootleggers and baptists model. 76 00:09:22.380 --> 00:09:28.380 And I'm sure some of you have heard of this, but if you haven't, I'll give you a quick rundown. 77 00:09:28.380 --> 00:09:36.380 Bruce Yandel, an old friend of mine who teaches at Clemson, or is still associated with Clemson, 78 00:09:36.380 --> 00:09:43.220 I'm not sure he's still teaching actively, but Bruce came up with the idea that a lot 79 00:09:43.220 --> 00:09:52.880 of policymaking may appear on the surface to be the result of ideological zealotry or 80 00:09:52.880 --> 00:09:55.780 even religious zealotry. 81 00:09:55.780 --> 00:10:04.620 So that in the case of prohibitions against alcohol sales in many states, even after the 82 00:10:04.620 --> 00:10:09.820 End of National Prohibition and before National Prohibition for that matter, many states and 83 00:10:09.820 --> 00:10:17.780 local government jurisdictions prohibited sales of alcoholic beverages or they restricted 84 00:10:17.780 --> 00:10:24.740 sales such as not allowing sales on Sunday even if it were legally permissible on other 85 00:10:24.740 --> 00:10:26.700 days of the week. 86 00:10:26.700 --> 00:10:35.740 So Bruce said, we've got the Baptists, and they appear to be the ones that are backing 87 00:10:35.740 --> 00:10:39.180 these alcohol prohibitions. 88 00:10:39.180 --> 00:10:45.100 And sure enough, you know, the Baptists weren't ashamed of their faith. 89 00:10:45.100 --> 00:10:51.660 They would be very happy to stand up in public or even in a meeting of the state legislature, 90 00:11:21.660 --> 00:11:28.720 alcohol prohibitions, you might soon come in places like the South, where there were 91 00:11:28.720 --> 00:11:35.760 lots of Baptists and they therefore had some political clout, you would find the bootleggers. 92 00:11:35.760 --> 00:11:44.040 Because whenever government forbids commerce in some good or service that people really 93 00:11:44.040 --> 00:11:49.720 demand, people are going to look for a way to satisfy their demands. And if they have 94 00:11:49.720 --> 00:11:59.720 So when you make prohibitions on commerce and alcoholic beverages, you have bootleggers. 95 00:11:59.720 --> 00:12:05.720 And of course, during prohibition in the 1920s, we had tremendous involvement of organized crime. 96 00:12:05.720 --> 00:12:10.720 Because, you know, they stand ready to involve themselves in illegal activities. That's what they do. 97 00:12:10.720 --> 00:12:13.720 That's how, in large part, they make their money. 98 00:12:13.720 --> 00:12:20.120 So Bruce said what happens here is you have a de facto alliance. The bootleggers and the 99 00:12:20.120 --> 00:12:24.900 Baptists are in fact pushing for the same thing. The bootleggers want these alcohol 100 00:12:24.900 --> 00:12:32.300 prohibitions because that's what spills over into a demand for their supplies. If alcohol 101 00:12:32.300 --> 00:12:36.700 sales were completely legal, people would probably buy it, you know, it's cheap legal 102 00:12:36.700 --> 00:12:42.580 sellers rather than maybe paying a little more for bootleg product which is higher price 103 00:12:42.580 --> 00:12:43.380 and the 104 00:12:43.380 --> 00:12:48.740 risk associated with producing and distributing illegal product and 105 00:12:48.740 --> 00:12:54.260 and that adds to the to the cost and into the ultimate price of the product so 106 00:12:54.260 --> 00:12:58.100 so a lot of times you have bootleggers and Baptists working 107 00:12:58.100 --> 00:13:03.220 and this has become a metaphor and in the case of the ethanol program you had 108 00:13:03.220 --> 00:13:09.300 originally a lot of environmentalists and they were they were the Baptists here 109 00:13:09.300 --> 00:13:15.060 because they look like zealots that despise the automobile and they despise the internal 110 00:13:15.060 --> 00:13:19.620 combustion and they despise petroleum and its products, all of which were connected 111 00:13:19.620 --> 00:13:24.540 with what they viewed as the despoiling the planet. 112 00:13:24.540 --> 00:13:31.220 So they wanted to somehow get away from the automobile and the truck and all of these 113 00:14:01.220 --> 00:14:09.460 People that saw a chance to produce alternative fuels rushed into that opening and made their 114 00:14:09.460 --> 00:14:15.380 own voices known in the political process, made their own money felt by the politicians 115 00:14:15.380 --> 00:14:19.100 who had some power to decide these policies. 116 00:14:19.100 --> 00:14:26.660 So now we've got our own bootleggers and Baptists in the ethanol situation. 117 00:14:26.660 --> 00:14:35.700 All those people who produce ethanol or indirectly benefit from its production and all these 118 00:14:35.700 --> 00:14:46.100 zealots who at least in the beginning favored the ethanol program because it would be a 119 00:14:46.100 --> 00:14:54.620 slam against oil and oil burning vehicles. 120 00:14:54.620 --> 00:15:02.300 Well, as often happens, you have changes, and conditions may change in a way that makes 121 00:15:02.300 --> 00:15:08.560 it appear that a policy that was created is no longer politically viable, no longer has 122 00:15:08.560 --> 00:15:13.620 the same support, and that happened in the ethanol case, because the environmentalists 123 00:15:13.620 --> 00:15:21.020 began after a while to see that ethanol production and use was actually, as they saw it, harming 124 00:15:21.020 --> 00:15:26.100 in the environment. It wasn't the improvement that they thought it would be. They thought, 125 00:15:26.100 --> 00:15:31.700 oh, anything you do to reduce the use of oil products is good for the environment. But 126 00:15:31.700 --> 00:15:38.220 then they discovered that when you encourage ethanol production by subsidizing it, and 127 00:15:38.220 --> 00:15:45.220 therefore that spilled over into the demand for ethanol inputs, namely corn for the most 128 00:15:45.220 --> 00:15:52.500 in this part, the farmers grew more corn using more pesticide and more fertilizer and there's 129 00:15:52.500 --> 00:15:57.720 more runoff of these things into the waterways and so that was bad for the environment. 130 00:15:57.720 --> 00:16:03.680 So ultimately they turned against the ethanol program and recently they've politic actively 131 00:16:03.680 --> 00:16:12.560 in opposition to it and sought to end this subsidy but subsidies once put into play are 132 00:16:12.560 --> 00:16:17.200 are difficult to eliminate. 133 00:16:17.200 --> 00:16:22.060 Because of a number of things, one is there's simply political entrenchment. 134 00:16:22.060 --> 00:16:28.940 The people who benefit from a policy become closely connected with the people who sustain 135 00:16:28.940 --> 00:16:32.620 it in the Congress or the state legislature. 136 00:16:32.620 --> 00:16:38.460 They donate to politicians financially and they support them in other ways. 137 00:16:38.460 --> 00:16:42.420 And so politicians don't want to give up that support and benefit. 138 00:16:42.420 --> 00:16:58.420 The Transitional Gains Trap 139 00:17:12.420 --> 00:17:25.420 And as a result, that asset becomes more valuable. People are willing to pay more for an asset when it has an additional stream of income associated with its ownership. 140 00:17:25.420 --> 00:17:34.420 So if you subsidize, say, corn, land suitable for growing corn is bid up in the market. If you subsidize ethanol, 141 00:17:34.420 --> 00:17:42.420 These plants that are built to produce ethanol certainly have a higher value than they would have without the subsidy. 142 00:17:42.420 --> 00:17:47.420 In fact, in this case, they would probably have almost no value except junk value. 143 00:17:47.420 --> 00:17:50.420 You know, hauling away the metal and crushing it up. 144 00:17:50.420 --> 00:17:55.420 Because this entire ethanol industry is the product of the subsidies. 145 00:17:55.420 --> 00:18:01.420 It barely existed before these subsidies were put into operation. 146 00:18:01.420 --> 00:18:11.820 But, if you create an asset, if you create an additional revenue stream and cause the value of assets to be bid up, 147 00:18:11.820 --> 00:18:18.520 then people who come along and get into the business later, you know, they have to pay that higher asset value to enter the business. 148 00:18:18.520 --> 00:18:25.120 Even if there's no special gain to them, even if, you know, now, even with the subsidy coming to them, 149 00:18:25.120 --> 00:18:29.120 they don't make an unusual rate of return on producing ethanol. 150 00:18:29.120 --> 00:18:34.080 They had to pay to get that revenue stream, so we say that that revenue stream has been 151 00:18:34.080 --> 00:18:38.960 capitalized into the price of the asset. 152 00:18:38.960 --> 00:18:45.240 And because they've paid for it, they sure as hell don't want it taken away from them. 153 00:18:45.240 --> 00:18:48.600 They could say, well, we're not guilty of this. 154 00:18:48.600 --> 00:18:53.840 I paid full price for this asset and now if you remove the subsidy, you're going to remove 155 00:18:53.840 --> 00:19:00.080 You have a revenue stream flowing to this asset, and you're going to hurt me. 156 00:19:00.080 --> 00:19:06.080 And so when people anticipate economic hurt, they fight against it. 157 00:19:06.080 --> 00:19:13.760 So once you create a government benefit of any kind, you create a potential transitional 158 00:19:13.760 --> 00:19:15.400 gains trap. 159 00:19:15.400 --> 00:19:17.800 You get into something, you can't get out of it. 160 00:19:17.800 --> 00:19:19.780 That's the trap, okay? 161 00:19:19.780 --> 00:19:24.540 And so you have, for this and other reasons, you have a kind of ratchet effect, as I call 162 00:19:24.540 --> 00:19:28.460 it, in the expansion of government power. 163 00:19:28.460 --> 00:19:34.740 Government power is easier to increase than it is to diminish once it's been created. 164 00:19:34.740 --> 00:19:37.660 And this takes countless forms. 165 00:19:37.660 --> 00:19:42.800 But it's certainly taken that form in the ethanol case. 166 00:19:42.800 --> 00:19:48.120 And of course, at the end of the day, what we have here is a situation very much like 167 00:19:48.120 --> 00:19:54.800 and others, in which the benefits of this program are highly concentrated, pretty much 168 00:19:54.800 --> 00:20:02.560 just in the form of continued flow of revenue, mostly through tax credits, to people who 169 00:20:02.560 --> 00:20:09.720 produce ethanol or purchase it and use it for blending in fuels, which the law also 170 00:20:09.720 --> 00:20:13.020 requires them to do in certain amounts. 171 00:20:13.020 --> 00:20:31.320 So there's a mandate to use ethanol, and on top of that, the people who buy it and use it are subsidized to do so with a tax subsidy and other subsidies. 172 00:20:31.320 --> 00:20:37.520 There's a whole list of ethanol-related subsidies in operation, some federal, some state. 173 00:20:37.520 --> 00:20:44.360 And all of the states have some form of activity that has the effect of subsidizing the use 174 00:20:44.360 --> 00:20:45.680 of ethanol. 175 00:20:45.680 --> 00:20:49.300 But the upshot of this is we have a massive amount of loss. 176 00:20:49.300 --> 00:20:54.480 The ethanol subsidies are worth about $6 billion a year right now. 177 00:20:54.480 --> 00:20:58.120 And they're going to stay there or grow even. 178 00:20:58.120 --> 00:21:04.060 And this is the loss of taxpayers, loss of consumers. 179 00:21:04.060 --> 00:21:11.340 The ethanol blended gasoline gets worse mileage when you burn it in your car or your truck, 180 00:21:11.340 --> 00:21:17.380 and as a result you end up burning more fuel than you would otherwise to go the same distance. 181 00:21:17.380 --> 00:21:22.500 So it's kind of another way of offsetting any gain that the old environmentalist thought 182 00:21:22.500 --> 00:21:28.140 would flow from using ethanol instead of petroleum-based fuel. 183 00:21:28.140 --> 00:21:34.020 And the whole thing is just a disaster, but it seems impossible now to get rid of it. 184 00:21:34.020 --> 00:21:41.420 In fact, it just happened yesterday, I pulled up an article from The Guardian in the UK, 185 00:21:41.420 --> 00:21:47.820 and one of the sentences here says, the ethanol mania has verged on the bizarre. 186 00:21:47.820 --> 00:21:49.180 And that's certainly true. 187 00:21:49.180 --> 00:21:54.940 When you look at this, it's now at the point where the environmentalists hate it, the consumers 188 00:21:54.940 --> 00:22:01.420 hate it, people who drive cars and trucks hate it, you know, tout le monde hates this 189 00:22:01.420 --> 00:22:07.900 This thing, but you've got a handful of producers who own these ethanol plants. They're now 190 00:22:07.900 --> 00:22:13.940 somewhat more than 200 of them in the country, most of them here in the Midwest. And you've 191 00:22:13.940 --> 00:22:20.980 got a larger number of corn farmers. And these are the principal beneficiaries of these subsets. 192 00:22:20.980 --> 00:22:26.020 In fact, it's pretty hard to find anybody else who's gained, except perhaps a few input 193 00:22:26.020 --> 00:22:34.440 Suppliers for these people. But it's bizarre that this thing exists. Now, people are now 194 00:22:34.440 --> 00:22:41.620 trying to get rid of it. And in fact, there was a move when it was renewed at the end 195 00:22:41.620 --> 00:22:48.400 of last year in Congress that kept it from being renewed for five years, which is what 196 00:22:48.400 --> 00:22:59.720 looked as if would follow, but Senator Feinstein and Senator Kyle and about 15 other senators 197 00:22:59.720 --> 00:23:09.000 joined forces to work in opposition to the renewal of the ethanol subsidies. 198 00:23:09.000 --> 00:23:14.000 They were not successful, but what happened is that the subsidies, the main one, was renewed 199 00:23:14.000 --> 00:23:16.960 only for one year rather than five. 200 00:23:16.960 --> 00:23:24.400 So this battle is going to come up again in about 7 months and have to be re-fought again. 201 00:23:24.400 --> 00:23:30.200 And it may be that one of these days the political forces that oppose this subsidy will succeed 202 00:23:30.200 --> 00:23:32.400 in getting it tossed out. 203 00:23:32.400 --> 00:23:40.400 But meanwhile, those who are keeping it alive, you might be able to guess pretty much all 204 00:23:40.400 --> 00:23:49.840 The senators and representatives from the corn-growing states have lined up to back 205 00:23:49.840 --> 00:24:04.560 this program and in fact I found a study by a website called Open Secrets Blog which tracks 206 00:24:04.560 --> 00:24:21.100 There's a lot of money flowing to politicians from various organized groups and other donors and it turns out there's a lobby, you would expect that the senators are collecting very large amounts of donations from 207 00:24:21.100 --> 00:24:28.860 Arthur Daniels Midland, National Corn Growers Association, an outfit called POET, which 208 00:24:28.860 --> 00:24:35.120 is an ethanol producer, from something called Growth Energy, that's another one of them, 209 00:24:35.120 --> 00:24:40.700 and from Iowa Renewable Fuels Association, so you know, all the direct beneficiaries 210 00:24:40.700 --> 00:24:48.760 of this program are lined up giving tons of money to Chuck Grassley, who's the committee 211 00:24:48.760 --> 00:24:53.240 Chairman that deals with these things, so he gets the most. 212 00:24:53.240 --> 00:25:00.120 But then you have a bunch of other senators and representatives also raking in extraordinarily 213 00:25:00.120 --> 00:25:06.440 large amounts of money from these same interested, organized political groups. 214 00:25:06.440 --> 00:25:13.320 And on the other hand, you have these people I mentioned, the Feinstein-Kyle faction that 215 00:25:13.320 --> 00:25:43.320 have expressed its opposition recently, and if you look at where their money comes from, voila, of course, they don't get much money at all from these groups like the National Corn Growers and the ethanol producers associations and what have you, so it's just a classroom illustration of concentrated benefits, dispersed costs, a lot of ideological smoke being blown, 216 00:25:43.320 --> 00:26:13.320 across the whole undertaking as usual because nobody wants to come out and say look we're robbing you and we can do it so we're gonna they never say that they they always give you these reasons and and they're still standing up in public and talking about how this ethanol subsidy is great for the environment even though the environmentalist groups no longer agree but when Chuck Grassley gives a talk he talks about how great it is 217 00:26:13.320 --> 00:26:18.680 is for the Environment, and how it produces jobs, and every time you say the magic word 218 00:26:18.680 --> 00:26:25.560 jobs, you know, people fall down like they're having an epileptic seizure, and politicians 219 00:26:25.560 --> 00:26:34.680 know that, so they keep expressing the mantra jobs, jobs, jobs. It's like one of Bob Murphy's 220 00:26:34.680 --> 00:26:49.480 and the job zombie is at work here defending this program and also the talk about the programs 221 00:26:49.480 --> 00:26:52.040 creating market stability. 222 00:26:52.040 --> 00:26:59.440 And this is another one of the excuses that have been trotted out time and again to justify 223 00:26:59.440 --> 00:27:07.800 by Agricultural Subsidies, going back certainly to the 1920s and 30s, the idea that if markets 224 00:27:07.800 --> 00:27:13.280 are left to themselves, there's so much volatility that it's horrible. It's horrible not only 225 00:27:13.280 --> 00:27:17.880 for the producers, it's horrible for the consumers. They never know what the price is going to 226 00:27:17.880 --> 00:27:24.420 be for the product, so government can intervene and produce stability. Well, my advice to 227 00:27:24.420 --> 00:27:30.220 to you is whenever you hear anything in politics justified on the grounds that it's there 228 00:27:30.220 --> 00:27:36.500 to produce stability and I don't care whether we're talking about foreign policy or ag policy, 229 00:27:36.500 --> 00:27:43.500 you know you're being taken in. That's not what it's for. Follow the money. Thanks.