Ethanol and 'Intellectual Honesty'

A War of Letters has broken out between the ethanol-loving Sen. Chuck Grassley, R-Iowa, and the ethanol-hating Grocery Manufacturers Association. Most recently, Grassley wrote to the GMA demanding to know when the food industry is going to lower prices now that input costs like farm commodities and energy have fallen so far, so fast.

The answer, of course, is that food companies will keep their prices as high as they can for as long as they can. When consumer demand falls to a certain point, prices will come down.

Grassley's hectoring (PDF), of course, actually has little to do with his concern over high food prices and everything to do with protecting his pet industry: corn-based ethanol, which just now is having serious trouble despite all of the government's efforts to prop it up.

The letter-writing began last May, when Grassley, sounding disturbingly like ragemonger Bill O'Reilly, accused the GMA of conducting a "smear campaign" against ethanol.

Corn-based ethanol tends to make food prices rise - by how much is the subject of much debate, but basic economic laws dictate that it is so. The GMA has been wildly overstating the effect in a typically disingenuous multimillion-dollar public-relations campaign that aims to cut back federal ethanol mandates. The newspaper Roll Call in May had outed (pdf) the GMA as the campaign's puppetmaster.

So Grassley decided to wildly overstate them right back, repeating his typically disingenuous pro-ethanol talking points, and adding a new, somewhat weird twist: he characterized the ethanol industry, which receives billions of dollars of government support, as a put-upon victim.

Ethanol, he wrote, was "being made the scapegoat for a whole variety of problems.  Never before have the virtuous benefits of ethanol and renewable fuels been so questioned and criticized."

Poor, poor ethanol. Even weirder, Grassley wrote that until the GMA started being mean to ethanol in 2008, he had never heard a peep of complaint. "For all these years," he wrote, "we've hardly heard anything negative about these policies." Actually, for all those years, Grassley was successfully championing legislation to bestow massive government subsidies on ethanol, and drawing plenty of complaints for it.

In his latest letter to the GMA, Grassley pleaded for "intellectual honesty regarding ethanol and its role in the economy." You first, Senator.