Nathalie Heidema, Chapter 8, Question 6

A passage that interested me was about ethanol. Gasoline with ethanol is taxed 5.4 cent less that pure gasoline because it was believed that it burns more cleanly and it also makes us less dependent from foreign oil, so it was subsidized by the government. Actually, a study showed that ethanol can even contribute to ozone problem and the corn farming, which provides ethanol uses fertilizers and pesticides which also harm the environment. It cost the Treasury $7.1 billion to provide the subsidy. However, this theme became crucial when it came to politics- especially Iowa campaigns. The farmers wanted the subsidies and as we learned in this chapter, small, organized groups can be pretty effective when they want to achieve something. They benefited a lot from the subsidy (30 cents were added to every bushel sold) but us, the remaining 98 percent, do not really notice the pennies of our taxes that go to them, we are usually ignorant. And so when politicians concentrate on a specific group and their interest, they can easily get their votes by promising them benefits, like the corn subsidy here. By the way, Obama was a ethanol subsidy supporter, John McCain wasn't.