Wednesday, April 25, 2007

Corn and Corruption

The president’s last state of the union address promoted using ethanol to “cut” gasoline, reducing the country’s consumption of oil, and a congressional bill soon followed. The ethanol would come from corn grown in the Midwest. Everybody wins.

Or do they? Since the announcement that the U.S. is going aggressively after corn-based ethanol, corn prices have skyrocketed around the world as food shortages are anticipated (Wall Street Journal 4/9/07 pp. 1, 9). “…corn ethanol is causing Marin Dairy Farmers to be unable to pay the increase in feed corn from $2.00 a bushel in September of 06 to $4.00 a bushel now [Jan., 2007], according to the Marin Independent Journal” ( ).

Who benefits? Corn farmers benefit, especially the big ones, like Archer Daniels Midland (ADM), ConAgra, Cargill, and many other huge corporations in the agriculture and food processing industries. Not only will they benefit from increased demand, but also from huge taxpayer handouts. The U.S. government subsidizes corn, to the tune of $9.5 billion in 2005 alone (that’s million with a “B”), 51 billion dollars in subsidies since 1995 ( ).

Who are the recipients of this largesse? Not charming little farms run by Norman Rockwell’s descendents. Companies like Cenex, Inc., the energy division of CHS corporation, an American manufacturer of corn tortillas among other products (latest half yearly profit of $219 million) ( ). CHS-Cenex is the main stakeholder in Minnesota-based Harvest States Cooperative, which has received $14.5 million in corn subsidies since 1995. And let’s not get into the subsidies they also pulled down on soybeans, wheat, barley, and other crops to the tune of $50 million in taxpayer money. And that’s just one, single recipient of these government crop subsidies. There were 1.5 million recipients since 1995 (

Big agriculture loves this scheme. According to the CATO institute, “Most expensive is Washington's 54 cent-per-gallon tax break for gasohol. This special-interest loophole accounts for the bulk of the more than $10 billion in subsidies to ADM since 1980. All told, analyst James Bovard estimates that every dollar in profits earned by ADM costs taxpayers $30.” ( ) (see also “How ADM makes a killing on ethanol, NY Times, June 25, 2006.”)

The top five corn-producing states are (Iowa, Illinois, Nebraska, Minnesota, and Indiana ( ). It wouldn’t take much detective work to conclude that the lion’s share of government farm subsidy for corn goes to these states.

And isn’t it fascinating that agribusiness ranks eleventh among all political action committees in donating money to congressional candidates, $44.6 million in 2005 alone (which was not even an election year), 68% of it to Republicans, the rest to Democrats. ( Somebody with journalistic skill and perseverance could follow this money trail to the end by checking the elected officials in the top corn states and where their campaign contributions came from ( ). I haven’t got the patience or the stomach. But it would not surprise me to learn that the corn states were well-represented among senate and house members who voted for the corn-ethanol bill. Mutual back-scratching. Or is that symbiosis?

But let’s not forget the oil companies. They benefit too, even though the goal is to reduce consumption of gasoline. How so? They get huge government subsidies for the gesture of adding ethanol to their product. In California alone, big oil refineries collect about 500 million dollars a year for the service of adding 5.6% ethanol to their gas. ( )

But surely, one might think, it is all worthwhile to save the planet! Ethanol produces only water as exhaust from the tailpipe. That has got to be better for global warming, right? Not really. Ramping up ethanol production, will cut greenhouse gases by 2/10 of 1% by 2017. Not much, but that’s something, at least, isn't it? Step in the right direction and all that?

But according to Slate online ( ) “making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains.” If you count the coal and gas that have to be burned to get the ethanol out of the corn, it is a net increase, not decrease, in fossil fuel consumption. Burning ethanol as a gasoline additive actually results in a net energy loss of 65 percent ( ).

But won’t improved technology increase the energy yield of ethanol over time? No. Ethanol simply has less energy than gasoline so you actually get fewer mpg out of your car when you use it. The original model T Ford ran on ethanol. Nothing has changed in the physics of its combustion. “If you get 30 mpg on gas, you'd get 20 mpg on pure ethanol. It has less than 2/3 the energy-per-gallon of gasoline. That's physics. EPA has measured every type of flexible-fuel car in the US fleet, and that's how it turned out in reality.” ( ).

The outlook for ethanol is only slightly better if we look to sugar-cane or other biomass stock. But converting corn, a basic foodstuff, to transportation fuel, makes no economic or environmental sense at all. Its promotion by our government represents either unfathomable stupidity or blatant venality. Hard to decide.

Thursday, April 5, 2007

Diplomacy: Negotiation or Theater?

On the PBS news broadcast, The News Hour, Margaret Warner interviewed Trita Parsi, a lecturer at Johns Hopkins, about the recent release of 15 captured British sailors from Teheran ( middle_east/jan-june07/iran_04-04.html, April 4, 2007)

Parsi is an Iranian citizen and president of the National Iranian American Council, a nonprofit educational organization based in Washington, D.C.

Margaret asked Parsi for a synopsis of the event, to which he replied,

“[Britain] started making rather strong statements publicly, increased the pressure, went to the Security Council, but then didn't manage to get what it wanted from the Security Council or from Europe.

And that, I think, caused this issue to become much more complicated, because the Iranians are very, very eager to make sure that the outside world understands that they do not respond to pressure.”

“…the Brits eventually came and negotiated with Iran using a completely different language and turning the issue into a bilateral issue, rather than relying on the pressure that the Security Council potentially could put on Iran.

And that, I think, is the key signal that the Iranians wants to send out. There's two ways to deal with Iran. One is through pressure, and one is through diplomacy. The first one doesn't work; the second one did work this time.”

So according to Parsi, diplomacy and “pressure” are opposing techniques. With Iran, one works and one doesn’t. But is that really the lesson to be drawn?

Pressure is coercion, an attempt by one party to force compliance by behavioral imposition on the other, such as with military force or economic restrictions. Pressure can be successful. Japan surrendered after WWII and changed its behavior. But behavioral compliance does not necessarily involve changed beliefs, attitudes, and intentions. Germany surrendered after WWI but that didn’t put an end to things.

Diplomacy, on the other hand, is negotiation, that is, talk aimed at mutual agreement; some compromise or settlement. It is a meeting of the minds. It may entail behavioral change: I’ll do this if you do that. But it is above all, a mutual understanding based on each party’s acknowledgement of the other’s position.

A kidnapper calls and demands a million dollar ransom or he will kill your loved one. You agree to cooperate. The handoff is arranged, and you are reunited with your loved one. The kidnapper becomes rich. Was that a negotiation, a meeting of minds?

In a superficial sense it was a negotiation. The two parties spoke and each understood the other’s needs and intentions. It was agreed by both sides that “If you do this, I’ll do that.” A transaction followed and a deal was completed.

Yet that scenario is not discriminable from coercion. A mugger can hold a gun to your head and extend his other hand to receive your wallet. Without a word being spoken, you can sacrifice your wallet and live to tell about it. Is that a negotiation? Hardly.

Somebody famous once said, “War is diplomacy by other means.” In other words, coercion by physical or economic force is a type of communication. Both sides recognize each other’s intentions and desires.

Kidnapping is a kind of communication. It is a well-defined social act that “sends a message.” But if Iranian Revolutionary Guards kidnap British sailors from Iraqi waters, then lie about what they did, making it out to be an act of self-defense, then what is their message? They deny they are following the kidnap script. They insist that the British follow their contrived self-defense script, which would force the British to assume the role of aggressor (which historically it was, in Iran).

This is symbolic drama, performance art, not negotiation in good faith. Mutually understood scripts for social interaction are invoked, but there is no agreement on which script is appropriate. Teheran thus pretends to negotiate while stonewalling negotiation.

The British could respond by offering to bring tents, blankets and bottled water to Teheran. But that’s part of a disaster relief script, not appropriate here. An offer of disaster relief would be language; technically be a communication, but could not be part of this negotiation. It also would be a wrong script.

A genuine negotiation requires that each side acknowledge the actual needs and intentions of the other. Pulling out a pre-prepared dramatic script and reading from it does not constitute acknowledgment of the other side, so no negotiation is possible.

How was this situation resolved? We don’t know. Maybe we never will. The British and their allies might have exerted extraordinary threats of coercive pressure on Iran (in private) that caused it to change its public behavior. That seems most likely to me. Or, the British might have pulled out a compromise script (in private) that said, “Oh, was that your territorial water? Our mistake. No offense intended.” That might have satisfied the Iranians, although I doubt it.

Now getting back to Parsi’s insistence that pressure doesn’t work on Iran, but diplomacy does: It sounds like he is defending Teheran’s tactic of reading from an inappropriate script, and calling that diplomacy. If Parsi believes that the British should have acquiesced to reading from that script, he is either ignorant of what negotiation is about, or, more likely, he is an Iranian partisan.