Some news that will give you fits

By Michael Raffety

6-29-15

All the people running for president are being put on the spot when they come to Iowa. The big question is where they stand on ethanol. It is not ethyl and it is not high octane. And gas stations don’t give away glasses anymore. Ethanol is a worthless additive made from corn. It might as well be cornpone.

Corn farmers these days are doing pretty well just selling corn for export and livestock feed. In fact, all kinds of livestock would be more affordable once it gets through the butcher and arrives at the grocery store if the corn weren’t sidetracked for processing into ethanol.

Ethanol in gasoline reduces the efficiency of gasoline and can deteriorate engine parts. The original theory was to reduce oil imports. The Bakken shale formation and Eagle Ford shale in Texas have changed the dynamics to the point that America is the No. 1 oil producer in the world.

Part of the price of gasoline includes overpriced ethanol. It also includes RINs (Renewable Identification Numbers), which are credits refiners get for adding ethanol. June 12 the Wall Street Journal noted that last year 14 billion credits were generated. Last month the EPA proposed raising it to 16.3 billion this year and 17.4 billion he following year.

The cornpone politicos and environmentalists say this isn’t enough. They want more, more, more. These RINs are traded by private contracts at an average of 60 cents, more recently slipping to 30 cents. Refiners can’t add more than 10 percent ethanol. When the EPA cranks up the blend percentage higher than 10 percent then the refiners have to buy credits.

Valero spent $372 million on RINs in 2014 and $517 million in 2013. Its earnings in 2014 were $3.5 billion. “The expense gets passed along. They go into fuel prices,” a Valero spokesman told the WSJ.

So, we are paying at the pump to elect he next president.

. . .

Here’s a scary tidbit from Wall Street Journal columnist Holman W. Jenkins Jr. June 6. Vladimir Putin recently issued a decree drafting youth to serve in military production plants.

“According to Moscow’s Gaidar Institute, military spending since 2010 has doubled, and accelerated even faster since the Ukraine war. Defense spending now accounts for 35 percent of government outlays, about 14 percent of gross domestic product, (The U.S., with the largest military in the world and its global responsibilities, spends less than 4 percent of GDP.),” Jenkins wrote.

Drafting young people for defense industries sounds ominous. Jenkins drew parallels with Nazi Germany pulling itself out of the Depression by rearming itself. Oh, and add in the takeover of Crimea with nothing but economic sanctions and Putin is pulling the full Adolph.

He has his eye on more than Ukraine.

. . .

Finally there is our president’s “strategy” for ISIS. Just to clarify, we are not talking about the Egyptian goddess. We’re talking about the horror state spreading from Syria through a big chunk of Iraq. The president recently sent 450 more training troops in addition to the 3,100 already in Iraq training Iraqi soldiers.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, calls this the “lilly pad” strategy. Whenever President Obama approves another 500 training troops Dempsey will set them up in a forward training base.

Dempsey is clearly no Gen. Fred Franks or Norman Schwazkopf. I’m no military strategist but, lilly pads sound more cute than tactical. Calling it a strategy is like calling ”Mr. Toad’s Wild Ride” at Disneyland a military training exercise.

Ribbit.

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