Texas and the Ethanol Dilemma

According to this article from Reuters Texas is seeking for a cutback in the amount of ethanol mandated to be produced. The purpose is to ease food prices. The problem is that the ethanol mandate is designed to push the U.S. past food derived ethanol. Cutting the amount of ethanol in mandated as suggested by the Governor of Texas would have worse effects than leaving it in place. The purpose of the mandate is to force the technology for cellulosic ethanol to be developed. It would not be cost effective to produce 7.5 billion gallons by 2012 out of corn. Do so would increase the demand for corn to unheard of levels and raise the price of corn so high it would not be worth it to make fuel.

So, the mandate should force cellulosic ethanol to replace corn-based ethanol in the long term. In the short term though it seems food prices will just keep climbing and put the pinch on lower income households. One thought that I guess did not occur to Gov. Perry is that Texas is one of the few states that can produce sugar beets year round. On top of that ethanol from sugar beets is cheaper to produce than from corn. In conclusion it appears to me that instead of attacking the ethanol mandate Texas should be using it to create jobs in sugar beet processing. This will take some of the pressure off of corn (not a complete solution to the food crisis as farmland is still being used to produce fuel) by providing alternative methods of ethanol production. So in the near-term corn prices should at least increase slower while the mandate already in place will encourage cellulosic ethanol processes in the longer term. What do you think?

The Biggest Problem Facing the Federal Government

1. Healthcare

2. The War in Iraq

3. National Debt

4. Mortgage Crisis

5. Taxes

6. Iran's Nuclear Government

7. Education

8. Immigration

9. Global Warming

10. Terrorism

These are probably the 10 biggest problems that come to mind (in no particular order). If this is true the problems seem almost too complex to solve due to the interactions of each issue and how altering one system creates new changes in all related systems. An example of this:

Providing amnesty new large amounts of immigrants creates strains on the healthcare and education systems, which would require more infrastructure to be built such as more grade schools to educate them and hospitals to treat them, which would have to be paid for taxes and/or bonds, either of which would affect the tax system or the national debt. Also, there would be a shortage of trained teachers and healthcare professionals so more immigrants would be required to fill the gaps and the cycle could start all over again.

With each interlocking piece the puzzle becomes more complex. The way to exploit this is to break it all down to the simplest, underlying issue. In this case one word can sum it all up: goals

Goal-setting and goal-oriented are two requirements found on most job ads (don’t believe me? Search monster.com). This doesn’t just mean setting a vague, “aspirational” goals, it means setting precise, quantitative goals and a plan to achieve it. The federal government (and many state governments) does not follow this policy even though any corporation that wants to remain competitive does. An example of this:

The Department of Education’s mission as quoted from the website is “to promote student achievement and preparation and ensuring equal access.” This is a great goal but the problem with it is how do you measure progress towards achieving it, how do you know if education is improving or falling apart, how do you tell what is holding back the current level of education from being even better. In contrast, a CEO has to provide a plan (including concrete steps and benchmarks) to board members on how he/she is to improve the competitiveness of a company.

An issue that may be brought up is that not every department needs to improve. This is dangerously wrong because we always need to be moving forward and there are very few things we do better than no one else and there is always room for improvement.

The benefits achieved from this type of reform would be numerous. This system would provide a results oriented central government. Citizens should embrace it because it provides a purpose for the tax dollars the government collects. Political parties would benefit because they could directly compare the success of departments under presidents of different political parties. Even special interest groups should approve of this because they could merge their goals into the goal of the relevant department. If each president had to determine goals for each department, it would provide an open channel for concrete reforms. It would also be easier for undecided voters to choose a candidate because rather than seeing how candidates stand on isolated issues it would let the voters see the more comprehensive direction that candidate would take the country.

But this is just one stranger’s rambling thoughts. It’s a free country; voice your opinion on the subject.