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Advisor

strategically speaking

https://www.politico.com/story/2019/08/20/donald-trump-gop-donors-recession-1470360?fbclid=IwAR0OlLL...

in the most cynical terms, it would be to the Dennison Team's advantage to have a shallow, brief recession now and force D's into busting the budget some more to cover for their failed policies.

If you've noticed, in the past few years almost every major economic number has later been revised downward. They aren't terrible but not great and each positive initial headline number has been met with ebullience by Wall Street.

Why not release the initial  numbers with a bit of the opposite bias- like GDP down a half point, rather than up a half point to be revised back later?

You really can't monkey with economic numbers a whole lot because pretty soon you're way out in the weeds. But you can certainly massage the initial release.

Remember, you heard it here first.

7 Replies
Advisor

Re: strategically speaking

In that scenario you'd also have to assume that their present take on data they're seeing isn't positive.

Although as John McCain famously said in 2008 "our economy is fundamentally strong."

Honored Advisor

Re: strategically speaking

My my, you changed your narrative along with your handle change.  The old "Hardnox" would claim George W Bush stroked ethanol to win the 2004 election and "ethanol is a net energy loser"  "EROEI !  EROEI !".   But now as sdholloway56  we need to start calling you "Mr Ethanol".    Hmmm I wonder why?

Any way, President Trump is walking a tight rope that I`m sure you won`t appreciate.  He has the goal of US energy independence, while keeping small refineries in business all the while keeping his corn farmer base solvent. 

The old "Hardnox" was pushing the "peak oil" theory too back in the day, so I suppose grasping at straws and crawling in bed with the ethanol industry is now the last bastion.   Get a "Kamala Harris" in office and it`ll be back to bashing ethanol.

Advisor

Re: strategically speaking

I've been consistently critical of the scale and construction of ethanol policy.

And it cannot be defended as an energy program, it is an environmental program.

9-12 b/g/y would have had approximately the same environmental benefit and would have still had a huge impact on agriculture, but a bit less of a crash after the sugar high.

I'll 100% stand by all of that.

But I've also said, every single time, that once you get near the 15 b/g/y goal it is cruel and unusual to back away from it.

 

Honored Advisor

Re: strategically speaking

When ethanol booms, corn goes up and popcorn in the movie theater goes up, eggs in the grocery store goes up and the big cattle feedlots scream bloody murder. But now with $50-$60 oil and still $3.50 corn and $2.50 gas at the pump it`s tough for the ethanol industry.  Bashing the president here and the market page is low hanging fruit for Democrat trolls.  But the economical math gets in the way of ethanol profits, oil and gasoline above $100 and +$3 gasoline is a drag on the larger economy...but for ethanol that`s about what it takes.

Advisor

Re: strategically speaking

The first rule of "agriculture" is don't speak any ill of ethanol.

But regardless, unless the goalposts could be perpetually moved, the cost structure was radically changed and some tough times were going to come out on the back side.

A good argument against government intervention in markets, no? The most preposterous part of the story was the cellulosic fable that was used to sell the first part. Which really doesn't change anything but the discussion of that makes people nervous. Probably one of the biggest busts of government  policy in history.

I'd say that government actually should kinda pick winners in terms of the most promising technologies to incubate. We actually went with cellulosic ethanol while China and Germany went with solar and wind.

Honored Advisor

Re: strategically speaking

And France went to nuclear.   Either the government should be all in with a price support/supply management program or get out of it completely.  None of this chasing our tail, setting policy on yesterday`s headlines.

Advisor

Re: strategically speaking

There's probably a place for some of the new nuke technology in a 21st Century generation mix. It requires some sort of a dependable base load.

The problem is the old ones, mostly well past their decommissioning dates, but the (mostly privatized) utilities that own them want consumers to keep paying for their higher priced power, which is threatened by cheaper renewables. 

Back to grain ethanol. The random confluence of factors that led to the ethanol program are very unlikely to ever come together again- MTBE failure and an oil price crisis.

Big Oil (blob) was happy to go along because it got them out of the MTBE debacle, and basically amounted to a long term commitment to liquid fuels.

If the market is permitted to perform, liquid fuel consumption should decline. That's the next challenge for ethanol- and a reasonable and realistic goal for the industry to set its sights on. It wouldn't hurt much of anything to judiciously up the blend rate, over time. Although a besieged oil industry won't like it.