Ethanol Solutions

There are two issues that ethanol companies are pushing to become profitable in the near future, a blender pumps mandate, and an increase in the allowable ethanol blending standard from 10% to 15% ethanol blends.

Ethanol companies and corn lobbyists criticize large food producers such as Tyson Foods (corn is the largest input cost for chicken, pork and beef production) and oil companies such as Exxon for opposing any changes. The reasons for the opposition; ethanol creates higher food prices and lower oil profits.

In the crossfire between government subsidized industries, politicians must try to pick a winner between the three subsidized industries. Welcome to the future of government owned enterprises. For all intents and purposes, private investments in government subsidized industries are also subsidized by politicians.

This is the very scary place we find ourselves in. We need to set up ground rules for private investments in government subsidized businesses.

Here is the framework of legislation that should be considered.

First, any industry that is subsidized, through the use of mandate, tax credit, or government favoritism, must be recognized and submit to the following rules.

1. All industries must submit to unionization of the labor force. A mandatory 60 hour work week will be required with overtime pay beginning at 60 hours.

2. All health care expenses must be run through the same health care plan as the US Congress. The US Congress shall change their health care into a high deductible catastrophic policy with medical savings accounts as a required component of 3/5 of the deductible level. This shall be the policy experiment for a national health care plan experiment.

3. All industries must pay executives and lobbyists no more than 4 times the hourly earnings of the lowest paid employee in the industry.  Lobbyists must place 25% of their earnings into the energy savings bonds as described below.

4. All capital investments and investor income must be recognized on a 5 year running average of forward earnings. Basically I am tired of people making large amounts of money on government subsidies.

5. No company will be allowed to trade publicly for 5 years, and no return on investment shall be paid for 5 years after initial public offering.

6. All investments will be conducted in the form of debt or direct ownership. No equities will be allowed.

In return for investing in alternative energy technology, the government should allow investors to receive up to a 10% tax discount on other federal tax liabilities. Whatever incentive you have for encouraging investments in alternative energy, it should be run by an energy policy blue ribbon commission with the power to disperse money in a very transparent way. These investments should be raised by offering tax incentives for energy independent bonds with all investments made in a very transparent process. An idea would be to have an online auction of bonds of pre-approved companies with willing buyers able to select the technology they would like to invest in. All financial and personnel information on firms receiving money must be published with the amounts of salaries being paid to each person receiving that money. These financial statements must be publicly analyzed in order to receive additional funding.