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CNN Airs Glowing Review of Ethanol Boom in Iowa
Reporter Lothian leaves out how taxpayers are picking up a large part of the bill.

By Ken Shepherd
Business & Media Institute
June 9, 2006

     Paying the Price was the headline onscreen as CNNs Dan Lothian praised the booming ethanol industry in Iowa. Unfortunately for viewers, Lothians unbalanced report left out any mention of the high price taxpayers foot to subsidize ethanol.

     While Lothian hinted at a lot of debate over ethanol, he made clear his June 9 American Morning story wouldnt get into it. This is a story about how people in one state have grabbed on to ethanol and have created somewhat of a gold rush, Lothian added, introducing his taped segment from an ethanol plant in Mason City, Iowa.

     Lothians story was aglow with praise for ethanol, All across the heartland, a new crop is sprouting out of the ground and the harvest is golden, he cooed.

     Yet what Lothian left out is how the ethanol boom is financed by tax dollars and punitive tariffs which keep competition from foreign ethanol at bay.

     The Heritage Foundations Ben Lieberman wrote in April about how new mandates on ethanol use in gasoline drive up gas prices.

     The higher the level of production, the more pressure on corn prices, and the harder it is for ethanol producers to meet demand, Lieberman argued, adding that because ethanol cannot be distributed through pipelines, the cost of transporting it long distances will be high.

     A May 1, 2006 study by the George C. Marshall Institute found that even though American ethanol currently enjoys a $0.51/gallon subsidy, ethanol still costs more than gasoline while the $0.54-a-gallon tariff on foreign ethanol eliminates any economic benefit from increased exports.

     Washington Post business columnist Steven Pearlstein reported on May 24 that the wholesale price of ethanol has reached $2.90 a gallon or double what it was only a year ago.

     The bottom line: the real story Lothian missed is how Americans are paying the price to support an industry that would run out of gas without Big Governments support.