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Jan. 12
Charleston (West Virginia) Daily Mail, on misguided congressional economics:
Congressmen should act like physicians when they tend the national economy — and first do no harm. But over and over again, legislative prescriptions imposed by policymakers in Washington have poisoned the economy. Take the Biomass Crop Assistance Program, a half-billion-dollar subsidy program included in the 2008 farm bill. The provision encourages sawmills and lumber companies to sell their "waste" for conversion into biofuels.
What was overlooked was that some "waste" — like sawdust — was actually being sold, in this case to composite wood manufacturers. They make panels for home entertainment centers and kitchen cabinets.
In other words, this waste was not being wasted. But with the subsidies, the Washington Post reported, sawmills can get twice as much selling it for biofuel as they can by selling it to their traditional buyers.
By subsidizing the biomass industry, Congress jeopardized the composite panel industry, which had 21,000 employees and $7.9 billion in sales in 2006.
The program was intended to convert waste for which there is no market — such as corn husks — and sawdust, which sells at $45 a dry ton. The subsidies amount to $45 a ton, doubling what a sawmill can get for its sawdust.
The biomass subsidy, by doubling the market price of what the composite panel industry needs, could do great harm to that industry.
Is that what Congress intended?
No, but that is what it recklessly did.
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Jan. 13
