When the elected officials and bureaucrats who run a government want to stack the deck in favor of a politically connected special interest, they have three main ways that they can go about it:
In the case of ethanol in the United States, the federal government has employed all three measures over the years, frequently with bipartisan political support. Its subsidies keep afloat politically connected businesses that wouldn’t otherwise be able to keep themselves in business. Its tariffs have kept consumers from being able to buy cheaper sources of ethanol on the global market. And its mandate to put an increasing amount of corn-based ethanol into fuel makes food more expensive.
https://fee.org/articles/ethanol-is-terrible-for-health-and-the-environment-but-government-keeps-backing-it/
- They can subsidize the special interest, often using taxpayer cash.
- They can penalize the competition of the special interest, often through tariffs.
- They can mandate that people do business with the special interest.
In the case of ethanol in the United States, the federal government has employed all three measures over the years, frequently with bipartisan political support. Its subsidies keep afloat politically connected businesses that wouldn’t otherwise be able to keep themselves in business. Its tariffs have kept consumers from being able to buy cheaper sources of ethanol on the global market. And its mandate to put an increasing amount of corn-based ethanol into fuel makes food more expensive.
https://fee.org/articles/ethanol-is-terrible-for-health-and-the-environment-but-government-keeps-backing-it/