This is the Cato Daily Podcast for Wednesday, November 28th, 2007.

I'm Caleb Brown.

With the Iowa Caucus is coming up, it's incumbent on most candidates for president who to wax poetic about the virtues of corn

and specifically corn ethanol. Cato Institute Director of Budget Studies Stephen

Silvinsky argues that what makes good politics, in this case, doesn't make good economics.

Describe the rise in importance of corn ethanol as a political tool.

Ethanol has become the premier energy issue, it's become the

premier environmental issue. It touches on so many specific policies

not just budget policies but also in trade policies that a variety of

different interest groups have rallied around keeping a variety of

different subsidies, usually trade protections in Washington, DC,

in the farm lobby, which was already powerful as a result of their ability to sustain and defend

agriculture subsidies to various other crops have now been able to, in a sense, create

this issue de jure, this fashionable intent and interest by candidates of all political stripes to defend programs

specifically like ethanol and so in a sense we've got corn farmers basically

driving a lot of electoral politics today.

How significant is the Iowa caucuses to the formation of most presidential candidates' positions

on ethanol?

We hear a lot about it.

People have to bow down to the altar of ethanol before they can continue on in a presidential race.

How true is that?

That's certainly true of the Iowa caucuses. No presidential candidate can win the Iowa caucus without saying they're going

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