Welcome, I'm Anastasia Glova bringing you the Cato Daily Podcast.

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After gas prices went through the roof last year, politicians have been after the magic

cure for high prices at the pump and what they claim to be a devastating environmental

toll.

Is ethanol the cheaper, cleaner answer to what has been called America's energy crisis?

Senior fellow Jerry Taylor offers a healthy dose of skepticism.

Are today's gas prices too high? dose of skepticism.

Are today's gas prices too high?

Well, it depends on what you mean by too high.

They're certainly higher than they were in the past, but if you adjust for inflation and you

adjust for per capita incomes, you'll find that gasoline for 57, 1969, 1973.

That's largely because, well, inflation has eroded the value of the dollar, so prices

which seem high today aren't really all that high, and we're much richer today.

So in other words, if you double the price of of milk but your income has tripled over time that

doubling of the price of milk does not necessarily double the cost of milk to you as a percentage of your income.

Ethanol has been heralded as the clean homegrown alternative to dirty expensive foreign oil.

So how does ethanol live up to its reputation as a gas alternative?

It doesn't live up to its reputation very well at all on virtually any

count. I mean let's look at the economics for instance. Gasoline

at the Nymex was selling for July deliveries and wholesale markets for $2.10 a

...