February 5, 2016
Whatever one thinks of Texas Sen. Ted Cruz, when it comes to fighting against the unhealthy marriage of government and big companies (also known as cronyism), he has been more principled and courageous than all of the other remaining candidates in this race.
Case in point: Even though on the campaign trail in Iowa, and in spite of what could be perceived as a political risk, Cruz has remained true to his opposition to (and commitment to end) the terrible renewable-fuel standard, which requires blending ethanol and other biofuels into the gasoline supply, thereby driving food prices up and creating all sorts of distortions in the energy market.
Cruz has long been an opponent of the renewable fuel standard; he even sponsored a bill to repeal it in 2013. Since 2014 he has argued for phasing it out. He is sticking to his plan, which would start phasing out the program in his first year in office and end the standard by 2022.
It was courageous because for years, it was believed that to win in the state of Iowa, support for this particular cronyism was necessary.
As such, I have been following particularly closely that election. Indeed, as I said a few weeks ago, I thought that the stakes were high for those of us who are fighting against cronyism. I wrote “If Cruz ends up winning in Iowa without having either supported the standard or made accommodations to the demands of America’s Renewable Future, it will signal to all the other candidates that you do not necessarily need to cater to cronyism to win there.”
And on Monday night Cruz proved it is OK to oppose the ethanol lobby and still win in Iowa. Because Cruz had the courage, unlike many politicians, to stick to his principles, we know now that in spite of what we have been told for years, voters are willing to support candidates who oppose cronyism.
Cruz’s anti-cronyism position extends beyond the ethanol mandate. He was a fierce opponent of the Export-Import Bank and he has come out loudly against sugar subsidies too.
Now it is worth contrasting his behavior to some other candidates.
Ohio Gov. John Kasich has said in the past that he doesn’t support subsidies, including support for ethanol, but he hasn’t made any recent statement on the subject. In fairness to him, however, he wasn’t really campaigning in Iowa and likely wasn’t asked the question again due to that. But his creation as governor of JobsOhio, a cronyist scheme to funnel taxpayer dollars derived from the state-owned liquor stores to favored businesses, suggest his commitment to ending cronyism expired at the same time as his last congressional term.
Businessman and frontrunner Donald Trump is not only in favor of the ethanol mandate but recently said that if elected president, he would increase it. He said that “As president, I will encourage Congress to be cautious in attempting to charge and change any part of the RFS.” He added that “Energy independence is a requirement if America is to become great again. My theme is ‘Make America Great Again.’ It’s an important part of it.” He has also said that “ethanol is terrific!”
New Jersey Gov. Chris Christie is has indicated his support for the mandate, saying the president should enforce the mandate requiring refiners to blend ethanol into gasoline and saying he “absolutely” supports the mandate. But he has scaled back his enthusiasm in New Hampshire by saying the mandate needs to be reconsidered as part of an overall energy policy, suggesting some political opportunism may be at work.
Retired neurosurgeon Ben Carson first said that he would take oil subsidies and give then to the ethanol industry. But then he backpedaled and said that he opposed all subsidies, and favored phasing out the mandate by 2022. Former Florida Gov. Jeb Bush also said the mandate should be phased out by the year 2022, and businesswoman Carly Fiorina has said all energy subsidies, including the mandate for ethanol, should be eliminated.
While several other candidates joined Cruz in calling for the end to the mandate and subsidies, Florida Sen. Marco Rubio opted to cater to the ethanol industry after initially favoring the elimination of the mandate. He supported a bill that would end the mandate back in 2013, but later he changed his position. As The Wall Street Journal reported recently:
Sen. Marco Rubio was one of four GOP candidates to improve his ARF rating from “needs work” over the summer by publicly embracing the federal ethanol mandate. The Florida senator said Tuesday that the federal government’s agriculture mandates aren’t the same as federal regulations on other industries he is seeking to eliminate. “We cannot analyze issues before agriculture as being equal to what other industries face, because it’s not an equal playing field,” Mr. Rubio said. “It’s a very weak industry.”
This is a strange argument for him to use, since these are the very arguments he thought didn’t hold water when he was fighting against the cronyist Ex-Im Bank last year.
It is also worth remembering that Rubio, unlike Cruz, is also a big supporter of sugar subsidies, another impossible-to-defend cronyist program if you claim to believe in free market and free trade. It actually gets slightly worse. Rubio didn’t just support the sugar programs but offered a downright hilarious excuse for it. According to Rubio, the U.S. can't scrap its support for Big Sugar because "other countries will capture the market share, our agricultural capacity will be developed into real estate, you know, housing and so forth, and then we lose the capacity to produce our own food, at which point we're at the mercy of a foreign country for food security."
Now, call me a dreamer, but I hope that Cruz’s victory in Iowa will convince Rubio to return to his original objection to the ethanol mandate and to drop his sugar protectionism. At the very least, opponents of cronyism should be pleased that at least four of the candidates who campaigned hard in Iowa, including the winner, were willing to speak out against this program.
Veronique de Rugy is a Policy Advisor to the Leadership Project for America Foundation.