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DAVID KRUSE

By Staff | Aug 26, 2011

I wrote that Bachman would win the Iowa straw poll, Ron Paul would do well and Pawlenty was toast. Iowa Republicans are pretty predictable.

I doubt that this will be very relevant to the outcome for the GOP nomination. The candidate that I see that best reflects my perception of where the GOP electorate is today is Rick Perry.

I would fast forward to a Perry-Bachman ticket. The GOP 2012 ticket may well have seen its preview in Waterloo last Sunday. Romney is established and I don’t think the establishment is in control of the GOP today. I think the GOP rank and file will nominate someone who is a “true believer” regardless of the political prospects of electability. That is not Romney.

Perry is the best mix of both. Perry is irreverent, brash, disrespectful and arrogant while claiming to be a better Christian than any other candidate, a combination the Tea Party absolutely and enthusiastically loves and embraces.

He is not running for president yet. He is running for the GOP nomination to be their candidate for president. They eat up his disrespect for the president and Fed chairman Ben Bernanke, who, in their minds, was never legitimate and are not good Americans.

Given the opportunity to make the U.S. economy worse to sully Obama’s political prospects, they would not hesitate to do so as any means would justify that end. As things are today in the GOP, Perry can win. GOP stalwart Carl Rove knows Perry better than anyone else and is obviously in a state of alarm over Perry’s prospects looking for a candidate to foil Perry.

In his announcement speech, I cringed when Perry touted a goal of U.S. energy independence, while having the record of being the most anti-ethanol, pro-big oil governor in the country. The two are incompatible.

You can’t get to energy independence without biofuel and Perry has no place for a government-directed energy policy in his ideology. The ethanol industry has been in the trenches fighting Rick Perry for some time now. He’s represented big oil and big cattle interests to do the ethanol industry as much harm as possible to protect petroleum industry market share and reduce the price of corn.

Perry lobbied hard for an end to ethanol subsidies that are now being conceded. His opposition to ethanol goes much further than the subsidy however. He is also anti-E-15 and anti-Renewable Fuels Standards. The RFS is the primary foundation of structural support for the ethanol industry and Perry, seeing it as just another intrusion of government into our lives, would kill it as dead as the coyote that he shot while jogging.

He is 100 percent anti-ethanol campaigning against all government policy supporting it. He is 100 percent for big oil, supporting those subsidies joining the hypocrite crowd who claim philosophical opposition to subsidies, but still make an exception for big oil.

Perry comes from a cotton farm. No farm commodity producers have received more Federal subsidies than cotton. The South’s claim on cotton subsidies was the reason why Senator Grassley was never able to get the caps on subsidy limits lowered.

Perry is one of those good ol’ southern boys growing cotton for the government, or his daddy was while he was off politicking.

In 2007-2009 the Economic Research Service concluded that government payments totaled a 30 to 49 percent share of net farm income in the Southern Plains.

The Perry cotton farm would have folded without those subsidies while government subsidies were less than 20 percent of net farm income in the Corn Belt.

Perry supported oil subsidies while bashing Washington. He took cotton subsidies while bashing Washington. He took stimulus money while bashing Washington. The only subsidy he really hates is the one for ethanol that helped turn the Midwest farm economy around while reducing the amount of foreign oil flowing through Texas refineries.

He would devastate the ethanol industry and the Midwest farm economy with the same vengeance that he appears to direct at the Fed.

As to Perry suggesting that they would treat Bernanke “ugly” were he to come to Texas, this is my unwelcome to Gov. Perry to Iowa. He has done an enormous amount of damage to the biofuel industry and is running for the opportunity to do some more.

There are short term, intermediate term and long term fiscal problems everywhere and they are ganging up to make investment contract.

Rick Perry’s ethanol policy would drag Iowa’s rural farm economy into the Great Recession so that Texas feedlots can feed cheap Iowa corn and the country becomes more dependent on foreign oil to benefit his oil buddies in Houston.

Markets and investors don’t trust governments to do anything right and until some confidence is returned, business or consumers will not do the things that are required to restore a trend of economic growth. All the Fed can do is what its doing. Even the Fed says that government needs to act. Perry gets the Fed all wrong.

The Fed has been accommodating terrible government fiscal policy with the monetary policy necessary to keep the financial system functioning and the economy from crashing. What the Fed has done is remarkable and should be commended not condemned. They did not make this mess, Congress elected by the people did.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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