Supply side economics

In early 90's there was surplus of corn. Some people thought we had to reduce supply to meet cost of production. Then some progressives got together and formed a coop to convert corn to sweetener. (A coop is a organization where each member has one vote regardless of investment made vrs a capitalist company where votes is based on value of ownership.) Soon that market was saturated and corn piled up and price dropped. I remember corn below one dollar at harvest.

Then some one remembered, Henry Ford built the Model T to run on ethanol. Corn made good ethanol. A few farmers (producers) got together and formed a organization to promote ethanol. This immediately raised the ire of the importers of energy and the shrinking gathers of domestic mobile energy and they turned loose the ranting crowd (publicist, talk radio and political lobbyist) trying to convince the consuming public that the use of ethanol would destroy their car. And what did this producer group do? They applied political pressure to the State of Minnesota to mandate ethanol in gasoline. They mandated demand. Corn growers got more for their corn and hired publicist and lobbyist to promote the use of ethanol. Other states saw the success in Minnesota and promoted ethanol in their states. Because of the surplus of corn in the 90's more research (read jobs) was done to improve the production of corn. The taxpayers of Minnesota even paid subsidies for producers to make ethanol. And because producers made more money and hired people to build and run ethanol plants who all paid taxes, for each penny invested by Minnesota taxpayers, at least three cents was paid by the new ethanol industry and its workers And even as less acres are planted more corn is produced. Today corn is selling at $3.70 CBOT.

So this story begs the question. Should we promote supply or demand side economics?