Hello, I'm Mark Pearson. Wall Street took a giant step this week in it's recovery from nearly seven years of turmoil. On Tuesday, the Dow Jones Industrials closed at a record high for the first time since January of 2000. Analysts credit growing optimism that the Fed might begin lowering interest rates soon as a key contributor to the rally. That sentiment seems plausible. The Dow virtually ignored a bearish Factory Orders report released Wednesday on its way to three consecutive record closes this week. But the rally short-circuited on Friday, when the government issued a weaker than expected jobs report. Americans will receive one more snapshot of the labor market just days before the mid-term elections. And as voters head for the polls, their decisions are likely to be shaped, in large part, by their pocketbooks. While declining oil prices also played a role in this week's rally, voters still are concerned about higher fuel prices. And with politicians pumping their own brands of "renewable rhetoric," alternative fuel production is emerging as an election issue.
Nowhere is the issue more prominent than in Iowa, the nation's top producer of ethanol. While some states are ramping up the call for increased use of 10 percent blend ethanol, candidates for Iowa's governorship are setting their sights at E85.
Chet Culver, D-Iowa: "Let's manufacture the flex fuel, the alternative pumps in Iowa, the E85 pumps, the Biodiesel pumps. That's a great opportunity for our state."
Rep. Jim Nussle, R-Iowa: "My Iowa energy plan, which I put out last year about this time ahead of everybody else, is because I wanted to get E85 pumps in these gas stations."
But while the corn stalk and flex fuel talk are flying in the Hawkeye State, many other political races are heating up in Missouri, Illinois, Wisconsin, Colorado, and Minnesota.
Lawmakers in farm country aren't the only ones jumping on the biofuels bandwagon. This week, former CIA Director James Woolsey urged the federal government to put less focus on subsidies for corn producers and more attention towards cellulosic ethanol. Woolsey claimed that with the expansion of cellulosic ethanol, the U.S. could replace 25 percent of oil imports. Woolsey estimated that would create earnings of $80 million and double net farm income.
Despite the lofty predictions over alternative fuels, questions remain over how much domestic ethanol U.S. farmers can supply.
Since January, the U.S. government has imported 343 million gallons of ethanol from Brazil…making America the No. 1 purchaser of Brazilian ethanol.