Supporters argue that allowing more sales of gasoline blended with 15 percent ethanol will reduce prices at the pump. Even if consumers occasionally see a few cents shaved off a gallon of fuel, that visible savings tells only part of the story. By focusing solely on the sticker price, policymakers ignore the far larger costs consumers have already paid before that fuel ever reaches the gas station.

Economist Frédéric Bastiat warned against this type of mistake nearly two centuries ago.

In his famous essay on the broken window fallacy, Bastiat describes a crowd watching a shopkeeper whose window has been shattered. Some observers argue that the accident is beneficial because replacing the window creates work for the window maker. The fixed window is visible. What goes unseen is what the shopkeeper would have otherwise done with that money—perhaps buying new furniture, investing in his business, or hiring another worker. Society gains nothing from replacing what was unnecessarily destroyed; resources have merely been redirected.

Public policy often suffers from the same illusion as the onlooker.

The Renewable Fuel Standard (RFS) and decades of ethanol subsidies produce highly visible beneficiaries. Corn growers receive increased demand; ethanol producers expand production, and politicians point to lower advertised gasoline prices. Those are the “seen” effects.

The unseen costs are far broader.

Federal farm programs have long directed substantial taxpayer support toward farmers, with the largest share, $3.2 billion in 2024, dedicated to corn. The subsidies come in different forms and include commodity programs, crop insurance, conservation payments, and other incentives. Rather than simply responding to market demand, these policies encourage greater corn production while making alternative crops comparatively less attractive. The result is a market shaped as much by government policy as by consumer preference.

Those subsidies are paid for by taxpayers long before ethanol reaches the pump.

Federal ethanol blending mandates effectively guarantee demand for ethanol regardless of broader market conditions. Consumers therefore finance ethanol production both through tax-supported agricultural programs and through regulatory requirements that reshape fuel markets.

Even when pump prices are modestly lower, those savings frequently disappear once consumers account for fuel economy. Because ethanol contains less energy than conventional gasoline, higher ethanol blends generally deliver fewer miles per gallon. A lower price per gallon does not necessarily translate into a lower cost per mile driven, a distinction many policymakers overlook.

Nor are fuel markets the only place consumers bear these costs.

Corn diverted toward ethanol production becomes unavailable for food and livestock feed, increasing costs throughout the agricultural economy. The Congressional Budget Office concluded that expanding ethanol production contributed to higher food prices by increasing demand for corn and related commodities. Poultry producers have similarly documented higher feed costs resulting from ethanol policies, costs that ultimately work their way into grocery bills.

Viewed individually, each of these costs may appear manageable. Together, they paint a different picture. Consumers help finance corn subsidies through their taxes. They pay again through policies that distort fuel markets. They pay once more through higher food prices. And only after all those costs have accumulated do they arrive at the gas station, where politicians celebrate shaving a few cents off a gallon of E15.

That is not affordability.

It is simply moving costs from one pocket to another.

Real consumer affordability isn’t achieved by masking prices through subsidies and mandates. It comes from competitive markets where producers succeed by offering consumers better value, not because the government has tilted the playing field in their favor.

Congress should remember Bastiat’s lesson. Good policy requires looking beyond what is immediately visible. Until lawmakers account for the hidden costs imposed throughout the ethanol supply chain, promises of cheaper gasoline will remain little more than another broken window.

The post Broken Windows and Broken Ethanol: The Costs Consumers Never See appeared first on Free the People.

Concerns over the direction the Federal Trade Commission (FTC) is taking under current leadership are magnified when proposed legislation would rely on the agency for enforcement. The FTC may not just be negatively impacting antitrust but creating additional roadblocks to digital protections.

Even before becoming Chair of the FTC, Lina Khan was raising eyebrows with her critique of the consumer welfare standard, which guides antitrust enforcement to focus on consumer harm. In a now-famous quote from a Fox News interview, Khan appeared to embrace politicizing the agency when she stated “I think all decisions are political in so far as government agencies are bringing them.”

This statement flies in the face of the idea that the FTC is an agency focused on consumer protection and the enforcement of existing laws. Even the FTC staff have questioned whether or not the chair’s ultimate goal was to change the law rather than enforce it. With failure rates more than three times as high as some previous administrations, it’s clear that under Kahn’s leadership, the agency is not pursuing a winning strategy.

The Chair has also come under fire for refusing to recuse herself to avoid the appearance of impartiality. Even without the quote which seemingly embraces a political agenda, Khan’s history in academia and activism has meant that her opinions regarding prominent tech platforms are well documented. However, when the Designated Agency Ethics Official suggested that Khan’s participation in a proceeding involving Meta could provide the appearance of impartiality, Khan ultimately decided to remain on the case. This further contributed to the appearance that Khan was more focused on achieving specific aims than fairly enforcing the law.

As the agency could be the enforcer of pending legislation, concerns over the FTC’s strategy extend beyond antitrust.

The APRA, if passed, would be enforced by the FTC and the agency would have the additional authority to approve compliance guidelines for specific parameters of the legislation. In the proposed Kids Online Safety Act (KOSA), the FTC would be in charge of commissioning research, issuing guidance for compliance, and enforcing the law. The agency also plays a significant role in the proposed Children and Teens’ Privacy Protections Act, which would amend the Children’s Online Privacy Protection Act and is also enforced by the FTC.

While policy experts debate the tradeoffs of additional protections for children online, most can agree that a data privacy standard is needed even if the specifics can create conflict. However, the nature of the APRA is that it would focus on digital businesses, an area where the FTC’s impartiality has been questioned. The monumental political task of passing privacy legislation faces an additional roadblock when the agency that would enforce it is no longer a trusted neutral enforcer of legislation.

Before serious conversations can happen regarding the future of data privacy in the U.S., lawmakers should focus their attention on reining in an agency that risks weaponizing any legislation progress in this area.

The hurdle of drafting a passable law is huge, but the more hidden barrier is a rogue agency that can’t be trusted to enforce it.

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Before proponents of regulations cheer this development, it is worth considering whether Americans would truly be better off without the companies that allow us to stay connected with loved ones and bring new levels of convenience to tasks as broad as going to the airport or shopping.

The flaws of large tech companies have been well publicized, and concerns reach across the political spectrum. Many individuals on both sides of the aisle are unhappy over content moderation and the implications of such influence.

These concerns have almost certainly contributed to the loss of public confidence in some of the companies. Overall, support for additional regulation has declined but remains significant with 44 percent of respondents supporting greater regulation, according to 2022 Pew Research polling.

The decreased support for greater regulation was particularly pronounced among Republican-leaning respondents. The trend might appear surprising given the liberal slant of tech companies, but it is reflective of a preference towards limited regulation that has been a stalwart stance of conservatives for decades.

Those who take the position of limited regulations usually do so through an understanding of the imposed cost on businesses and the economy. The National Association of Manufacturers found that in 2022, federal regulations cost the U.S. economy over $3 trillion and an average of $277 thousand in compliance costs per firm. Such expenses can’t accumulate indefinitely without eventually resulting in a regulatory tipping point.

The most recent example comes from the ride-sharing companies Uber and Lyft. After Minneapolis passed minimum wage requirements which would take hourly compensation from an average of $13.63 per hour to an estimated $15.57 per hour, the two companies announced they would cease operations in the city. While this may appear to be a minor regulatory change, it directly challenges a business model that relies on independent contractors who are paid on a per-ride, not a per-hour basis.

Google and Facebook have also looked to restrict services based on regulations. Legislation designed to require platforms to pay fees for the use of news content has either been proposed or passed in Australia, Canada, California, and at the U.S. federal level. However, these types of bills have historically been met with threats or actual removal of news content by Google and Meta.

While agreements have previously been reached to maintain news content on these sites, it does show that regulations targeting revenue models can eliminate key services consumers rely on.

One of the more popular proposals popping up in states across the country are age verification requirements. These primarily focus on social media or adult content sites. In instances where age verification requirements have been passed at the state level for adult content, we have seen companies no longer offer their service within those states, the most recent example being Texas.

A report by the American Consumer Institute found that based on population estimates “thirty-nine states and the District of Columbia were identified as having an estimated social media user base low enough that high regulatory compliance costs might surpass potential revenue.”

From minimum wage laws to age verification, tech companies are facing new regulatory pressures, and often they choose to end service rather than comply.

It should give lawmakers pause when companies choose to limit services in regulated locations. It is possible to critique some of the impacts of tech companies while also acknowledging the conveniences they provide to consumers every day. Regulatory actions should be careful to not pass the regulatory tipping point and cut access for consumers.

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