American journey: into the ethanol zone
I'm in the north midwest of America trying to see for myself how bad the economic situation is. What's clear is that subprime has hit America like a rash, picking out with "for sale" signs all the places where predatory lending doomed people to foreclosure. Lehman Brothers is fighting for survival this morning and Newsnight will bring the latest on that if there's a big development. However meanwhile I am right out amid endless fields of corn.
Amid the economic gloom there's also an upside: ethanol is the big new industry here in Indiana. I visited a brand new $117m ethanol plant yesterday: it's impressive - greenfield site, 30 acres of vats and piping, state of the art, and one of those satisfyingly simple processes whereby a lorry load of corn (looking a bit like rock hard versions of what you get out of a can of sweetcorn) drives up, tips into a silo, it gets mashed up with a reagent to make it ferment, then out of huge vats comes 17% alcohol liquid which goes straight into a train full of tankers and on to a petrol refinery to go in your car.
The site, which ground its first corn while we were there, was full of big construction guys in hard-hats and sunglasses. But once it's operational, here's the catch, the entire plant needs only four people to run it.
I've been asking people I meet: who or what is to blame for the economic downturn here in the US. Interestingly, the regular answer I get is not "Bush" "Washington elite" or even the investment banks. It's "greed". This country is still at heart governed by biblical values: it reminded me that when the banking industry pushed for deregulation in the 1970s one of the first things it had to do was abolish state-level "usury laws" limiting interest charged to 10%.