Cheney's Fund Manager Attacks ... Cheney

When I met Grantham last autumn he, quite rightly, refused to confirm that the vice president was a client. But you can see the evidence in Cheney's own personal financial disclosure.

There is an investment angle to Grantham's argument. He says he is "certain" that "oil substitution, energy conservation, and related environment issues will be the biggest investment issue of at last the next several decades." He adds: "It is clear there is no single solution so investment opportunities will be spread very broadly, especially in energy conservation."

He believes we will need more nuclear power.

But he calls corn-based ethanol "more or less a hoax" when it comes to reducing greenhouse gas emissions. "U.S. corn-based ethanol, as opposed to efficient, Brazilian sugar-based ethanol, is merely another U.S. farmer-protection program, made very expensive both directly and indirectly by inflating real agricultural prices."

Tell that to the presidential candidates currently stumping the Iowa caucus. (Incidentally, three MIT scientists told me the same thing about corn ethanol more than a year ago when I interviewed them on the subject. After my article appeared in the Boston Herald, I received a snotty letter denying there was any such thing as "an Iowa corn growers' racket." It was from the "chairman of the Iowa Corn Growers' Association.")

Grantham's full letter can be seen on his company Web site [www.gmo.com], though you will need to register. It appears as the second half of the investment missive "Goldilocks Rules."

Grantham blames three decades of political cowardice for America's backward energy policy. As he dryly notes, "U.S. drivers -- the world's richest and some of the best behaved -- would, it was said, never accept increased taxes, where Italian drivers would! Even tax-neutral policies, such as taxing high mileage cars at purchase and subsidizing efficient cars, were never seriously considered."

The result: the fuel efficiency of U.S. cars has actually gone backward since 1982.

The irony is that this isn't, or shouldn't be, a partisan issue. Grantham singles out the Ford administration for his strongest praise on environmental matters. Everyone since, of both parties, has been a failure, he concludes. "The past 26 years have been such a wasted opportunity," Grantham writes. "This country had previously shown leadership in this field. President Ford got us off to a running start in energy efficiency... With a succession of President Fords, we would have ended up as an environmental leader and a great model."

I would love to know what President Ford's former chief of staff thinks of that.

His name? Richard B. Cheney.