Ethanol is near perfect example of the destruction that subsidies do on every level; political, economic and environmental. Once bad policy is clearly recognized as bad policy, it is still impossible to get rid of because of the political "feedback loop" that subsidies create; subsidized interests feed a portion of the subsidy back to Washington to keep the subsidies coming. Over time, more and more people (nearly 100% of which will vote) get dependent upon the subsidy. Once established, these feedback loops are practically impossible to break. Even Al Gore now admits that Ethanol was a "mistake" he made just because he needed to buy the votes:
http://www.politicsdaily.com/2010/11/23/al-gore-mea-culpa-support-for-corn-based-ethanol-was-a-mistake/ 
