End of a Golden Age

It is very possible that sometime in the next 10-20 years we will look back at the 1990s and early 2000s as a golden era with low unemployment, low consumer prices, easy access to a wide variety of foods and consumer goods and cheap energy. Depending on the next election, all of this may change.

First there is the issue of global warming. The lead story in my local paper, the Columbus Dispatch, was about power companies canceling plans to build new coal-fired power plants. They expect new global warming-based legislation that will make new coal-fired plants too expensive to run. Since coal is the cheapest way to generate electricity, power costs will go up as less coal is used. New power plants in general are being discouraged nation-wide. Eventually the growth in demand for electricity will outrun the current generating capacity and we will see brownouts or rolling blackouts. This is already happening in California where regulations have discouraged new power plants for decades.

I expect global warming legislation to affect most other aspects of life, as well. It doesn't matter cap-and-trade or carbon taxes are enacted, it will raise the cost of energy which raises the cost of everything else.

All of this is almost a certainty. All of the Democratic candidates and many Republicans advocate doing something about global warming, even if that something is ultimately ineffective.

Something else the Democratic slate is against is world trade. Two potent factions within the party, unions and environmentalists, hate world trade. Hillary and Obama have talked about the need to reign in current trade and Edwards has made trade barriers one of his central themes. The trouble here is that trade is the fuel for wealth creation. If you stop buying from a country they stop having money to buy your goods. If you erect barriers to stop their goods they create similar barriers against yours. Restraint of international trade was a major reason for why the Great Depression (actually a world-wide depression) lasted so long.

Bill Clinton understood this and championed free trade as did Reagen and both Bushes. (Hillary was too busy dressing in pink and talking about vast right-wing conspiracies to have learned this lesson.) The result is that third world countries like
India and China and perpetually stagnant countries like Ireland have booming economies.

Progressives have always hated international trade. Unions don't care about larger issues, they only want to protect union jobs (look at the current UAW strike against GM). environmentalists worry about CO2 emissions caused by manufacturing and transporting goods in foreign countries and are convinced that off-shore manufacturing only exists to get around US environmental laws. These interest groups pretty much control the Democratic Party and will choose the next presidential candidate.

If a Democrat wins I expect restrictions of both foreign goods and produce.

Put it all together and we face a darker future.