THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume XI, Issue # 6, January 6, 2009
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
AN ORDINARY INVESTOR LOOKS AT THE COMING DECADE
By Dennis T. Avery
WHERE WILL AMERICAN CITIZENS INVEST THEIR PRIVATE CAPITAL DURING THE NEXT DECADE? LOOKING BEYOND
THE MESS OF SUB-PRIME MORTAGES & UNFUNDED AUTO WORKERS' PENSIONS -- RADICALISM, THE ENVIRONMENTALIST
MOVEMENT, & THE OBAMA PRESIDENCY -- THE ECONOMIC, ENERGY, & ENVIRONMENTAL POLICIES OF THE OBAMA
ADMINISTRATION & THEIR IMPACT ON U.S. ECONOMIC RECOVERY & GROWTH INVESTMENTS
FULL STORY:
It’s a new year, and we must look beyond the mess of sub-prime mortgages and unfunded auto pensions — toward the
markets where American citizens have to invest their private capital for the next decade.
Problem 1: If there hadn’t been buyers for the sub-prime mortgages, they wouldn’t have been written. The buyers were
named Fannie Mae and Freddie Mac, and they’re still buying mortgages with our money — after a $200 billion bailout.
Problem 2: The auto bailout has been in the making since Japanese companies started hiring American workers at
competitive non-union wages 20-odd years ago. The wrongheaded grandeur of the United Auto Workers’ Big Three
auto contracts looks stunning, even decades later. But, now, the auto recovery is complicated by impending constraints
on fossil fuels, with the radical Carol Browner as White House “energy czar.” Come to think of it, Obama’s own
campaign pledge to make energy costs “skyrocket” in order to fight global warming is pretty radical itself.
But the nation is now entering its third straight harsher Winter, triggered, says NASA, by a shift to the Pacific Ocean’s 25
- 30 year cold phase. Only a fool would escalate energy prices in a recession, while global temperatures are trending down.
The new President will thus have to dance the same federal minuet as Kevin Rudd, the new Australian Prime Minister —
also elected on a Green platform to “save the planet.” Rudd is promising a tiny 5 percent cut in greenhouse emissions —
trying to keep his base without scaring investors away from Australia’s manufacturing and its big farming and coal
industries. The dance leaves no one happy, most certainly not millions of Australian investors.
In Germany, Angela Merkel has transformed herself from “Eco-leader” to “Stability leader,” promising to protect the
country’s autos, steel, cement, and aluminum from high carbon emissions fees. She realizes the number of highly-touted
“green jobs” is tiny compared with the number of “old jobs” that might flee to China or India. She’s building 26 new
brown-coal power plants in case Russian gas exports are cut off.
This energy question pervades the investment outlook. U.S. judges are banning new coal plants, while Europe, China
and India burn more coal. The United Kingdom has made no decisions on how to replace the upcoming loss of 40 percent
of its electricity -- except 7,000 new wind turbines that will produce tiny amounts of power erratically.
Yet, somehow, the world must, in the next decade, increase its food production by another 50 percent, supply homes and
transport for another billion people, and educate a new generation of highly-skilled workers for info-tech jobs. It’s a bigger
economic dilemma than any since World War II rescued Franklin D. Roosevelt’s “New Deal” from the Great Depression.
Will most of the growth investments now be made in Third World countries? Who will buy stock in GM or Boeing? Will
cement for Obama’s public works projects triple with emission fees? Will air travel be penalized for burning fossil fuels?
Will Fannie and Freddie be reined in? Must we hazard the Chinese stock market?
President-elect Obama offers no guidance yet.
LINKS TO RELATED TOPICS:
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Agriculture, the Economy, & Human Health & Welfare:
Policy Issues Relating to Food Production & Consumption
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
The Earth's Natural History, Global Climate Changes,
& the Future of Human Life & Civilization on the Planet:
Science, Ideology, & Public Policy
Dennis T. Avery is an environmental economist, and a senior fellow for the Hudson Institute in Washington, DC. He
was formerly a senior analyst for the U.S. Department of State. He is co-author, with S. Fred Singer, of Unstoppable
Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, Virginia, 24421 or email
to cgfi@hughes.net
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
Cultural, Military, International, Strategic, & Geopolitical Issues
Conservative Government Ensures a Nation's Strength, Progress, & Prosperity