In a poignant and understated opinion piece, called “The Courage to Choose” Minyan Peter helps us understand why 2008 and beyond are likely to be a very difficult years. Peter writes:
I believe that in time, historians will define the last twenty years in America as the “Age of Aspiration” where, thanks to unprecedented levels of credit, Americans could become anything they wanted.
Well, I, for one, believe that our Age of Aspiration is ending. And, with its conclusion, we must, for the first time in almost a generation, begin to reconcile our wants with our means. We must choose what to do without, rather than what more to do with.
Peter goes on to observe:
We are going to have to separate what is most important from least, and act accordingly. Where life was once limitless, it will now be constrained.
And, like it or not, all of us will need to return to our vocabulary a simple phrase that I believe has been lost over the past twenty years: “I can’t afford that.”
Unfortunately, social trends do not reverse easily. This “age of aspiration” that Minyan Peter describes could also be called an “age of entitlement.” The illusion of unconstrained choices is a mindset that will not be easily reversed. Collectively as a society, we do not currently have “the courage to choose.” Given that, it is easy to forecast certain social trends for 2008 and beyond.
- More and more bailouts will be demanded by individuals, households, and organizations that have lived beyond their means. The demand for housing bailouts has only just begun and will begin to spread to credit card and other consumer debt.
- Governments, at all levels, have lived well beyond their means. Because they have coercive power, they will be the last to say, “I cannot afford that.” Thus, it is almost a certainty that taxes will go up.
- More and more dangerous populists, like Mike Huckabee, will seek office. Populists are especially dangerous because they are without any identifiable principles. This makes them especially prone to totalitarianism. As the economic situation worsens and fear goes up, in years to come, politicians like Mike Huckabee will seem like relatively benign candidates.
- At the same time, because more of the population will be willing to look at root causes, more principled candidates, like Ron Paul, will seek office. Unfortunately, for the foreseeable future, support for unprincipled populists will exceed support for principled candidates. Polarization will increase.
- Demand that income be redistributed from the “rich” will increase. The crowd that populists pander to will reason: “After all they must have attained their money unfairly and it’s only right that that money be redistributed to those who need it more.”
- For the foreseeable future (next five years), we will move further away from our framework as a constitutional republic, which was founded with defined and limited powers granted to government.
- As the social mood deteriorates, the threat of more ruinous foreign adventures will increase. Recently in New Hampshire, John McCain said that the United States military could remain in Iraq for “maybe a hundred years.”
- Demands to limit cheap, foreign imports will increase. In the short-term, there is little chance that trade liberalization will be reversed; but in the coming years, the populist threat of ruinous tariffs and quotas will increase.
- Demands that something be done about energy prices will increase. This will provide political cover for continued subsidization of ethanol and other forms of energy, such as nuclear, which are not viable on the free-market. This subsidization will further raise energy prices; drain capital away from viable, emerging, alternative energy sources; raise food prices; and create even more environmental disasters, like the current draining of aquifers in the mid-west.