Creative destruction: refers to the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism.’
I am an unabashed laissez faire capitalist. I believe in creative destruction. Last week Peabody Energy Corporation filed for bankruptcy. This is not some “also ran” coal company. Peabody is the world’s largest private-sector coal company. If it died because of creative destruction, I would say, “fare thee well” – i.e., low natural gas prices forced it out of business because of the new “fracking” production method. But that is not why it died! It died because of radical environmentalism bolstered by the Democrat Party and Barack Obama in particular
It is also important to remember that the United States is the Saudi Arabia of coal. More than 80% of the world’s total proved coal reserves are located in just 10 countries. The US tops the list with more than a quarter of the proven coal reserves, while China, which ranks third, is the biggest producer and consumer of coal. We are in an economic and soon possibly a military battle with China. Are we to relinquish one of our most abundant natural resources in this competitive atmosphere? China burns nearly 3 times as much coal as the United States and has given the green light to more than 150 coal power plants so far this year. If we eradicate the US coal-fired power plants completely, it will be meaningless as China (and India and Japan) continue to expand.
Peabody is not the only large coal company to suffer the same fate. Alpha Natural Resources Inc., the second largest supplier of coal in the United States, and other coal producers have filed for Chapter 11 protection from creditors.
If the radical environmentalists were at least correct in their vitriol against coal as an energy source, Americans might agree that coal companies should go the way of buggy whip companies. However, increasingly, the environmental position is being shown to either bogus or their predictions inaccurate. Further to this point, the US contribution to man-made CO2 is insignificant compared to China. Eradication of the American coal industry is pointless from a “global warming” perspective.
Does anyone remember when the Democrat Party was the party of the “working man?” Those days are gone and it is now the party of the radical environmentalist. I cannot for the life of me comprehend why private sector unions still support the Democrat Party. An estimated 31,000 coal miners, truckers, engineers, construction workers and others have lost their jobs as a result of this fanaticism. Another 5,000 or more will be given pink slips at Peabody. These were well-paying union jobs.
These union workers also have pension funds. The coal industry has lost more than $30 billion in stock value under Obama and the Democrat Party, with a significant fraction of these losses showing up in union pension funds. These facts and the “‘Cadillac Tax’ on union health insurance” should have convinced private sector unions to abandon the Democrat Party. But no. Radicalism doesn’t believe in “self-interest,” or logic, or rationality.
I know that Republicans are angry and looking for a candidate to change our Party. But, if Hillary is elected she will cement the Obama “executive actions,” and, indeed as she has promised, expand them. No irritation at the “process” or the “establishment” is worth that.