ECNN

If Congress ever gets through the health care debate, lawmakers can turn their attention to the next centerpiece item in their economic agenda: cap and trade.

Business owners across Iowa would do well to watch this issue closely, because passage of cap and trade will inflict lots of pain on them, as well as any consumer who is struggling to pay sky-high bills to fossil fuel-fired utilities.

In other words, everybody.

Ernie Goss, a professor of economics at Creighton University in Omaha, Neb., and director of the Goss Institute in Denver. Colo., was in Waterloo last week to offer Cedar Valley business leaders some predictions on the economy.

He was asked what he thought about cap and trade.

“That’s an easy one: I’m opposed to it,” he said.

Cap and trade, he said, would be a major blow against business and the consumer, he told the audience at the annual Economic Outlook Luncheon, co-sponsored by The Courier.

He said, rightly, and with no small measure of irony, that cap and trade is nothing but a waste of energy, particularly while China and India don’t go along with it – which, of course, they won’t. And why should they? They both are relatively young, dynamic economic powerhouses that are swimming in newfound wealth and prosperity for their rapidly emerging middle-class populations. These people are, for the first time, buying cars, homes, the latest fashions and discovering the joys of free-market economics that leaders of the Western world seem bent on forgetting.

Asking China and India to call a halt to all that growth is akin to asking a starving man to limit himself to an appetizer.

And trying to pressure those emerging markets into arbitrarily crippling the kind of unprecedented growth they have enjoyed can lead only to severe pain on American businesses. And that pain will trickle down to Iowa’s agriculture-dependent economy, Goss noted.

“If you can’t get China and India and other nations to go along with it, you’re going to have a negative impact on the Iowa economy, the regional economy, the U.S. economy, and you’re not going to clean up the environment that much,” he said.

Goss, who has served as an economics advisor for government and private-sector organizations, including the Congressional Budget Office, said the timing of cap and trade as a top-of-agenda legislative matter makes no sense during a recession that many observers are billing as the worst since the Great Depression.

There’s plenty of room for debate about how to reform the health-care system, but the potential economic damage wrought by cap and trade would be unambiguous, Goss said.

“It will slow the economy down,” he said.

If the U.S. adopts cap and trade unilaterally and slaps punitive trade barriers on nonparticipants like China and India, the latter are certain to retaliate with import bans, particularly on food items, Goss said. This, at a time when Iowa and Cedar Valley farmers are working hard to open the massive Chinese market.

“It’s a nonstarter for me,” Goss said of cap and trade.

As it should be for anyone hoping for the improved health of the business community.