With any luck, we’ll be spared use of the term “fiscal cliff” for the next year, but 2014 is sure to present its own unique economic challenges, calamities and opportunities. Here’s a few areas in which they might emerge:
Economic inequality takes center stage Before the Occupy movement came on the scene in 2011, income and wealth inequality were pretty much off-limits as topics of conversation among powerful political leaders and media elites. Now it’s the “defining challenge of our time,” according to a speech President Barack Obama delivered last month. Whether or not Obama is serious about tackling the widening gap between rich and poor in 2014, there’s no doubt that the issue has gained enough traction to make it a lens through which economic matters must be viewed within the mainstream media. That alone is a huge shift, and it may make it possible for far-sighted, paradigm-shifting solutions to be taken seriously this year.
Getting serious about climate change Every year for at least the past 15 years was supposed to be the year we finally did something big about climate change. It’s doubtful that 2014 will be that year either. But it could be the turning point when climate-change deniers accept reality. Unfortunately, it’s only likely to happen because they’re being forced to face the economic opportunities and threats that could come from a warmer world. Governor Paul LePage was widely mocked for noting that Maine could benefit from global warming, but he’s not entirely wrong. There will be winners and losers as our climate changes, and certain Maine entrepreneurs certainly stand a better chance at gaining than millions in the developing world whose communities will suffer from floods, famine, and disease. As the economic consequences of climate change become more concrete and imminent, expect it to become a higher national priority. Just don’t be surprised if the emphasis shifts to profiting from it rather than stopping it.
Austerity reigns This year will be a test of whether drastic spending cuts during tough economic times really help people who are struggling. Congress’s recent bipartisan budget deal that guides spending for 2014 required sacrifices from both Democrats and Republicans but it also took for granted the necessity of prioritizing spending cuts over stimulus, even during a time of high unemployment. The approved budget extends about half of the spending cuts imposed through “sequestration,” which pushed 57,000 children out of Head Start preschool programs and forced cuts to countless other government programs. But everyone agrees the real impact of the deep 2013 spending cuts won’t be fully felt until 2014, once federal agencies have exhausted all their means of postponing serious cuts to services and programs.
Marijuana becomes big business Pot has long accounted for an enormous, invisible share of the nation’s economy, but the industry surrounding its cultivation and distribution is just now emerging from the shadows of illegality. This year Colorado and Washington will become the first states to create legal marijuana markets, and many expect Maine to follow close behind. The very different regulatory structures created by Washington and Colorado will present interesting economic experiments, and a major issue to watch is whether small-time entrepreneurs are able to compete with big businesses that are intent on dominating the new market. A lot’s at stake: A recent analysis by a coalition of marijuana businesses and investors predicts that a $10.2 billion legal-pot market will emerge in the next five years.