The Global Warming agenda continues to disintegrate, having passed an "extremely important inflection point" as I noted last November. The news just keeps getting worse. They don't have the data. They were making things up. The computer models were fudged and tinkered with. There has been no warming since 1995. The Medieval Warming Period, way before mankind started blowing carbon into the atmosphere, was likely much warmer than the current period. Governments are slowly coming to the conclusion that heroic attempts to alter their economies in the name of saving the planet don't make sense if there is no science to guide them.
This is good news for the economy because it greatly reduces the threat of punitive legislation that would force us to use more expensive energy sources. It is also good news because it contributes to the growing sense, felt acutely by those of Tea Party persuasion, that government has gone to far in regulating, taxing, and otherwise controlling our lives. It takes big things like this to move the public by enough to achieve transformative change in our politics. Have you noticed the growing list of long-time senators and congressman who are deciding to retire (Evan Bayh being the latest).
The political winds are shifting because the electorate is fed up with big government and all of its intrusions into our lives. The realization that this was coming helped propel the market higher beginning last March, and I believe there is still a lot more upside potential as the new reality of shrinking government begins to take shape. I can't think of anything right now that is more significant for the future of the economy than this emerging change in the mood of the electorate. The retreat of Climate Change is a small but important part of a larger movement that believes that Big Government promised way too much all along and has failed miserably to deliver.