First, a recap of last year's (unusually poor) crop of predictions:
The Euro's never-ending soap opera will badly constrain European growth, and developing-world growth will also slow. As a result the US economy, though stronger than elsewhere, will grow only modestly in 2012. The stock market will decline as profits get squeezed, and interest rates and inflation will remain low. Real Estate will bottom out but remain flat, and oil prices will (finally!) drop modestly, as new supplies start to come online. The US dollar will continue the recovery it began in mid-2011, as other economies continue to show greater weakness.Not bad--until we get to the specifics: the market's actually up, real estate is up modestly, and oil prices and the dollar are basically flat. Nothing's off by much, but lots of things are off by a little bit.
At least one European country will begin concrete initial moves towards exiting the EMU (AKA the Euro). Rather than causing the predicted crisis, this move will eventually come to be recognized as the only realistic solution to Europe's financial crisis, and the question of which countries will require a bailout or default will shift to that of which countries will require a Euro exit.It was touch-and-go for a while, but the new ESM has apparently convinced just enough people that the EU isn't on the verge of collapse to, well, stave off collapse (for now, at least--see below)...
The "Arab spring" turmoil in the Middle East will turn out to be more of a large-scale collapse than an awakening. Following the departure of American troops, Iraq will dissolve into the civil-war-like conditions of 2006, with the Iranian-backed Shi'ite government battling Saudi-supported Sunni rebels, and the Kurds increasingly clamoring for independence. Syria's Bashar Assad will remain in power, but will be forced into a protracted low-level conflict with a Turkish-supported insurgency, as Western sanctions bring the country's economy to its knees. Egypt will face food riots as its economy also collapses and foreign aid fails to prop up the government's finances enough to keep up the necessary rate of subsidized food imports. The new Islamist governments of Libya and Tunisia will attempt to impose strict Shari'a laws, but will find themselves unable even to maintain basic order in the face of domestic political infighting, corruption and tribalism. The PA will find itself under increasing pressure from a resurgent Hamas, and the two will spend most of the year alternating between making nice and fighting bitterly. Iran's nuclear program and apparatus of internal repression will continue to operate unimpeded--new sanctions will be imposed, which will be about as effective as the ones against Saddam Hussein were--but it will be too preoccupied with propping up its proxies in Syria and Iraq to cause much trouble elsewhere.
Amidst all this chaos, Israel will be a haven of stability, with ample time and resources to devote to its endless internal political squabbles.As with my financial predictions above, I was off on many of these by just enough to look bad--overestimating the rate of collapse in Iraq, Egypt and Tunisia, and underestimating it in Syria--while getting the overall picture pretty accurate.
At least one of the following autocrats will fall from power this year, due to death or ill health: Hugo Chavez, Ali Khamenei, King Abdullah of Saudi Arabia, Robert Mugabe, Raul Castro.All of them have somehow managed to hang on through 2012, although one may not last much longer...
Mitt Romney will very narrowly defeat Barack Obama in the 2012 presidential election. The Republicans will also win the Senate--but just barely. They will maintain control of the House of Representatives, but with a net loss of seats. Turnout will be low compared to recent presidential elections.Well, given today's intensely polarized, nearly perfectly evenly-divided political landscape, trying to figure out which way turnout will tilt in any given election ten months in advance is becoming a hopeless project (also, the sun was in my eyes and my cat ate my homework)...
The issue of concussions will become the NFL's equivalent of MLB's steroid scandal.Okay, maybe not this year...
And now for this year's no doubt equally off-base offering:
- The US economy will continue to grow at a sluggish pace, constrained by declining government stimulus and interest rates inching up with the growing concern over public debt, but buoyed slightly by lower prices for fossil fuels. Inflation will remain tame, and the stock markets will weaken slightly. Real estate will continue its very gentle upward trend.
- The newly-restabilized Eurozone will destabilize again, when domestic political pressure forces one of the bailed-out governments (most likely Greece) to balk at the required austerity measures, and/or one of the bailing-out governments (i.e., Germany) to balk at its required contributions.
- Any US government spending reduction of any kind, let alone entitlement reform, that occurs this year will be purely cosmetic. The debt will continue to expand until the threat of rising interest rates forces politicians' hands.
- Damascus will fall to Syrian rebels, and chaos will ensue as Alawi Assad regime loyalists retreat to defend their stronghold in the northwest, the Kurds carve out an enclave in the northeast, and Sunni Islamists set about slaughtering minorities elsewhere. The unrest will spread to Lebanon, where Sunnis (including Islamists) emboldened by events in Syria will begin challenging Hezbollah's dominance in earnest. Meanwhile, in Egypt, The Muslim Brotherhood will consolidate its iron grip on power, but will be too busy dealing with economic crisis and the resulting unrest to make trouble elsewhere. The Palestinian Authority will bring some kind of case against Israel to the International Criminal Court, where it will sit for some number of years, but the West Bank will be largely quiescent, and no "third intifada" will break out, a few occasional minor disturbances notwithstanding. And despite increasing hostility from the Obama administration, overall global anti-Israel agitation will decline, as a result of Iranian setbacks and the increased respect that typically accrues to a potential future energy supplier to Europe.
- Binyamin Netanyahu's party will win the January election, and form a center-right coalition largely similar to the current one, but without Ehud Barak. There will therefore be more settlement activity, but no military strike on Iran's nuclear program, which will remain in its current alarmingly-close-to-nuclear-weapons-but-somehow-not actually-building-them-yet state. In fact, following the fall of Assad and the resulting decline of Hezbollah, Iran will begin to look--to all its adversaries, including both Israel and the Gulf states--like a much more manageable regional threat. Official and unofficial expressions of anti-Iranian hostility in the Sunni world will thus become much bolder and more open.
- At least one of the autocrats from 2012's list (Hugo Chavez, Ali Khamenei, King Abdullah of Saudi Arabia, Robert Mugabe, Raul Castro) will not make it through 2013.
- The next hit cable TV series will break new ground by revolving around a fascinating, complex male character who's not involved in violent crime.