As perennial as unrest in the Middle East and political rancor at home, the ICBW annual predictions post is back again--starting, of course, with our review of last year's not-so-on-target predictions:
- The US economy will dip into recession--a full-fledged one, this time--in 2023, and all major asset markets will again be down sharply by the end of the year (apart from bonds, which will benefit from a recession-related decline in inflation). If a recovery begins at all before 2024, it will be anemic. The collapse of cryptocurrencies will continue.
Wrong on just about every count. Stocks are up, bonds are flat, real estate is up slightly, and even Bitcoin is up. I blame the Fed for not attacking inflation sufficiently vigorously (it's still above 3%, higher than the Fed's traditional 2% target).
- The war in Ukraine will take one of two paths: if Putin survives the year, then the war will drag on, World War I-style, at increasing cost to both sides, with Ukraine making incremental gains but both sides hampered from major offensive actions by lack of equipment and ammunition. On the other hand, if Putin dies this year, then the new leader, seeking a domestic PR victory, will begin negotiations for ending the war.
This one may have been my best of the year--fairly accurate for the Putin-survives case.
- The unrest in China will dissipate, but a spooked government, distracted by COVID and a 1990s-Japan-style economic implosion, will hold off on major internal crackdowns--let alone an invasion of Taiwan. The unrest in Iran, on the other hand, will continue and even grow, with the opposition coalescing around some consensus leader--possibly the heir to the last Shah. If Khamenei survives through 2023, then so will his regime, but it will end the year looking increasingly shaky. If, on the other hand, Khamenei dies, then so will the regime--even if a candidate manages to seize the role of successor immediately, without a protracted struggle, he will nevertheless be too weak to be able to rally the regime to fully suppress the uprising.
I was pretty accurate about China, although Xi does appear to have been busy purging top-level officials this year (by "crackdowns", I was referring to large-scale actions against portions of the public, such as its Hong Kong, Uighur and COVID lockdown campaigns). I knew my Iranian prediction was risky--the mullahs' regime has been pretty resilient over 40 years--but I certainly didn't expect the level of fawning appeasement granted by the Biden administration this year, and that may have been what gave Iran's rulers the confidence to continue to crack down hard on internal dissent--not to mention greenlighting Hamas' attack on Israel... - Joe Biden's domestic approval rating will hover around 40% for much of the year, weighed down by the poor economy and general discontent with the results of Democratic policies on energy (high fossil fuel prices), crime (skyrocketing due to lack of law enforcement) and immigration (an unabated massive wave of illegals). As a result, at least one Democratic primary challenger will emerge before the end of the year. Meanwhile, on the GOP side, Trump's dominance of the candidate field will continue to slide, and by the end of the year there will be several announced primary candidates, with one of the alternatives to Trump--possibly, though not certainly, DeSantis--leading in the polls. The GOP-led House, in addition to blocking all but the most bipartisan legislative initiatives, will launch numerous investigations into Biden administration malfeasance, which will generate plenty of breathless headlines in pro-GOP partisan media but be largely ignored or ridiculed by the pro-Democrat mainstream outlets.
I apparently overestimated both parties' willingness to challenge their own weak, unpopular leaders, who look set to cruise to nomination despite their manifest electoral weaknesses.
- The Supreme Court's rulings on the anti-Asian discrimination cases will rule 6-3 that the two universities' practices are indeed illegally discriminatory, with the three Democratic-appointed justices dissenting but Roberts this time aligning fully with the GOP-appointed majority.
An easy one, but spot-on. (Well, sort of--Kagan recused herself, so it was actually 6-2.)
- Elon Musk will appoint a new CEO for Twitter, who will (per his instructions) focus on improving the user experience and increasing profitability, rather than policing user-generated content. As a result, Twitter's user base and net income will increase substantially, and the company will end the year financially much healthier that it appeared to be at the beginning--much to the chagrin of censorship supporters.
This is an interesting one--we don't actually know how accurate this prediction is, since Twitter/X is a private company now. (I suppose that's an argument for it having been a pointless prediction to make in the first place...) There's certainly lots of speculation that its business is weakening due to political hostility to Elon Musk, and the user population appears to be down slightly--as for all social media. But we don't actually know how the company is doing financially. In any event, as with most of my "cultural" predictions, this one is implicitly intended to pan out over the long term, even if not necessarily in the year it was made.
And now for this year's predictions:
- Juiced by the Fed's already-tipped plans to further ease its monetary policy, the economy and asset markets will continue to rise overall in 2024, with the caveat that inflation will also tick upward from its current 3% level, pulling bonds down slightly. Even cryptocurrencies will participate in the Fed-induced market frothiness.
- Donald Trump will defeat Joe Biden in the 2024 presidential election, after the Supreme Court blocks states from removing him from the ballot on 14th-Amendment grounds, and his lawyers succeed in getting his criminal trials postponed until after the election. Republicans will also take control of the Senate and expand their lead in the House, but by very little in both cases. The election will be accompanied by considerable unrest, but it will consist mostly of marches, sit-ins and the like, with relatively little 2020-style rioting. In fact, the press and other institutions will be remarkably resigned to the result, having recognized in advance this time that such an outcome was a real possibility. There will be the usual predictions of doom and threats to move to Canada, but nothing like the hysteria of 2016.
- The war in Ukraine will continue to grind on at a low level, with both sides too resource- and manpower-constrained, and too uncertain about the outcome of the US presidential election--with its enormous potential effects on the conflict--to make any bold moves.
- Israel will continue to grind down Hamas in Gaza for a few more months, as Western pro-Hamas protests gradually peter out. Eventually, political authority in Gaza will be transferred to some new entity--possibly Gulf-sponsored. Israel will also make some sort of deal with Hezbollah that involves a buffer zone on the Lebanese side of the border--as mandated by UN resolution 1701--thus averting a full-scale war between the two sides. Regardless, PM Netanyahu will not last the year as prime minister--his government, stained by the October 7th debacle, will fall, and a center-left coalition, probably led by Benny Gantz, will win the subsequent election.
- Elsewhere, the Iranian regime will continue to harass US troops via its proxies, and the US will continue to do only the barest minimum necessary not to appear to be abjectly capitulating to Iranian pressure. The alliance among China, Russia and Iran will further deepen, but China will continue its cautious, incremental power projection strategy--as its economic implosion continues--rather than launch any major attacks or invasions (e.g., of Taiwan).
- Claudine Gay will eventually resign the presidency of Harvard, but otherwise the Ivy League, and the rest of elite academia, will make only token gestures towards addressing their collective reputational collapse. Instead, they will focus on their rapidly mounting financial problems, as both donors and students flee in droves, the former in response to the institutions' declining prestige and the latter driven by newfound cost-consciousness.
- The proliferation of AI tools for common personal and workplace tasks, such as document composition and summarization, will make AI more familiar to its users and hence somewhat counteract the hysterical fears being spread by some AI "experts" about a supposed imminent AI-triggered apocalypse.
As always, readers are encouraged to respond to these predictions, and add their own, via the comments section.