In Conan O'Brien's commencement address at Dartmouth this past year, he
made reference to the job market and the aging baby boomers (present
company implicated) holding on to jobs past their time because of the
recession (he was obliquely referencing Letterman of course).
As (if) the economy begins to recover, it would seem that there might be
many who delayed retirement, given the state of the economy (and return
on their savings) who will reach their threshold of security and go
ahead and relinquish a job to their grandchildren's generation. This
could generate a positive feedback loop, allowing the economy to
accelerate it's way back to a new series of bubbles to burst during
their mid-career.
I'm more than halfway expecting a strong recovery in the next 12 months,
only some of which can be attributed to Obama's policies... the rest to
the dynamics of the world economy including demographic artifacts such
as the graying of the Baby Boomers.
I feel a bit like a surfer bobbing on the swells, waiting to try to
catch "the next big one!", knowing I probably have only *one more* good
ride left in me... if that.
- Steve
A slightly abridged version of this opinion piece appeared in Sunday's
New Mexican:
http://www.foreignpolicy.com/articles/2013/01/02/the_coming_year_in_review?page=full
I love it: you don't need to guess, here's the news you'll be reading
at years end.
It has an awkward login, so here it is:
-- Owen
The Coming Year in Review
<http://www.foreignpolicy.com/articles/2013/01/02/the_coming_year_in_review>
The headlines we'll be reading in 2013.
BY DAVID ROTHKOPF
<http://www.foreignpolicy.com/author/DavidRothkopf> | JANUARY 2,
2013
As that great geopolitical theorist Carly Simon once observed, "We can
never know about the days to come but we think about them anyway,
yay." She then went on to say, as ketchup lovers everywhere remember,
"Anticipation, anticipation, is making me late...is keepin' me waitin'."
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Of course, the tortures of anticipation are well known to observers of
the slow-motion train wreck that has been Washington's management of
America's financial situation, or the recent, interminable U.S.
presidential campaign, or the hideously slow path to oblivion followed
by the Assad regime in Syria, or the painfully circular Eurofollies,
not to mention the gradual but undeniable degradation of the planet's
environment that goes on year in and year out despite our clear
knowledge about how to avoid the damage.
The time has come to say "enough." We live in an age in which the
average consumer expects instant gratification. There is no reason
those who are interested in the bigger issues taking place in the
world shouldn't have it too. For that reason, we bring to you the top
headlines that you will be looking back at when 2013 draws to a close
12 months from now. Think of it as the year in review, before it
happens. Yay:
*America Recovers*
Forget the fiscal cliff or the debt ceiling. Admittedly, that may
seem difficult given the headlines of the moment. The clown show in
Washington is diverting for inside the Beltway reporters and creates a
kind of artificial drama that makes one periodically wonder if Kris
Jenner were actually speaker of the House. But see the economy through
the eyes of the market. Washington dithers but hops to when it gets
slapped around enough by traders. Meanwhile, there are winds at
America's back: An energy boom. Housing markets recovering. Signs of
resurgent growth in key sectors. Other big markets a little soft and
international investors looking to the United States as a secure place
where the real protection of intellectual property can spur
innovation. Growth in Canada and Mexico. Insourcing as a real trend
bringing jobs back to the United States. That's why smart market
observers like Laszlo Birinyi, who were early to call the current bull
market, expect record stock market highs in 2013. In his view, people
are ready for the slump to be over and the prospect of a bull market
will be irresistible.
This has its downsides, in particular the concern that too much growth
will make Washington sloppy again, counting on a rebounding economy to
make up for its spending sins. But Washington has done us all a favor
by becoming so feckless and irrelevant that no one is counting on the
U.S. government to lead America out of the boom. Which will leave
growth in the hands of people and companies who understand it. Which
for Barack Obama, John Boehner & Co. ought to have them remembering
that old lyric from "Pippin": "it's smarter to be lucky than it's
lucky to be smart."
*China (and Some of the Rest of the World) Recovers*
American growth will help even if it is modest. But the United States
can no longer be the world's locomotive as it once was. It needs help.
China hands I have spoken to think 8-9 percent (or even slightly
higher) growth in 2013 is likely. This would be a return to roughly
2011 growth levels after a 2012 slump that started to reverse during
the second half of 2012. Europe experts think the worst of the crisis
may be behind them. Some emerging markets (see below) may show signs
of real life even as others (Brazil, Argentina, India) continue to
struggle for a while. The net net: 2013 will be the year that the
five-year slump associated with the Great Recession really comes to an
end, even if many don't feel the benefits for some time to come.
*Assad Collapses, Syria Festers, and the Mideast Trembles*
Bashar al-Assad is toast. The Syrian leader's Iranian and Russian
supporters are already desperately in Plan B mode. His local backers
are shifting their last assets out of the country and heading for the
hills. The problem is that with his downfall will come a period of
transition to a new regime that may introduce a new term to the
geopolitical lexicon: "the fog of peace." As many members of the very
uncohesive opposition are bad guys, troublemakers, or potential Assads
as there are any who seek a more democratic or at least vaguely
civilized future for the revolution-torn country. Instability in
Syria means problems for its neighbors, including Jordan (where
refugees add to growing threats to King Abdullah and his family's long
reign in that country), Turkey, Israel, Iraq, and Lebanon. Perhaps
most affected will be the latter two as Iran shifts its regional
hegemony chips onto those spaces. As for Iraq, the year should see
more stirrings of trouble in the country the United States invaded a
decade ago and about which George W. Bush once declared "mission
accomplished." In fact, Obama and incoming Secretary of State John
Kerry will find they spend much of the next four years trying to avoid
having it look like both big American wars in the region actually
resulted in on-the-ground realities that were the same or worse as the
ones we found prior to going into those combat zones. Iran's doubling
its bets on Hezbollah also, of course, will have implications for its
other client in the neighborhood, Hamas, making Israel-Palestine peace
talks harder. And, of course, the embarrassment of backing Assad won't
look good for the regime in Tehran at home - especially at a time when
economic sanctions are really taking a toll. That'll make them more
nervous and less predictable. (See below for the upside.)
*Bibi Netanyahu Irritates the World*
A key to good prognosticating is always to throw in a few sure
things. Predicting Bibi Netanyahu will irritate the world is like
predicting that the U.S. Congress will fail to come to grips with
America's deficit problem or that Lindsay Lohan will get in trouble
with the law. We've seen this movie before. We don't like it but when
in doubt, the universe repeats itself. The rich get richer, the poor
get poorer, success breeds success, tomorrow's weather has an 85
percent likelihood of being the same as today's, and the Israeli prime
minister is-no doubt with the best of intentions-a dependable pain in
the world's tush.
*No War with Iran*
Iran has problems (see above). Sanctions will make them worse. They
want time. Nobody wants a war. Iran will test the world's patience,
push it to the brink, then "settle"...buying time until the next
revelation it is not playing by the rules and the next cycle of
brinksmanship. In the end, this approach is more than likely to ensure
they will become "nuclear capable" and trigger a new arms race in the
region and among emerging powers everywhere. But that won't happen in
2013. And that will pass as successful diplomacy -- until it turns out
to have extraordinarily high hidden costs.
*Meet the New Bosses, Same as the Old Bosses*
In addition to Assad, 2013 will see the departure of Hugo Chavez and
Mahmoud Ahmadinejad. In Syria, the fall of Assad will produce a power
struggle and in the world's desire to produce stability, it is likely
to bet on anyone tough enough to hold the place together. Which is
likely to be a not very good guy. In Venezuela, the death of Chavez
after his long battle with cancer will produce a successor regime that
is increasingly weaker but attempts for the near term to ride sympathy
for the departed Bolivarian bully. In Iran, President Ahmadinejad was
never in charge in the first place so while the guy who takes over the
presidency may change, the power remains with the Ayatollah-in-Chief
as it has since the revolution. In short, we won't miss these bad guys
when they go, but we're likely to get new ones and new problems in
their place, at least in the short term. In fact, with the Middle East
a creeping mess and with developed countries focusing on bigger
problems at home, we are in a period that may, like the 1960s, see the
world's major powers inclined to buy into a new era of strongmen who
will keep a lid on their countries even if a few basic human rights
have to get violated along the way. (Don't worry, though, we'll have
elections so that the 21^st century bastards smell nicer than the
ones we had back when colonialism was in its death throes.)
*America Enacts Immigration and Gun Reforms*
The U.S. Congress is dysfunctional-but it is not stupid. Ok, maybe it
is stupid, too. But it is nothing if not self-interested. Some
progress on some legislation will be made. Expect passage of bills on
assault weapons and some ammo bans possibly even before we even get to
the next round of fiscal brinksmanship. Expect movement on immigration
reform, which has supporters in both parties and should be easier in
an economy trending upward. On everything else, expect the usual
collective exercise in goat husbandry.
*Gold Bubble Bursts*
It has to happen sooner or later. Strengthening economies will soon
lead to strengthening currencies. Or at least less aggressive U.S.,
Chinese, and European efforts to devalue their currencies. And when
that happens people will start to realize that even golden trees don't
grow to the sky. In the United States, where buying gold has taken on
a political tinge as some on the hard right and Paulistas buy gold as
a way of expressing their hatred for the Fed, the central government,
and modernity, the gold crash will hit one political side harder than
the other. Couldn't happen to a nicer bunch of economic troglodytes.
*Mexico and Indonesia are the "Next BRICs" Everyone Is Talking About*
Mexico will be the Brazil of 2013. (I know this because it was already
the Brazil of 2012.) New regime. Finally likely to get to some
Pemex**reforms. Fourth-largest shale gas reserves in the world.
Benefits as manufacturing facilities move from difficult-to-work-in
China and back closer to the United States. As for Indonesia, this is
the big country that emerging markets investors are starting think is
showing renewed signs of life after a prolonged (15-year) struggle.
Lots of people. Lots of energy. Low priced manufacturing. Close to big
markets. And now, gradually, the government is starting to get its act
together, somewhat. (Indonesia is still a state with strong
anti-central government tendencies, which can work for many investors.
Corruption does remain a problem, however.)
*China Strains Against the Limitations of Its System*
Look at China's recent hamfisted effort punish the /New York
Times/ for publishing the truth about corruption among its elites.
Some see in China's recent moves efforts to echo U.S. "hard power"
with expansion of its Navy and investments in next-generation forms of
warfare from space to cyber to unmanned drones, and U.S. "soft power"
through the use of their checkbook and the influence it buys. But most
telling is what might be called their use of "brittle power": Denying
visas, cracking down on Internet freedoms, squabbling with the
Japanese over deserted rocks all fall into this category. At first
glance the power may seem hard enough but it is actually a sign of
weakness, not strength, and it can crack and crumble away quickly,
revealing the real structural problems the new leadership is going to
have to find better ways of tackling.
***
The year**2013 will also see big stories that are easy to predict but
hard to fill in the details-more climate-driven disasters, more
scandals in financial markets and among emerging markets elites. And
it will see stories more important than all those above that don't get
enough ink. Climate change is one of these of course.
*And Then, There Is the Greatest Social Failure of Our Era...*
The larger looming story that troubles me even more is our continuing
failure to protect women or their rights. The U.S. in particular is
going to face some very difficult choices in the year(s) ahead on this
point. Are we so eager for closure in Afghanistan or stability
elsewhere that we are complicit with putting in power regimes that
will continue to suppress the majority population, deny them
education, deny them protection under the law, allow them to be abused
under the protection of barbarous and indefensible "cultural
traditions?" Will countries like India continue their tradition of
failing to enforce the law against rapists who prey on their women, as
in the case of December's horrifying Delhi gang rape? Will the gunmen
who targeted Malala in Pakistan continue to seek to intimidate those
who emulate the courageous schoolgirl? Will women continue to be
under-represented economically and politically in almost every country
in the world? My fear is that the answer will be "yes" and that in
the year ahead we will see even the world's most progressive and
enlightened powers continue to feed the greatest global social failure
of our age, by looking away and accepting the unacceptable.
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