2012 Predictions

Many bloggers and prognosticators celebrate the start of the New Year with a look, sometimes serious, sometimes frivolous, at what they think will happen in the New Year. 

For me, it's hard not to look at 2012 with a great deal of pessimism - which for me is a change from the optimism I usually have starting a new year. 

In terms of the economy, I do not see the US achieving more than 2% GDP growth during 2012.  The consumer will continue to feel that the economy is stagnating.  Unemployment will not drop below 8.3% prior to the November election - and there will be numerous accusations that the Administration is fudging the numbers by continuing to remove large numbers from the pool as having given up their job search.  The 'real' unemployment number will be around 16% - 17%. 

Spending will continue nearly unabated throughout 2012 - and we'll be posting another annual federal budget deficit of over $1.2 trillion.  There will be no FY2013 budget in place for the start of the fiscal year on October 1st - and there will be a brief government shutdown that will add turmoil to the Presidential campaign as both sides argue over a continuing funding resolution to fund the government (and increase the national debt limit) from October 1 to January 31, 2013.

The US will receive another downgrade of its debt in September - a move that the Administration will cry is politically motivated.

On the US political front - the scandals around the crony capitalism of the Obama Administration (Solyndra, Solar Millennium, MF Global), Fannie Mae / Freddie Mac, Fast and Furious, and the Administration's continued efforts to impose it's agenda via regulatory fiat will damage the Administration and the President. 

Several key members of the Obama Cabinet will resign / be forced to resign.  Leading candidates include the Secretary of Energy Chu, Secretary of Homeland Security Napolitano, Attorney General Holder, HHS Secretary Sebelius, Secretary of Education Duncan.

Jon Corzine will be indicted for his role in the misappropriation of $1.2 billion in client funds during the failure of MF Global - he will be found guilty and sentenced to 10 years in prison.

The President will reject the building of the Keystone XL pipeline seriously damaging our relations with Canada.  This becomes a big campaign issue.

The media will conduct an unprecedented and unrelenting 'war' against the Republican nominee for President and the Republican party - going further into the bag for Obama and the progressive Democrats than they did in 2008.  Polls will fluctuate greatly - with the President generally leading the Republican candidate even through the brief October government shutdown. 




However, on Election Day, pundits will be surprised as Pennsylvania goes Republican despite large evidence of voting irregularities in Philadelphia and Pittsburgh...and the President will lose his re-election bid - 315 electoral votes to 223. 

In the House, the GOP will retain their majority - holding around a 20-22 seat majority.  In the Senate, the GOP will have a net gain of about 6-8 seats - giving them a 3 to 5 seat majority.  Outgoing Senate Majority Leader Harry Reid promises that the Democrat caucus will do unto the GOP everything they can to impede and block any forward motion by the GOP Administration.  This will anger Connecticut Senator Lieberman (Independent) who will move to caucus with the Republicans.

OccupyWallStreet will turn out to be a major negative influence on the voter - and while the President will win the black, hispanic, and youth votes - the margin of his majority in the latter two groups will be down considerably from 2008 - and only slightly in the first.  Independents will go against the President by 60%...

Wisconsin Governor Scott Walker will win his recall election as Wisconsin continues to improve on the basis of the fiscal reforms he enacted.  He will be a surprise consideration for the Vice President slot on the GOP ticket...but ultimately remain in Wisconsin.

The Supreme Court of the United States will vote 5-4 that Obamacare is unconstitutional because of the individual mandate and that the mandate cannot be severed from the healthcare reform bill - upholding the lower court ruling.   They will also, by a vote of 5-4, uphold the Voter ID laws being attacked by the Attorney General - and as a result, invalidate Rule 5 of the Voting Rights Act.  In doing so, they will also repudiate the Attorney General in no uncertain terms for his use of the race card. 

Finally, the Supreme Court, also by a ruling of 5 to 4, with Justice Kennedy as the swing vote, will uphold the Arizona immigration law finding that the refusal of the Obama Administration to uphold federal law leaves the states with no recourse.  They advise the Administration to either enforce the immigration laws or repeal immigration laws.

The California Supreme Court will uphold the lower court case ruling against Proposition 8.  This will have the SCOTUS take up the case in the session that starts October 2012 and they will issue their ruling in early 2013.

Governor Brown's efforts to increase taxes via November vote passes - but the state's economic troubles worsen significantly.  California's borrowing costs spike significantly - and the outflow of population increases significantly with the middle class leading the way.  Comparisons to Greece become commonplace.

Hollywood has another dismal year.  Apple releases the iPhone 5 and iPad 3 to wide acclaim but the new Apple TV fails to ignite.  Google's and Microsoft efforts to compete with Apple fall far short.  Microsoft's release of Windows 8 is comparable to the release of Windows 98 - it's ok but not great. 

Sarkozy is defeated in his election effort.  By the end of the year, France will become, with Spain, Portugal, and Belgium, one of the most economically troubled countries in the EU.

Britain will face a new Falklands crisis as Argentina seizes the islands once again.  Unlike the earlier conflict where the US sided with Britain, President Obama will side the US with the Argentinians - and Britain lacks the military strength to retake the islands. 

Russia will see more turmoil as Putin wins a highly disputed election for a new term as President.  He will move closer to a dictatorship as he imposes martial law against demonstrators protesting his election.

In the Middle East region, President Obama will announce 'peace' terms have been reached with the Taliban in Afghanistan and withdraws all US troops out before the 2012 election.  This will backfire as the Taliban retakes the Afghan government.  Pakistan totally breaks ties with the United States and allies with Iran and China.  They provoke terror attacks and limited military actions in Kashmir.  The hesitancy of the Obama Administration to reach out to India becomes a campaign issue.

Iran successfully tests a nuclear weapon via a missile launch into the Indian Ocean.  Saudi Arabia announces that it has purchased a dozen nuclear warheads from Pakistan.  Oil prices spike to $200 / barrel as the arms race intensifies in the region. 

Egypt, under control of islamists, cancels the peace treaty with Israel.  Hezbollah strengthens its control of Lebanon and effectively takes control of Syria after the Assad regime falls.  Provocations against Israel increase by Egypt, Syria, Iran - and in the United Nations.  President Obama sides with the islamists against Israel and threatens Israel with an end of US assistance if they do not accept a Palestinian state by the end of 2012.

Iraq will fall into civil war based on the sectarian divides and interference from Iran.  The President will deny his withdrawal of US forces as being a reason for the violence and blame the invasion by Bush 43 for the problems in the country.

In South / Central America - the carnage in Mexico continues as the government fights the drug cartels.  The violence will exceed that in Iraq during pre-surge fighting.  Iranian missiles will be found to be based in Nicaragua, Bolivia, and Venezuela - in a new challenge to the Monroe Doctrine.  The death of Hugo Chavez from cancer and the establishment of a pro-US government (like in Columbia) defuses the crisis - and the new government orders Iran to remove their missiles.  The other nations quietly do the same.

The DPRK will undertake several major provocations against South Korea during the year - costing more South Korean lives.  They will also launch a missile test that will land halfway between Hawaii and the US West Coast after overflying Japan.  This will be within weeks of Iran's Indian Ocean test. 

China will refuse to rein in their leash on the North Koreans.  This combined with China's growing economic challenges and their increased use of force / intimidation to threaten their neighbors over natural resources will bring the Chinese US relations to their worst levels since the Nixon visit to China.  China will stop purchasing US bonds and selling several trillion - which the US government buys via printing additional funds.

China will also increase their threats against the Republic of China - demanding Taipei rejoin the PRC or else face military force.

The challenges of the year will reinforce the demands of the new Administration for the UN to either reform or be dismissed as irrelevant.  Statists around the world denounce the new US Administration...but real efforts get underway to establish a new alliance of like minded Western / Pro-Western nations.

The Mayan prediction of the end of the world on December 12 / 21st will prove false, but December 2012 will see a major earthquake along the US West Coast that exceeds 7.0.