It's that time of year when all serious writers, or even people like me, cast their eyes toward the future and make meaningless predictions about what is to come. Since no one, including me again, is likely ever to look at this blog to see if I was right, I proceed fearlessly.
First, on the economic front: the leading economic indicators show some recent improvement. Even websites such as zerohedge which depend, for their very existence, on an unabated flow of disastrous econ news have been forced to acknowledge that some things are getting better. Mostly these things are of little benefit to the millions and millions in the abandoned lower and lower-middle classes, those on food stamps, unemployed, scrambling to keep body and soul together. 2011 will be another bad year for them. In the increasingly merciless form of pure capitalism which dominates the American scene, where even Christians believe that if someone is starving he probably deserves it because of character flaws (i.e., insufficient money), we leave the dead and broke behind and move on toward a Darwinist Utopia. Thus, next up: a curtailment of future Social Security benefits, sanctioned by our proto-Republican President in his upcoming State of the Union, and a gradual paring back of Medicare. With a House of Representatives full of Tea Party thinkers, those delegates ensconced by Fat, Dumb & Busted Americans trained to vote against their own economic interest, the entitlement programs will at last be under serious attack.
The American standard of living, based for the last thirty years or so on the housing market and house-as-ATM and retirement plan, will continue its inexorable sagging toward an Asian (Chinese) mean. There can be no miracles in this regard, folks. Prosperity depends on most people having a good, productive job, and we've sent most of those away. The housing market no longer takes up the slack; thus, how do we continue the consumer jubilee? The best we can hope for is that the descent is more gradual and less disruptive, as Americans adjust to their new, lower station in life. The Federal Reserve seems as though it's beginning to get the message, that the housing bubble cannot be reinflated without ruinous debasement of the U.S. dollar.
My reading, listening and watching lead me to believe that the next major economic hurdle facing the U.S. of A. is the insolvency of its constituent parts, that is, the states. The states and local governments are going to have to choose between paying their current and former (pension) payrolls or paying their bondholders. Big, populous states such as California, Illinois, and New York are involved in such excruciating calculi. I think this is where the Federal Reserve, having ridden to the rescue of Wall Street and Europe during 2008 to 2010, will next focus the powerful beam of its Magical Money Hallucination Generator. The Fed will "purchase" state and municipal bonds to stop a wave of defaults which will otherwise bring the roof down on the populace's heads. This at least is a more manageable job than the previous attempt to reinflate the housing bubble. Probably a trillion or two, chump change in Bernanke's world, will do the trick and buy the states and cities time to bring their programs into line with the general lowered expectations of America as a whole. Bernanke's willingness to conjure money out of thin air and to "appropriate" dough where the skinflint new Congress will not will of course cause all kinds of political convulsions, and that will be a big story line next year, especially with Ron Paul riding herd on the Fed. But we've all gotten used to doing things in a completely illegal, unconstitutional way, and it just doesn't matter anymore.
And as for war, and rumors of war: Obama may actually propose a budget for this (2012) fiscal year, unlike last year when he never got around to it, and there will be no decrease in the defense budget. Maybe a slight increase, although the Ungrateful Nouri over in Iraq remains adamant that the U.S. will leave his country at the end of 2011 as promised in the Status of Forces Agreement (SOFA). Smart move on his part; he's probably noticed that we have bases in Germany and Okinawa that were set up in 1945, and if he's going to pull this off, it's best to do so with a President who practices a form of preemptive submission when confronted with any challenge. What will happen to our "permanent" bases in Iraq? And that $12 billion embassy? How would you like to be posted with the foreign service in Baghdad, just across the border from Iran, with no U.S. military as backup? That's a weird one. We're going to leave the embassy staff in the gentle clutches of the Ungrateful Nouri, who is in league with Muqtada al-Sadr, who's already declared war on the U.S. once. What are we, nuts?
Afghanistan will drag on, of course. We have to have at least one shooting war and Afghanistan will have to do until North & South Korea actually get into real warfare, which could very well happen in 2011. That will be the new tour of duty for soldiers rotating home from Iraq.
American culture will remain the same dismal swampland of the lurid and meretricious. So be it. I still have my Complete Annotated Works of William Shakespeare, so I'm alright, Jack. Let us remember, as the Bard would have it, that it's not all that serious in the final analysis. Prospero said so:
Our revels now are ended. These our actors,
As I foretold you, were all spirits, and
Are melted into air, into thin air:
And like the baseless fabric of this vision,
The cloud-capp'd tow'rs, the gorgeous palaces,
The solemn temples, the great globe itself,
Yea, all which it inherit, shall dissolve,
And, like this insubstantial pageant faded,
Leave not a rack behind. We are such stuff
As dreams are made on; and our little life
Is rounded with a sleep.
As I foretold you, were all spirits, and
Are melted into air, into thin air:
And like the baseless fabric of this vision,
The cloud-capp'd tow'rs, the gorgeous palaces,
The solemn temples, the great globe itself,
Yea, all which it inherit, shall dissolve,
And, like this insubstantial pageant faded,
Leave not a rack behind. We are such stuff
As dreams are made on; and our little life
Is rounded with a sleep.
