Last night was one of those nights. I know you’ve had them. Insomnia sets in, your mind races, and light and sound seem amplified. Your partner’s breathing sounds like Darth Vader on helium while some portion of your subconscious has an annoying song stuck on repeat. Last night’s ditty was “What Shall We Do with the Drunken Sailor?” I heard the song in the morning and wasn’t aware I was filing it for later. I still don’t know what to do with him.
A Prediction for the Economy
So what do I think about when I can’t sleep? The economy. Don’t you? I realize not everyone is tormented by 2am economic analysis like I am, but I’ve been reading a lot of predictions from economists about where the economy is headed in 2012 and I had to sort it all out sometime. You won’t be surprised to learn that the predictions are all over the place. Some expect overall growth, some a decline. Others see certain segments of the economy growing, while another predicts the same segments will decline. But as John Kenneth Galbraith said: “Economics is extremely useful as a form of employment for economists” and I assume they were all paid for their opinions.
As no one is paying me for my opinion (and you get what you pay for) I would say you should expect nothing from the economy in 2012. While the fundamentals of many companies (especially blue chips) are stronger than they have been in years, growth remains relatively stagnant. Why? Fear. That’s right, fear caused by uncertainty is stagnating our economy. What has changed in the last year that will help ease uncertainty? Nothing. Specifically I’m referring to political uncertainty, as none of the tough decisions that need to be made by Washington were dealt with in 2011. Decisions on budget deficits, the debt ceiling, the Bush tax cuts, the payroll-tax holiday, and extended unemployment benefits were all deferred to 2012 and possibly beyond. While there are other factors contributing to global uncertainty, political uncertainty (and a loss of confidence in the political system as a whole) in the U.S. are major contributing factors to our economic woes. As a result, our economy will continue to stagger along like a drunken sailor in 2012.
For my prediction for the economy in 2012 I have to agree with Kehlog Albran in The Profit: “I have seen the future and it is very much like the present, only longer”.
Have a great new year everyone!
Image courtesy of Dream Designs
Arn’t predictions somewhat like dreams? We all love to predict but most predictions about economy, family, and future rely on present knowledge and lots of pre-conceived ideas. I do agree with the idea that the American economy will remain flat unless we are wanded with a new bureaucracy. Trouble with bureaucracy is that it generally serves itself and rides on the backs of those that created it. As M. Thatcher of Briton once said “The problem with socialism is pretty soon you run out of someone else’s money”. Kinda reminds me of US.
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