I just gave you my scorecard for my predictions for 2011; if you missed them, you can find them on LiveJournal or on DailyKos. Now, I present my predictions for 2012. As usual, I'll grade myself on these a year from now -- but feel free to print them out or save a PDF to keep me honest!
- Barack Obama will be re-elected to a second term as President.
I can point to all manner of scientific polls from Rasmussen, Gallup, PPP and so on, that indicate that he would beat Mitt Romney (the likely Republican nominee) by several points in a head-to-head match-up. (Note: this is the best case scenario for the GOP -- if anyone else gets the nomination, they're toast.) However, those polls aren't the gold standard a year out, and in the long term, this isn't really interesting. What is interesting is what Obama has done this year, which is quietly destroy the conceits that form the Republican brand. This brand took decades of work from activists like Karl Rove and Grover Norquist, and it took Barack Obama, with some help from the Tea Party, a little less than a year to undermine it.
The Republicans are supposed to be strong on defense - Obama's deft handling of Libya and the European crisis, not to mention finding and killing Osama bin Laden, pretty much gives them no leverage here. Republicans are supposed to not raise your taxes - yet they just managed to almost do just that on 160 million Americans, and the public knows it. Republicans are supposed to be fiscally responsible - several budget crises from the Federal level on down have wrecked that image. All it takes now is a few hammer swings from the President (who is, let us remember, a very deft campaigner) to reduce the entire brand to rubble. Once that's done, all the GOP will have to run on is "we hate Obama."
Which brings us to another reason why Obama will win - his approval ratings are starting to inch back up, now that it looks like he's scoring some victories. The appearance of economic recovery (see #4, below) will also boost his popularity. The sum total in 2012 will be a Republican Party without a vision to present the country running against a President who's popular just in time. 2014 won't fare much better. In fact, the GOP is going to have to work very hard to repair the damage by 2016.
- John Boehner will be ousted as Speaker of the House.
Right now, John Boehner has two major factions that want to unseat him as Speaker; both have a good chance of doing so. The first, of course, is the Democrats. In addition to the progressive resurgence that I see above, there's also the fact that voters really, really hate Congress right now. Thus we have all the elements necessary for yet another wave election. If it wasn't for some recent redistricting shenanigans in Pennsylvania and Ohio, the Republicans would be toast. Right now, their control of the House just seriously threatened.
The second faction, of course, is the Republicans. He might be Speaker, but he doesn't have much support from his fellow Republicans on anything. The Tea Party caucus, in particular, wants to get rid of him, and they will probably find a way to replace him with Eric Cantor before the year is up. Whether they do it before the election or after the election is a difficult question.
Either way, whether he loses the Speakership because of the election or because of his own party, the smart money is that Boehner's speakership will be dead, or effectively dead, by December 31st, 2012.
- Democrats will just barely hold on to the US Senate
The dynamics that favor the Democrats in the House do not favor them anywhere nearly as well in the Senate. The factors that help Obama - the progressive narrative and the destruction of the Republican brand - are almost cancelled out by the "throw the bums out" factor that helps Democrats in the House. What's left is the opportunities for each party to win new seats, and here, the landscape favors the Republicans. Democrats have one very good pickup opportunity in Massachusetts, where Elizabeth Warren is going to crush Scott Brown. They also have a fair shot in Nevada (where it's tied) and might also have opportunities in Arizona (which has trended blue of late) or Maine (if the Tea Party goes after Snowe). The Republicans, on the other hand, have fantastic pickup opportunities in Nebraska (where Ben Nelson might be less popular with Democrats than with Republicans) and Montana (where Tester (D) consistently polls just behind Rehberg (R), and where Sen. Tester, Rep. Rehberg and Max Baucus (D) are threatened with recall), and a fair chance of winning a seat in Missouri. I would not be surprised to see the Republicans flip three seats in the Senate by beating McCaskill (MO), Nelson (NE) and Tester (MT). They could flip a fourth seat by successfully recalling Max Baucus and replacing him with a Republican as well, although the chances that they could do that without Rehberg also being recalled (and thus hurting his chances against Tester) are slim. Nonetheless, if they thread that needle, the resulting three-seat GOP net win would leave it tied, 50-50, with Vice President Biden being the tie-breaking vote.
To win four seats (and control of the Senate), the Republicans would need to prevent the Democrats from flipping NV, AZ, ME (easy), and then themselves flip MO, NE, both seats in MT, and another seat. The only other seat I can see them flipping is in North Dakota, where Kent Conrad is retiring and Heidi Heitkamp (D) is polling well against Rick Berg (R). I don't see this happening if the Republican brand is in as bad a shape as I think. Alternatively, they could prevent the Democrats from flipping Scott Brown's seat, which is going to be damned near impossible.
- The US unemployment rate will dip below 8%.
This is the "official" rate, otherwise known as the U3. There are two factors that will drive this rate down, one good, one bad. The good is that the economy will continue to grow and will continue to add private sector jobs (public sector job losses will probably continue, unless Obama manages to push through a package to give aid to state and local governments). The bad is that people will give up looking for work, or settle for part-time work that doesn't pay anywhere near as well as their last job. Either way, they'll no longer be counted by the "official" U3 rate. The unemployment rate that covers the persistently unemployed and the underemployed people, the U6 rate, is now hovering at around 16%, and will not go down anywhere nearly as quickly as the U3 rate.
- Inflation will remain below 10%.
For the second year in a row, I am putting right wing hand-wringing about hyperinflation to the test. The most conservative definition of hyperinflation is that it represents a doubling of prices in the space of three years or less. In order for that to happen, we need an inflation rate of a little less than 26% for three years in a row. In 2011, it was 3.4%. I doubt it goes much higher in 2012. Persistent slow economic growth and the threat of austerity will guarantee it. The one point in the hyperinflation camp's favor - the creation of trillions in fake money to cover the losses of the largest banks - is negated by the fact that more than 99 cents out of every dollar of this fake money will never enter general circulation. It also bears repeating that we should consider ourselves very fortunate indeed to not be in a deflationary spiral right now.
- The European Union will hold on .. barely.
The first world is still contending with a major banking crisis. The largest banks hold trillions in worthless securities, which, if not properly disposed, will, sooner or later, bring about another 2008-style credit freeze. We've gotten around this in America by creating enough fake money to make up the difference (see above). Europe is not so fortunate, because while they have the central bank required to pull of this trick, they have 26 different economies, each with different rules and different banking systems, that make what is already a very difficult task nearly impossible. Poorer member nations are having to use public funds to bail out their banks, and then cover the cost with severe austerity measures. In 2012, this same dynamic is likely to spread to wealthier member nations - meaning, the kind of strikes that are crippling Greece right now will be crippling Italy and France next year, and possibly the United Kingdom as well. Eastern Europe looks somewhat better, but really, the only nation that doesn't look like it will have to go down this path is Germany.
Nonetheless, the bottom line is this: the EU will hold on, because the wealthy need it to hold on. If Germany can't do the job, then the United States, Russia, China and Japan will come to their rescue. The US and Russia will do this to save a major trade partner. China and Japan will do this to help their Russian and American trade partners. And the EU will continue, perhaps on life support, for the duration. The alternative to this is a serious disruption of Atlantic trade, and not enough of the oligarchs benefit from that to let that happen.
- Protest movements in the US, Russia, Europe and MENA will accelerate.
The Arab Spring, Occupy Wall Street, the anti-Putin demonstrations in Russia, and the anti-Austerity demonstrations in Europe, all have the same root cause: there is an elite that is doing quite well while the middle class is getting squeezed out, and the middle class is pissed. Little has happened to ameliorate this root cause.
In Egypt, where the Tahrir movement managed to oust Mubarak, there is still an Army elite that has effective control as the Muslim Brotherhood and their allies try to (democratically) move the country towards an Islamic state. The liberal youth who started that movement are not happy, and will likely continue demonstrating for the duration. Meanwhile, protest movements in Syria, Bahrain, Jordan and Saudi Arabia will continue to grow, because, again, the same root cause is there.
In Russia, hundreds of thousands of anti-Putin protesters have been showing up at weekly demonstrations in Moscow to protest what they believe to be election fraud. Their movement is just getting warmed up. The way the European crisis resolves itself will not make the European peoples much happier than they are now. And Occupy Wall Street, in my estimation, isn't going to to away until the U6 unemployment rate goes back down to below 12%. That won't happen for years, if it ever does. Until then, it's going to keep evolving. This year, Wall Street mostly made fun of them. Next year -- if the recent hacking of Stratfor is any indication -- it's going to frighten Wall Street out of their wits.
- The US will substantially reduce its troop presence in Afghanistan.
Last June, President Obama has pledged to get 23,000 troops out of Afghanistan - in effect, to end the escalation that he started there - by the end of 2012. I'm basically stating that he will not deviate from this plan.
- Oregon will win the Rose Bowl.
Oregon will be at their third bowl game (and second Rose Bowl) in three years. Wisconsin will be returning to the Rose Bowl for the second time in two years. Oregon's gimicky offense will actually work against them here, but they also have the better defense, and a very win-hungry LaMichael James (who needs an impressive win to secure a better NFL contract).