While making political predictions for 2019 are fraught with
uncertainty (my last commentary) predictions on the international scene and on
the economy, guarantee almost certain disappointment. Nonetheless, I will pull
out the crystal ball and gaze into the foggy future.
The attempt by Great Britain to forge an orderly exit from
the European Union must be completed by March of the new year. I predict that the pessimists who see
economic collapse of Great Britain and substantial damage to the world economy
are wrong. We have been down this road before. The same negative thinkers
called for the end of the world at the turn of the century with the “Y2K crisis”
which failed to materialize. When the clock struck midnight in 2000 to ring in
the new century, the chickens continued to lay eggs and there was no collapse.
The same will be true for Brexit whether a comprehensive agreement is reached,
or not.
I predict that 2019 will be a worse year for the European
Union than for Great Britain. Populist
impulses will continue to gain strength. In Europe, political affiliations are
no longer being drawn along progressive versus conservative lines as much as
along globalist/humanist views versus those that favor cultural/ethnic
boundaries. 2019 will determine how this
monumental shift in sentiment plays out for the future of the European Union.
The hope that France would join with Germany to forge a
stronger union has been dashed by President Macron’s setbacks after the Paris
riots and by uncertainty in Germany as Angela Merkel’s government is
replaced. Italy is on the brink of an
economic crisis, which will affect all the member states.
I predict that ISIS will gain both territory and volunteers
in 2019. With President Trump taking
steps to remove troops from Syria and Afghanistan and the Iraq government
demanding withdraw of the American presence from Northern Iraq, conditions for
a resurgence are in place.
I predict that President Trump will continue to curry favor
from authoritarian leaders around the world including those in Saudi Arabia,
China, North Korea, Turkey, Russia and Brazil. Reaching hand shake agreements
with these leaders provides the President with instant gratification and
seemingly positive nightly news sound bites, even if long term meaningful
results are nonexistent.
I predict that a significant international event in 2019
will be the crisis in American-Latin American relations. Honduras, Guatemala and El Salvador are
fast approaching failed states with urban gang warfare, repression, and
political violence. Immigrants seeking a better life are flowing to the border
and asking for asylum. The Democratic
House of Representatives will introduce legislation to improve conditions in
these countries to stem the migration. President Trump will continue to lobby
for the opposite and call for ending financial aid to Central America. He will
continue to insist on fulfilling his campaign promise to build a wall.
In addition, the newly
elected leftist government in Mexico and the more conservative government in
Brazil will both take power in 2019. I predict that both events will call for
major adjustments in American foreign policy.
I predict that
international affairs will be a hot topic among Democrats seeking the
nomination of their party for the 2020 Presidential election. They will debate the Trump policy of
“winning”, which is something you do to stomp down other nation states versus
the traditional foreign policy objective of “leading” which is accomplished
with the cooperation of others.
On the domestic
economic front, I predict that the first 8-12 weeks of 2019 will be marred by
uncertainty and volatility as Democrats take over the House and gain their sea
legs. I predict that the middle of the year will be relatively calm with
moderate increases in the stock market averages as earnings surprises to the
upside are revealed and the trade war with China is resolved. Lastly I predict a return to volatility in
the latter part of the year as investors begin to worry about a long overdue
economic slowdown and possible recession.
The big economic
story for 2019 will be how little positive effect the Trump tax cuts have had
on the economy. Studies will reveal that
most of the savings realized by corporations were utilized to buy back stock
and not to make capital investments. It will become clear that wealthy
Americans chose to save their windfall tax decreases rather than to invest, and
to wait out the expected downturn in the economy. Increases in productivity and full employment
will not offset the losses in revenue from the tax cut (because a majority of
the new employment provided for untaxed low wages) and the deficit will
increase dramatically.
On the social
front, I predict that in America and around the world global warming will
replace 1) the “MeToo” movement and 2) the rise of populist political movements
as the prevailing issue of debate. Discussion will shift from how to prevent
global warming (that ship has sailed) to the most effective policies to limit
the adverse effects of global warming. Many
Republicans will finally join the call to address climate change in 2019, as
the economics of coal and combustion engines change for the worse and everyone
knowns someone who is directly affected by the adverse consequences.
By the end of
2019 many of the questions now on our minds will be answered. Sure things will
not materialize and unexpected results will have us all shaking our heads. Then we can start all over again in
predicting events in 2020.
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