Unforeseen Contingencies

"We" at Unforeseen Contingencies do not usually make annual predictions, but 2012 is a year that almost cries out for such. While we can't claim to have unusual abilities at forecasting, we can make a few educated guesses about what the future does and does not hold. Here are ten:

1. The various end-of-the-world predictions for 2012 will prove to be false. This one is easy. I have no idea why anyone would take the ancient Mayan calendar as an authority for anything, or why they'd put more faith in an invisible Planet X than in the complete absence of evidence for any such planet, or why they'd believe any of the other obviously silly doomsday arguments. But some do.

2. Someone in the "west" will engage in an overt military action against Iran. My "west" includes the U.S., Western Europe, Israel, Saudi Arabia, and the Emirates. (Pakistan doesn't count.) Overt action against on Iran includes attacks on the Iranian navy, but excludes cyberwarfare and infiltration by special forces (both of which are probably long since underway). So long as the Iranian nuclear program progresses and Iran acts in an increasingly belligerent fashion, conflict seems inevitable. If Hezbollah gets into another fight with Israel, I think this will also result in an Israeli attack on Iran. Conflict with Iran will not necessarily lead to an all-out Middle East war... but it might.

3. Barack Obama will win a second term, defeating Mitt Romney in a close race. I have gone out on a limb on this one, since Romney is not a shoe-in for the Republican nomination. But if Obama loses the election after the Republican fiascos we've seen in 2011 (the idiotic debt ceiling fight, the GOP opposition to payroll tax cuts, the primary circus) it will be entirely because of his own ineptitude. Republicans will stupidly conclude that they could have won had they "stuck to principle" and picked one of their crazy-coot conservatives, but in fact this would have resulted in an Obama landslide victory.

4. TBTF banks will increase in size and share of the financial sector. They are one of the biggest threats to the economy, and they are so well connected with both political parties that their position is "safe." (TBTF is by definition unsafe.) They'll continue to grow in power, in scope, and in "profitability," as they continue to suck the lifeblood from the economy.

5. The U.S. Supreme Court will fail to rule that the individual mandate in the Affordable Care Act is unconstitutional. There are several ways this might happen. They'll begin by hearing a challenge that the Anti-Injunction Act forbids them from considering the mandate until after it has gone into effect, and might agree. More likely, they'll simply agree that the mandate is within Congress' authority. The Republicans will snarl, but we'll never see any serious attempt to repeal the ACA.

6. The United States will make no progress in getting their debt problem under control. I admit it, with this one I'm just padding the list so I'll be guaranteed some hits. Might as well predict that the law of gravity will still be in effect in a year.

7. The Eurozone crisis will deepen. Greece will go bankrupt. Unless the Germans agree to subsidize the rest, the Eurozone as a monetary union will break up. In other words, I do not believe in the current fixes. And I doubt we'll see any genuine fix. But if you really want to see brilliant forecasting, read this old blog post from early 2006, in which Nouriel Roubini explains why the Eurozone crisis is coming.

8. China will undergo a sharp recession. China's real estate and infrastructure bubbles will pop sometime, and I'm predicting sooner rather than later.

9.India and Pakistan will go to the brink of war. And hopefully no farther. Pakistan is a basket-case of a state. It's almost certain that elements within the ISI had some role in organizing the Mumbai attacks in 2008, in protecting Bin Laden, and other terrorist activities. The Pakistani governing authorities seem to be at war with each other, but all share a deep fear of India and a fair amount of paranoia that the world is out to get them. It would not take a great deal for a renegade faction of ISI to "unite" the country by striking India and invoking a harsh Indian response. Crazy people with nuclear weapons...ugh.

10. The U.S. unemployment rate will be roughly unchanged at 9%. That I'm not predicting things to get much worse is something of a story in itself. Despite the inability of Americans to fix what's wrong here, turmoil in Europe, the Middle East/West Asia/Southern Asia, and China will keep the United States a safe haven for capital, and we'll muddle along.

I admit these are boring predictions...so here's one more that is interesting:

11. Scientists will announce discovery of life on a planet in another star system. In 2011 humans discovered earth-like planets in other systems for the first time. More will be found next year, and I predict that observation will reveal evidence of intelligent life.

Happy 2012!