It is that time of year again when the media will be filled with a host of predictions for all sorts of things from the ridiculous to the sublime and a little bit of everything in between. It is the season that brings it out since we have this artificial timing event called a New Year. The Sun and all the stars in the heavens don’t have a new year they just keep on moving along without reference to any clock. But we humans like to mark the passage of our lives and the events in our lives and we have created the concept of time and years and seasons. I am glad we have. It gives some order to life and helps us put matters and events in some perspective. I for one like it that we divide the passing of the Sun from east to west into hours and days and the orbit of the earth into years. Mother Nature may not need a clock or calendar but I believe we do. As I have written before I have always thought that September 1st would be a more logical time to have a new year because so much more changes at that time of year. The crops come in, the kids start to school, vacation time is over and there is even a more dramatic change in the weather from summer to the fall. But alack and alas I fear I am a lone voice in the wilderness on that one.
We must use caution as we inspect these predictions that will be made. The economy rarely follows along a path as predicted in the beginning of the year. Inevitably there are events that occur in the world or right here in our own backyard that turn things in a different direction than we anticipated at the start of the year. A trend can be predicted but the individual spikes and lows are another matter. The aging of the Boomers will continue and we can rely on that but every result of that fact is much foggier. The bigger and more sweeping the prediction the more caution I advise you to employ. Thankfully for example Rachel Carson’s predictions in the Silent Spring mostly did not come true. If she was right we would already have a smaller population because of starvation in the world. She missed the boat on all her predictions about the science of agriculture. The Green revolution did occur and millions in the mid east and Asia are alive today and have a better standard of living than they would otherwise if that had not occurred. We did not pollute ourselves to death either. The world is a cleaner place than it was 40 years ago. She forgot the one factor that is a constant–change. Things do change and sometimes the outcomes of those changes are dramatic and can’t be forecast with precision. Then of course there are the unintended consequences of our actions. They are never predictiable other than to predict that there will be those consequences not envisioned.
The economy will move. For some this will be a banner year and for others it will be a very rough year. I have no idea if the Market will move up or down. But regardless of direction there will be those who figure out how to profit from their business or idea in ’09. I also predict that the politicians will be active in the coming year as they are bent to do. New laws will be passed. It will take years to determine if those new laws are efficacious or harmful. Upon passage each new law will be hailed as a great advancement for Mankind. Whether it is an advancement or a retreat will be evident later. Never trust the initial announcement. One way or another every new law passed cost money. We are spending more than we take in now as a nation and the supply of money is finite. Oh, I know the Government can always print up new money. But that will diminish its worth. There will be no net gain in the total value of goods and services we can provide except through greater productivity. I believe we can achieve some of that increase in the years to come. But the influx of “new” money might outstrip that value and thus the value will hold steady. Even the politicians have not figured out how to get a free lunch. They all know how to promise one but delivering one is another matter.
It is like Nostrodamus, if you say enough and use vague and arcane language then sooner or later something will match up but that is more likely mere coincidence rather than accurately forecasting the future.