A new year, and a new president — plenty of grist for my prediction mill, or, at least, for the obligatory January “predictions” column. Not that there’s anything special, really, about it: all punditry is prediction, in an important sense. Every time a writer advocates a particular policy or decries another, the author is predicting a certain outcome, good or bad. The question is, which policies will win out in the battle of ideas? As we look at the incoming administration, especially in the context of trends that have been building over time, a certain scenario begins to emerge, with the first act unfolding on the domestic stage:
- Hyperinflation and the collapse of the dollar. The trillions President-elect Obama plans on spending to “cure” [.pdf] our economic malaise will prove poisonous to the dollar, with hyperinflation an inevitability. Whether this reaches Weimar levels remains to be seen, but one can easily imagine all sorts of unpleasant, Weimar-like consequences.
- A barrage of legislation that aims to stop capital flight, including draconian economic controls on the movement of money across borders and the erection of a steep tariff wall in the name of “national economic security.” By the end of the year, we will have so many economic czars, each in charge of their own economic fiefdom, that Obama will have to appoint a czar-of-czars.
- More Israeli aggression. The Israeli offensive in Gaza is but a prelude to a series of IDF military actions, possibly including a third Lebanon blitz and an attack on Syria, the weakest link in the chain of pro-Palestinian regional actors. The whole point of this extended exercise is to involve the U.S. militarily. This will lead logically to the fourth not-so-great expectation.