The New Yorker’s guide to playing Nostradamus for 2014
Want to sound like you know what’re you’re talking about, when prompted for opinions on the outlook for 2014 when at a dinner party? The New Yorker provides a cheat-sheet on world events that will matter in 2014 based on the developments of the previous year, so that one can make impressive-sounding informed predictions for the year.
1. Can Obama recover? Sure he can. After all the troubles of the past couple of months, his approval rating is already rebounding a bit. According to the Gallup daily tracking poll, he ended 2013 with a forty-four per cent approval rating. That’s not great, but it’s higher than his numbers throughout much of 2010 and 2011. Surprisingly enough, it’s also higher than his ratings in the summer of 2012, just before he waxed Mitt Romney in the general election. How high can Obama go? That depends upon the answers to the next two questions.
2. Will the economy accelerate? Yes. Barring some great cataclysm, this should be the year when G.D.P. growth finally rises above three per cent—a rate of expansion it hasn’t seen since 2005. According to the latest figures, all the major sectors of the economy are picking up, withmanufacturing and construction leading the way. Job creation has increased, and economic-policy decisions are helping. The Fed remains committed to keeping interest rates at record lows, and the recent budget deal between Democrats and Republicans means that fiscal policy will be a bit less restrictive than it was last year, when it reduced growth by about one and half percentage points.
3. Will Obamacare work? Yes, but there will continue to be problems. On New Year’s Eve, the government announced that six million Americans had already signed up for health coverage. About 2.1 million have found private insurance policies through the online exchanges operated by the federal government and the states; another 3.9 million have signed up for the expanded Medicaid program. So much for the idea that the Affordable Care Act was unworkable.
The potential problems are threefold. Enrollment through healthcare.gov, although it has picked up sharply, remains below the Administration’s projections. And it’s not clear who is signing up. If, as some observers suspect, it is mainly older people and folks with preëxisting conditions, then this will create problems for the insurance companies, who will be tempted to raise prices for 2015. That could lead to more complaints about people losing their existing policies and being forced to buy more costly plans.
4. Can the Republicans take the Senate in the midterms? It’s not out of the question. To gain control, the Republicans need to gain six seats, which is a big swing. But the Democrats are defending seats in seven states that Mitt Romney carried in 2012: Alaska, Arkansas, Louisiana, Montana, North Carolina, South Dakota, and West Virginia. Early polls show the G.O.P. candidates leading or close in all of these states. Democrats will be hoping to hold at least a couple of them. Two of their best bets may be Louisiana and North Carolina, where the Democrats, Mary Landrieu and Kay Hagan, have plenty of money and strong organizations. In Georgia, Democrats also have hopes that Michelle Nunn, the daughter of former senator Sam Nunn, will take the seat being vacated by G.O.P. senator Saxby Chambliss. Throughout the country, much depends on whether the Republicans can put up mainstream candidates, or whether, as in 2012, they will be burdened with Tea Party extremists.
5. Will Hillary Clinton launch a second bid for the Presidency? Yes. In a recent interview with Barbara Walters, she said that she would decide in 2014. She has a lot of support in the Democratic Party; her poll ratings, although they have slipped back over the past twelve months, are still decent; and, since she is now sixty-six, this is probably her last chance to become the first female President. Not long ago, I spoke to somebody close to Hillary who said that the chances of her running were seventy-thirty. I reckon the real figure is about ninety-ten.
6. Will the Iranians agree on a permanent nuclear deal? Only Ayatollah Khamenei and his fellow mullahs know the answer. So far, they have supported President Rouhani’s outreach to the West, which resulted in an interim agreement that suspended nuclear enrichment in return for limited relief from sanctions. But talks on a broader agreement have already run into difficulties,and reaching a deal would necessarily involve the Iranians making a series of concessions that they have hitherto stoutly rejected. “It remains uncertain if Iran recognizes the extent to which it will have to roll back its infrastructure to reach a deal,” Robert Einhorn, a non-proliferation expert at the Brookings Institution, told the Wall Street Journal.
7. Will the civil war in Syria end? No. Now that both the Obama Administration and many of the Islamist rebels have effectively given up on the Free Syrian Army, the only victor in the war is likely to be Bashar al-Assad and his government forces. But the United States, along with Assad’s traditional enemies Turkey and Saudi Arabia, will be loath to accept this reality. Together, they’ll provide enough weapons and logistical support to keep a hodgepodge of anti-Assad forces in the field, while the international community tries to cobble together some sort of face-saving peace deal. The likely result: more bloodshed and more refugees.
8. Will John Kerry produce a peace agreement between Israel and the Palestinians?No. With its security policies working, and Palestinian terror attacks greatly reduced, the Israeli government of Benjamin Netanyahu sees no need to make the sort of compromises that a peace treaty would entail. Earlier this week, as Kerry arrived in Tel Aviv to try and revive the peace process, Ze’ev Elkin, Israel’s deputy foreign minister, said, “The Jordan Valley must be under Israeli sovereignty forever.” He added that “the 1967 borders are Auschwitz borders.” A great many Palestinians, meanwhile, see the 1967 borders as the basis for a negotiated solution.
9. Will the Chinese economic miracle continue? Yes. After thirty years of rapid growth, the Chinese economy is now threatening to overtake the U.S. economy as the world’s largest, according to some measures. But there’s still plenty of scope for so-called “catch-up growth.” In terms of G.D.P. per person, the United States is still about five times as rich as China. Even middle-income countries such as Latvia and Chile are twice as rich. But with the formerly Communist nation still spending close to fifty per cent of its G.D.P. on infrastructure projects, education, and other forms of investment, the gap is likely to keep closing for some time. That’s what happened in other fast-growing Asian economies that industrialized earlier, such as Japan and Korea, and there’s no reason to expect China will be different.
10. Will the bitcoin bubble burst? Perhaps. In recent months, the online currency has gone from a cult object to an economic phenomenon that governments and investors are starting to take seriously. Even Ben Bernanke said that such currencies “may hold long-term promise.” But that doesn’t mean that bitcoins are worth their current price in the market. Underlying all the hype and discussion is a bit of a contradiction. If bitcoins are the next-generation means of payment for global online commerce, which is what some of the currency’s techie boosters believe, we are going to need a lot more of them in circulation. But once there are lots more of them going around, their scarcity value will diminish, and so will their price.
11. Will the stock market crash? Over the long term, U.S. corporations are a much safer bet than bitcoins, but this year could be a tricky one for the market. It’s not just that prices have gone up a lot—in 2013, the Dow jumped thirty per cent. The bigger problem is that long-term interest rates are rising, which often portends trouble for stocks. Paradoxically, the biggest danger is from a strong economy. If G.D.P. growth accelerates dramatically, investors will start to worry about the Fed shifting back to normal faster than expected, and this could lead to a sell-off in stocks. Wall Street is hoping for the “Goldilocks” recovery to continue, with growth strong enough to boost corporate profits, but not strong enough to spook the Fed.
12. Will Brazil win the World Cup? No. With an experienced coach in Luiz Felipe Scolari,and gifted young stars like Neymar (Barcelona), Oscar (Chelsea), and Bernard (Shakhtar Donetsk), Brazil has the talent to match anybody. But in such a soccer-made nation, and with a relatively inexperienced team, the pressure of winning at home will prove too much.