The New Year and the Old Year

In which I take an honest look at my New Years predictions from last January.

“It’s hard to make predictions, especially about the future.”

So said the great Yogi Berra, and the events of the past twelve months have born him out. To begin with, there was the Coronavirus, which was unforeseeable, except in the statistical sense – that is to say, epidemiologists have always been saying things like: “there’s a one to two percent chance that a global flu-like pandemic will break out during the next year,” and over a long enough timescale, they’ll be right.

But non-virus related news can be even more strange and surprising. For example, I very much doubt that, even a few years ago, anyone would have foreseen a Russian state-owned news site running an opinion piece with the headline: “Don’t Dismiss US Coup.”

So if you go back and read the introductory section of my annual predictions piece from a year ago, it will probably leave you feeling wistful, as I talked long and loud about how, unlike most people in the media, I was going to make my predictions on the basis of steady trends, historical cycles, and the assumption that, on the whole, the upcoming year was unlikely to be any more exciting than any other year.

And because of that, I insisted, my readers could rest assured that my predictions would be more accurate than anything they got from rival websites, which tend to focus on dramatic events that make good clickbait but don’t get around to happening in the real world.

Well, I still think I was right in principle – steady trends, historical cycles, and the assumption that the upcoming year will be no more spectacular than the one before it usually produce better predictions than any other method. But as it turned out, 2020 was the wrong year to get into the prediction business using that approach.

So before making new forecasts for 2021, I should probably take a look at how my predictions for 2020 fared.

My election predictions were the worst of the set. I said that Joe Biden was going to win the Democratic primary, as indeed he did, but I also predicted that Biden would lose to Donald Trump in the general election, that the Republicans would hold the Senate, and that they would most likely take back the House as well.

Another Trump victory seemed like a sound bet when I made it, since it’s very rare for the White House to switch parties after just four years. In fact, it had happened only once in previous century, with Carter’s loss in 1980, amid circumstance that, so it seemed, had little in common with those facing Donald Trump in 2020.

To be fair, once summer came along, with the Covid Recession and the George Floyd Riots in full swing and Trump failing to show any apparent leadership, I admitted that I didn’t feel sure about his upcoming victory anymore. And when he refused to admit that he had lost in November and gave Democratic base a reason to come out in force in the Georgia elections, instead of resting on its laurels like a new President’s party usually does, I admitted that the Senate was up in the air as well.

Still, at the end of the day, my election forecasting record is one for four – I was right about the primary, and wrong about all three components of the general election. This is certainly not something that I would like to repeat.

Fortunately, my non-election predictions fared better. In short, I had said that, officially, the US economy would grow somewhat, but that the real economy would continue to contract while the authorities kept gimmicking the inflation statistics to hide what was happening. Vladimir Putin and Xi Jinping would still be the presidents of their respective countries at the year’s end, the United States would avoid going to war with Russia, China, or Iran, and Iran would avoid war with Israel.

The protests in Hong Kong would be de-escalated peacefully, while China’s much worse human rights abuses in Uyghuristan would continue to get little attention from the West. Also, nothing significant would come of the US-China trade war, and while the financial trends leading Eurasia to dedollarize would continue, they wouldn’t be felt quickly enough to threaten global dollar dominance during the year to come.

As it turned out, neither Covid-19, the George Floyd riots, nor the “Stop-the-Steal” lunacy got in the way of any of these things playing out the way that I said they would. And that includes, bizarrely enough, my prediction that official GDP would grow. Right now, the authorities are reporting a 33.4 percent gain in third quarter GDP that more than makes up for the 31.4 percent loss in the second quarter of 2020. Add in the 8.7 percent growth forecast by the Fed for Q4 (which exceeds the 5.0 percent loss in Q1) and you are looking at a positive net growth rate.

Obviously, these numbers don’t reflect the situation on the ground for ordinary Americans; the 100,000 or so small businesses that went under during the lockdowns are not, for the most part, popping right back up. Nevertheless, when the official figures are calculated, the collapse of real industry can easily end up being overshadowed by financialization, i.e. by an increase in the American upper classes’ supply of hallucinatory paper wealth.

Perhaps you have wondered why America’s Big Three automakers – Ford, GM, and Chrysler – are together worth $144 billion, while the combined market capitalizations of NIO, XPing, and Li Auto, a trio of Chinese electric car startups that have yet to make a dime in profits, stands at $171 billion? Or why Tesla is now valued at $809 billion, an amount of money it would take about 1,600 years to earn back at its current sales rate?

This is happening because, as I write this, the electric vehicle industry is going through a speculatory bubble that makes pets.com look like a sound investment. Eventually, the bubble will pop, as all bubbles do, but for now, this illusory growth – along with a great many other forms of illusory growth – counts for just as much in the official GDP numbers as any other economic activity.

When the people in power say that the economy is doing well – which they will be saying a lot more once Joe Biden is sworn in as President – you can rest assured that they are blowing smoke.

And this is a topic that leads nicely into my predictions for 2021. Fortunately, there are no elections during the upcoming year, so I can start with economics instead.

I expect that the official economy will keep growing in 2021, and that the real economy will keep contracting. Since phrases like “keep growing,” and “keep contracting,” are by themselves rather vague, I’ll say up front that you can call me wrong if the official GDP (as displayed here) is less than $22 trillion at the year’s end (it’s currently $21.3 trillion), or if the real value of a dollar (as calculated by my own method, described here) doesn’t fall by at least eleven percent during 2021.

I suspect that the Democrats in Congress will spend liberally once Joe Biden is sworn in, both because that’s their usual response to crisis, and also because having their man in the White House means that they get to take credit for any short-term economic gains this causes. The spending will probably start with ≥$2,000 payments to each citizen, plus fatter unemployment checks, but as usual most of the money will end up going to special interests. Expect the national debt to have exceeded $31.5 trillion by the last day of December, and the debt-to-GDP ratio to have risen to at least 140 percent.

As for other legislation, I expect that the House of Representatives will pass the DC statehood bill again (and perhaps also a bill for Puerto Rico) but I don’t think that either will get through the Senate, because the Democrats’ majority there is just too thin. After all, they talked about admitting new states in 2009, when they had 60 seats, and didn’t get around to doing it, so I don’t expect them to do it now. For the same reason, I’m confident that they won’t add seats to the Supreme Court.

After Biden’s inauguration, I expect a rapid diedown of the Democratic party’s enthusiasm for maximal Covid lockdowns. The explanation here is as cynical as it is obvious: once Democrats stand to benefit from a return to prosperity and normalcy, they will become the party of prosperity and normalcy.

Big Tech is going to crack down hard in the wake of Donald Trump’s riot/quarter-assed coup attempt last Wednesday. Expect way more deplatformings in 2021 than in 2020. And it won’t stop with just the QAnon people – anyone associated with any form of conservatism or Trumpistry is at risk of losing access to social media, web hosting, other online services, publishers, banks, etc. Meanwhile, right-wingers will keep on losing their jobs and professional standing for criticizing the BLM and LGBT movements.

Whether the upcoming year will feature as many riots as the last one is a tricky question. Before 6 January – that is, when riots in America were exclusively the purview of the Left – I expected the leftist troublemakers to get a lot calmer when their own guy was in the White House and they no longer had a bright orange hate object on which to focus their rage. But now that both sides are in on the rioting business, we may well end up with back-and-forth street violence and low-level thuggery all year long.

One thing should be clear, though: none of the insurrectionary rhetoric will lead to the fall of the government, or to a widespread breakdown of civil order. You may be thinking: “What about the breakdown of civil order that we’ve been having since last May?” But that, as I explained in this post back in August, was special anarchy, not general anarchy.

General anarchy means that chaos reigns because the laws, in general, aren’t being enforced. Special anarchy, on the other hand, means that specific people, with the support of elements within the government, can commit specific crimes against specific other people without facing the usual consequences.

The George Floyd riots were a case of special anarchy: perhaps you heard about the man who got 100 hours of community service for toppling a Christopher Columbus statue, even as most other statue topplers were never apprehended at all? Well, that sort of thing doesn’t happen unless there are powerful elements within the government that approve of statue toppling.

I suppose that a lot of people might disagree with my assertion that violence on the part of undisciplined street thugs, from either the Left or the Right, poses no real threat to the government. Perhaps they will point to Weimar Germany as a counterexample – after all, years of insufficiently-punished thuggery and street violence by the Nazi Party’s paramilitary arm, the SA, did indeed end with the establishment of a Nazi dictatorship. And this happened even though the typical SA Mann was an undisciplined thug when compared with the regular German Army.

But the comparison with our day still doesn’t hold. Next to BLM and the Stop-the-Steal people, the SA is the frickin’ Delta Force. None of the actors in America's current brouhaha have the wherewithal to pose a serious threat to the powers that be, and that isn’t going to change anytime soon.

As for the role of the Coronavirus in the coming year’s events, I honestly don’t have all that much to say. I’m not going to try to predict its future growth/dissipation in any detail; the only thing I’m fairly certain about is that by the end of the year it will have mostly faded away, either through successful vaccination, or else through the natural process of evolution into a less deadly form.

I have no idea how well any of the new vaccines will work. The fact that Covid-19 mutates rapidly, and that other members of the coronavirus family have proven resistant to vaccination in the past, certainly doesn’t bode well, and I have often criticized the belief, rooted in what many thinkers call the Myth of Progress, that every problem must have a technological solution if only somebody, somewhere tries hard enough to find it.

At the same time, I am not a Luddite, and I have nothing against innovation so long as it’s done by clear-headed people who are aware of their limits and recognize that success isn’t inevitable. I don’t believe that the Covid vaccines, or vaccines in general, are part of a conspiracy to harm people, and I will probably get vaccinated myself later this spring.

My foreign policy predictions are largely identical to what they were last year. The United States will not go to war with Russia, China, or Iran, and Iran will not go to war with Israel. At the end of 2021, Vladimir Putin will still be the President of Russia, and Xi Jinping will still be the President of China. Unless he dies of old age, the Ayatollah will still be in power in Iran, and the same goes for Joe Biden in the United States.

 Come December 31, the dollar will still be the global currency, and the American armed forces will still be occupying somewhere near half of the world. But both the economic and military power of the United States will be a bit more eroded than at the beginning of the year.

I realize that my predictions look too bleak for most Americans to take them seriously. But bleak doesn’t mean wrong. For example, to a patriotic citizen of the USSR living in 1975, an accurate description of what was going to happen to his country over the next two decades would have looked bleak, too.

The bright side of a future dominated by historical cycles – including the cycle of the decline and fall of empires – is that historical cycles don’t end in apocalypse. While the American Empire does not have a chance at a better future, the American people do.

I expect many great civilizations to rise and fall on this continent while the human race still walks the earth, and if we give up the delusion that ours is destined to last forever – or that its institutions will always stand for liberty and justice – then we just might find that we have what it takes to keep ourselves and our families alive and in good spirits during the troublesome times ahead.