A year ago I made several predictions many of which turned out to be wrong. I guess I’m not Nostradamus – meaning that I am not capable of writing symbolic passages that can be interpreted to mean just about anything. That’s fine with me. As a professional business writer clarity keeps the paychecks coming.
There is no way for us to predict the future. As physicist Niels Bohr noted, “Prediction is very difficult, especially about the future.” Although quantum physics seems quite comfortable with bidirectional time, we in the classical realm are stuck on a one way path from the order of the past to chaos of the future. We are therefore left to guess. That creates its own problem, as I noted in this post from 2005: “The Past is real and to a great degree concrete. We lived it and know it – well, at least our faulty perception convinces us that we do. The Future, on the other hand, is as ethereal as a cloud.”
But in that same post I predicted the bursting of the housing bubble, a full two years before the MSM did. Doesn’t that negate the previous paragraph? Nope. Throw a ball into the air then predict whether it will keep traveling up or fall back to earth. After you’ve thrown it you can accurately predict that it will fall back to earth because you know it obeys the law of gravity. My prediction on the housing bubble was along those lines; in a free economy prices will not continue rising forever: they will be brought back to earth by the law of supply and demand. Economic laws are not natural laws, but in a free market they can approximate natural ones. That’s why I can say today that the housing recession will not last forever, that eventually the subprime mess will be worked out and housing values will stabilize.
Will it happen in 2008? I hope it so, but I doubt it. Bubbles are created from irrational exuberance and usually end with irrational pessimism. When people begin to talk about real estate with the same bitterness used to discuss buying Global Crossing or other internet stocks in 2001, then you’ll know it’s time to buy. But that hasn’t happened yet – so the bubble will continue to deflate.
We’re already in a recession, and I suspect that in 2008 the MSM and politicians will recognize this fact. What this means for the election is unclear. I firmly believe that interest in global warming won’t outlast a recession; when it comes between jobs today and the climate of 2100, I have no doubt that present issues trump future ones. Taxes are also a tough sell during a recession.
The election of 2008 is the big question. From the standpoint of the final days of 2007 the candidates appear to be Hillary Clinton and Rudy Giuliani, with the outcome being the election of the first woman president in American history. However the election isn’t held today, and 10 months is an eternity in a federal election cycle. Anything can happen, and as the death of Benazir Bhutto proves, everything can change in an instant.
A terror attack in the USA would make a Republican victory likely in November. Skyrocketing violence in Iraq could hand the election to the Democrats. A sour economy could make the election go either way, since neither party has strong roots in the middle class (Big Business has shifted its allegiance to the Democratic party leaving an opportunity for the Republican Party to pick them up once it realizes that it has lost Wall Street).
Famous people will die (fingers crossed on Castro). others will hang on (Carter), and even more will deserve death (Chavez, Ahmadinejad).