Hope as we move toward the New Year

It would not take much for 2015 to be a better year than 2014.  2014 was marked by a major outbreak of Ebola, war between Russia and Ukraine, renewed active war in Gaza, civil war in South Sudan, the rise of the remarkably brutal Islamic State, surprising new strength for radical right-wing parties in the European parliament, rising authoritarianism in Turkey and Hungary and a military coup in Thailand, frightening large-scale terror attacks in Nigeria and Pakistan, and even the mysterious disappearance of not one but two civilian airliners over south Asia — all against a backdrop of rising economic inequality in both rich and poor nations and economic stagnation for much of Europe, Japan, and the U.S.

Fortunately, there are signs on the horizon of positive trends, just beginning in late 2014, that may carry over into 2015 and indeed make it a better year.

First, the U.S. economy looks to finally be regaining true strength.  For the first few years of recovery, up through 2013, the U.S. saw weak growth (generally 2%), no gains in wages, and reductions in the unemployment rate coming mainly from withdrawals from the workforce.  But in the second half of 2014, we saw real gains in jobs, some increases in wages, and much stronger growth (probably 4% for the 3rd and 4th quarter, although a lot of that increase was in health care spending, so we will have to see if that is sustained, which would NOT be ideal).

Second, the world economy will continue to gain from low oil prices.  The explosive gains in US production of oil and gas from shale finally shattered the high price plateau for fossil fuels, and there is no reason to think high prices will suddenly return.  This will cause pain to Russia, Iran, Nigeria,Venezuela, and other regimes that have relied on oil revenues to float their governments; but for most countries and peoples it is an economic gift.

Third, the global middle class continues to grow, and with it, demands for accountable and more effective government.  In the short run, this can appear disruptive, with protests in places as diverse as Taiwan and Hong Kong, Ukraine, Bosnia, Turkey, Thailand, Brazil, Venezuela; but in the long run these peaceful protests should bring about more open and responsive governance.

Finally, technology continues to run wild.  I don’t mean the sky-high valuations of such speculative disrupters as Uber, Snapchat, Instagram, AirBnB, and others, or the growth of Facebook and Twitter as necessary tools of communication in daily life.  I mean the continued progress of stem-cell research, 3-D printing, solar and wind energy, battery storage, robotics, and other technologies that so far have not contributed significantly to GDP or quality of life, but may be just on the verge of doing so.  Perhaps in 2015 we will see some energy, or life-saving medical, or manufacturing breakthrough (I do NOT mean curved TVs) that will transform our lives.

It is also possible we will see some global political good news too.  India and Brazil, two potential powerhouses for the world economy, completed elections that should lead to reforms that will support renewed growth.  Iran and the U.S. may complete negotiations that will limit Iran’s nuclear capabilities and restore its relations with the world.  China appears determined to root out corruption at home but also to improve relations with its neighbors.  And Tunisia continues to make progress toward consolidating its democracy, showing that the Arab Revolts of 2011, for all their tragedies, were not a total loss.

Maybe we will even solve those airline mysteries!

Here in the U.S. we hope that the recent wave of protests regarding racially-biased police excesses will bring better training, transparency, and oversight of policing, and that these protests, as so often in America, will herald an improvement in our democracy.  The alternative to grid-lock in Washington looks increasingly like better and more responsive local government, and that is what these protests should bring.

So let’s hope for a better year next year.  Doomsayers (of which I am sometimes one) will worry about a stock market crash, an eruption of greater war in Ukraine, a disruptive collapse of authority in Russia or Nigeria, and an expansion of IS or other wars in the Middle East.  So 2015 could be even worse than 2014.  But let us hope for all of our sakes that the positive outweighs the negative in the coming year.  The world deserves a break!

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About jackgoldstone

Hazel Professor of Public Policy at George Mason University
This entry was posted in The Global Economy, The Middle East Revolts, U.S. Politics and tagged . Bookmark the permalink.

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