Jan 02 2015

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Looking Back on 2014….

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Unsettled and Unsettling...

Unsettled and Unsettling…

A fresh start doesn’t come with a clean slate, so as we look to the future in a new year, we must first consider the unfinished business from 2014 – and much business there is.

In November and December, the President all but ignored the verdict of the midterm elections to take unprecedented (and ultimately illegal) executive action on illegal immigration and climate change that completely bypassed Congress. There will be a reckoning.

2014 saw the rise of a revanchist and nationalistic Russia that seized the Crimea peninsula from Ukraine, and then spent the remainder of the year actively undermining Ukrainian rule in its eastern, Russian speaking provinces.  As if more evidence was needed that the party is over in Europe, at the end of the year, a Russian security policy document named NATO as Russia’s chief enemy. After nearly a quarter century, the West is again facing a political threat in Europe.

In 2014 short-sighted Obama administration policies on Syria and  Iraq came home to roost. Administration vacillation and indecision on Syria marginalized the US as an influential player – to balance off strong geo-political influence from  Russia and Iran – while outright civil war killed hundreds of thousands of Syrians, creating a humanitarian crisis in the region. The radicalization of Sunnis in Syria led directly to growth of ISIS, a new and complex terrorist threat. .

 In Iraq, the President’s singular determination to disengage and wash America’s hands of Iraq at all costs created a power vacuum, exacerbated by the stubborn Iraqi sectarian divide, that provided easy pickings as ISIS moved from Syria into the Iraq, seizing up to 1/3rd of the country’s land in predominantly Sunni areas. Three years after US combat forces prematurely left the country, the American military is again back in Iraq, in inadequate numbers and in a far less favorable situation. Obama policy responses have been thoroughly inadequate

In 2014, negotiations with Iran over its nuclear program hit a predictable deadlock  – twice.  The “success”  was in an agreement to extend the fruitless talks for an additional six months; an extension that simply provides Iran the time it needs to complete an operational nuclear weapon and a dependable delivery system. The US seems to have no workable Plan B.

In 2014, a nationalistic and newly confident Chinese military decided to throw its weight around, challenging territorial claims by the Japanese in Northeast Asia and ASEAN nations in Southeast Asia. Western conceit that China’s rise could be managed by the multilateral economic and political institutions of the region is collapsing as an organizing principle. China will decide what China wants, and an overlap of security and political issues with the US is unavoidable.

Domestically, in 2014, the nation’s faith in government hit an all-time low.

Un-elected but powerful bureaucrats had starring roles in jaw-dropping examples of public institution incompetence. Lois Lerner’s arrogance became the face of the IRS and deeply compromised the public image of a non-partisan bureaucracy.  Jonathan Gruber – the well paid consultant to the Obama administration on health care issues – committed an unpardonable act of candor, telling anyone who would listen about the lies and distortions that were designed behind the scenes, to structure and sell Obamacare to the “stupid” American people. Tom Frieden, the head of the CDC took to the airwaves to explain how the only way to prevent the spread of Ebola into the US was to allow continued access to the country from those nations most infected.

2014 saw racial tensions explode after grand jury determinations in Ferguson and Staten Island. The unchecked venom of the more militant race baiters and activists led directly to the murder of two NYPD cops in apparent retaliation. Nationwide, relations between the police and minority communities remains tense.

But it wasn’t all bad news.

The Republicans crushed the Democrats in the midterm elections, expanding their majority in the House to the largest caucus since the 1920s, and picking up 9 Senate seats and control of the chamber, after 8 years of Harry Reid. Less talked about, but more important, was the GOP sweep in state elections, with Republicans holding more elective seats nationwide than at any time since the 1920s. The GOP now controls 31 governorships, holding states such as Florida, Ohio, Michigan and Wisconsin, but expanding to true blue states of Illinois, Maryland and Massachusetts.

The repudiation of the President and Democrats was thorough and complete; obvious to anyone, except apparently to the President himself.

There was also good economic news. Revised GDP numbers from the Bureau of Economic Analysis show that the US economy grew at a healthy five percent in the third quarter, which complements a respectable 4.6 percent growth in the second quarter.  Yet, spontaneous claims that “happy days are here again” are premature to say the least.

Cheap gas, the result of collapsing oil prices is great news for consumers, but also a sign of over-supply. The global economy has tepid growth at best. Japan is officially in recession, China will cut its growth forecast, and political developments in Greece threaten to unravel to relative quiet in the European sovereign debt crisis.

It’s true, on paper, things look better. But lower official unemployment is distorted by the 92 million Americans not in the work force. The sky-high stock market has more to do with the Fed and zero money interest rates than as a barometer of Main Street’s health. If you are rich, you’ve gotten a good bit richer. If your are not wealthy, life has been a six-year struggle to make ends meet, mostly a losing battle.

There are no doubt kernels of genuine economic activity, but these are occurring despite, not because of, the President’s policies, no matter how much Paul  Krugman says otherwise.

In sum, it was an unsettled year in an increasingly unsettled world.   But 2014 planted the seeds for change this year.

What to look for comes up next.






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