10 Developments That May Surprise You in 2012
As the new year unfolds, unexpected twists and turns -- in politics, business and the economy -- are inevitable.
As the new year unfolds, unexpected twists and turns -- in politics, business and the economy -- are inevitable. Here are some we think are good bets.
1) The world's fastest-growing economy next year may well be lraq's, as that nation cranks up its oil production machinery and begins massive rebuilding after eight years of war. The country is poised to see its GDP grow by more than 12%. It may expand even faster if Baghdad can keep sectarian strife to a minimum.
By comparison, China's economic growth will slow to under 9%, while Taiwan, at 5%, and South Korea, at a projected 4.4 % pace, will lead the industrialized economies. As for the U.S. economy, look for it to expand at a 2.3% clip, a tad stronger than earlier expectations.
2) U.S. multinationals will return. More manufacturers and service businesses will expand their operations at home rather than abroad. And they'll buy more of their parts and materials domestically. Companies such as Boeing, Advanced Micro and Dow are finding that they can cut costs by shortening the supply chain. And many are heeding how the earthquake in Japan and floods in Thailand stymied U.S. production of cars and computers.
3) Forget gold. America's sexiest commodity is coal. Although tough new rules for coal-burning power plants and fierce competition from inexpensive natural gas will trim U.S. coal usage next year, overseas markets can't get enough of it. U.S. exports of the black stuff will again hit 100 million short tons as demand from Asian power plants and steel mills requires ever more thermal and coking coal.
4) Women will make up the majority of the U.S. workforce for the first time. Although much of the growth is due to the creation of many low-paying jobs, women are also making big gains in many typically male lines of work. They already hold 52% of managerial and professional jobs (compared with 26% in 1980), plus they make up 60% of all accountants, 32% of physicians and more than 31% of lawyers. The wage gap is shrinking, too; working women now earn 77% of what men earn for comparable jobs, vs. 60% in 1980.
5) President Obama will serve four more years, despite the tepid economy. Barring a big downturn, the president will benefit from an upward trend in job creation and the economy. Moreover, he'Il gain votes if the GOP continues to struggle finding messages that resonate.
An Obama win will complicate GOP designs on the Senate. Republicans need to pick up four Democratic seats and retain all 10 of their seats on next year's ballot to gain the majority. That's no slam dunk. In fact, a 50-50 Senate, with Vice President Joe Biden breaking ties, is a fair shot. That will happen if Republicans gain just three seats and Obama wins again.
6) Unusual allies may help Obama win the Supreme Court health law case. Chief Justice John Roberts and Justice Antonin Scalia, both conservatives, have nevertheless taken expansive views of congressional authority over states in other cases. Some conservative judges at the appellate level have already backed the heart of the law, which requires people to have health insurance or pay a penalty. A ruling is expected in June, following three days of hearings in late March.
7) The "temporary" payroll tax reduction for workers is here to stay. It'll remain on the books until Congress overhauls the tax code -- not before 2013, and maybe later. Democrats will try to force a vote early in 2012 to make the trim permanent. It's an election year gambit to pressure congressional Republicans who rebuffed Democrats' attempts to set higher tax rates for millionaire earners. If that effort falls short, both sides will agree to year-by-year extensions.
8) Big Brother will be welcomed back by Congress -- to fight cyberterrorism. Both Democrats and Republicans will support the most sweeping security measure since the Patriot Act, requiring private firms to share information with Uncle Sam. Though details are unresolved, the measure will give civil libertarians heartburn and will likely result in new safeguards to protect the privacy of law-abiding Americans.
9) The world will get serious about Iran -- and its fixation on nuclear weapons. But conventional military action isn't in the cards for now, though the U.S. has sent at least 55 bunker-buster bombs to Israel in recent years. Instead, look for more cyberattacks and aerial surveillance. The goal: Disrupt the fundamentalist regime and undercut its push for the capability to manufacture nuclear bombs. Stepped-up pressure from the West won't sit well with pro-Iran China, but Beijing is already busy keeping a lid on another nuclear outcast: North Korea.
10) Bills for the Iraq war will mount, even though the fighting is over. Postwar charges may top $1 trillion -- the same amount that the hostilities cost the U.S. Billions will be spent to build infrastructure and support Iraq's fragile government, and military operational costs will stay high in 2012 as equipment is removed from lraq.
But the biggest -- and longest-lasting -- cost will be for the treatment of seriously wounded soldiers. Already half a million veterans of the Iraq and Afghanistan wars have received government benefits for injuries. But some, with certain types of injuries -- brain damage, paralysis and severely impaired vision, for instance -- will require ongoing treatment and care for 30 to 40 years.