20081228 2008 Wrap Up

Let me tell you, Dear Reader, those self absorbed looks back at the year gone by really annoy me worse than Pee Wee Herman trying to help while I’m replacing a windshield wiper on the van. Well, it’s the end of the year and time to look back at whether this blog has been on the money or not in my bold predictions.

Straightforwardly stating what is going to happen in the future is a dangerous business. In the May 2000 issue of Digital Time editor Joshua Quittner proclaimed that the technology boom “continues without end”. Sadly, the economy had begun contracting two months earlier. And, when was the last time you saw a copy of Digital Time on the Newsstand.

Back in 2007, this blog predicted that gasoline would hit four dollars a gallon as oil neared two hundred dollars a barrel, but when the economy tanked, the speculators would bail, oil would drop to forty-five dollars a barrel and the price at the pump would follow. I was told that I was being too extreme. As it turns out, I was too conservative. Gasoline went to well over four dollars a gallon here in New York. Now, as the country is deep in recession, oil is down to thirty-eight dollars a barrel.

When the economy was booming and the stock market was hitting new highs, this blog said that a recession was coming. While I was not carrying a sign saying that the end was near, real estate was overinflated and a tremendous amount of debt was leveraged on these superheated values. What was surprising was the number of people who wrote in saying that major recessions were a thing of the past and we could never experience another one. I’m sure those people never lost sleep until the day they lost everything.

One thing that I was wrong about was the breadth and depth of the recession. When I saw it coming, I thought I was smart because I cashed out some money and moved it overseas in Brazil, Russia, India and China. I did not see that a collapsing world commodities market would hit the Brazilian stock market so hard. I did not expect Russia’s president to go crazy and cause the world to back out of Russian stocks and create a severe Russian recession. I did not count on fear of terrorism to effect India so much. I really did not expect the Chinese to go into the huge financial spiral that it did for another five to ten years. For all of our hand wringing, the financial market in America has held up better than most of the world.

On April twentieth, Notes from the Red Lodge predicted that the big push toward ethanol would lead to higher food prices, wide spread inflation and third world starvation. Sadly, this has happened. Now that oil has dropped, this year’s harvest has already been lost and food prices have stayed up. It is nearly impossible to buy gasoline that is not labeled ten percent ethanol so we continue to destroy the environment.

After examining president elect Obama’s energy policy, the blog predicted that Democratic congressional leaders Harry Reid and Nancy Pelosi would begin implementing it before 2009 was over. The core of the plan is not to encourage new energy sources but to punish the use of gasoline by artificially keeping the price at the gas pump above six dollars a gallon. Now, before 2009 has even started, legislation is being prepared to double the federal tax on gasoline.

Now, what do I want for the year ahead? I hope that next year I can say that I was wrong on the policies implemented in Washington pulled us out of the recession. I also hope that Harry Reid, Nancy Pelosi, Barney Frank and Christopher Dodd and share a podium so they can announce that they are frauds and will be stepping down and retiring from public life.