Five Areas to Watch in 2012
One of the virtues of a new year is that it tends to get us to think comprehensively, if only for a spell. Reviewing the year that passed in its totality puts developments into a broader context, getting us away from the atomized mindset that is often an accidental byproduct of the 24-hour news cycle, where we know everything that happened yesterday and remember nothing from last week.
That same mindset can also have virtues when applied to the future. With that in mind, here are five areas to watch for some of the biggest developments of 2012 (note that this is speculation on what may happen, not a statement of preferences).
1. The November Elections – The coming weeks (and perhaps months) will at long last resolve the question of the Republican Party’s posture heading into the 2012 elections. With Mitt Romney having narrowly won Iowa and looking poised for victory in New Hampshire, the determinative race will likely be in South Carolina. If Romney wins there, he will have pulled off a triple crown unprecedented in the modern primary era and will drain whatever momentum remains from his more conservative challengers. Should he flag in the Palmetto State, however, the race will likely drag on into at least the early days of spring.
Even that setback, however, isn’t likely to become fatal. Four candidates to Romney’s right (Bachmann, Perry, Cain, and Gingrich) have held the mantle of the “conservative alternative” for a season, only to wither under the enhanced scrutiny. Rick Santorum seems to be beginning the same cycle now. None of them seems likely to be sufficiently rehabilitated to challenge and beat Romney head-to-head over the long haul.
The major development to watch after a Romney nomination will be how the Tea Party movement and other limited-government advocates who’ve had Romney dyspepsia from the start accommodate themselves to this disagreeable reality. Do they subordinate their concerns to the larger goal of defeating Barack Obama or remain recalcitrant, fearing that the animating principles of their movement are at stake? Also a key factor: how Romney responds to a general election onslaught of negative campaigning, likely centered around a criticism of his time at Bain Capital, which is already being previewed by the attacks from his primary rivals.
Romney looks likely to take the nomination and I would make a very large wager that he will choose Florida Senator Marco Rubio – who brings conservative bona fides, appeal in one of the nation’s largest swing states, and the chance to attract Hispanic voters – as his running mate. I expect this race to be closely fought, on par with 2004, 2000, and 1992. And while the odds look good for Republicans to hold the House and pick up the Senate, a narrow Romney loss would not surprise me, particularly if Obama has the perfect storm of improving economic conditions, an effective negative onslaught against Romney, and a John Kerry-esque inability by Romney to connect with voters. If Obama does win reelection under these circumstances, conservatives will console themselves with their ability to restrain Obama from the legislative branch and the prospect of Rubio’s 2016 candidacy.
2. A Third Party Challenger – With public confidence in the federal government at historic lows, a record number of Americans identifying as independents, and the prospect of an Obama-Romney contest representing the apotheosis of business as usual, the 2012 race provides a tremendous opportunity for an electorally significant third-party presidential candidacy. Who fills the vacuum remains to be seen, but – in an ominous trend for Romney – most of the leading prospects come from the right of center.
Former New Mexico Governor Gary Johnson, a Republican candidate until a few weeks ago, is pursuing the Libertarian Party’s nomination. Johnson is far from the most compelling anti-establishment candidate and unlikely to be a national factor, but his presence on the ballot could siphon off Republican votes in his (competitive) home state, giving Obama 5 votes in the Electoral College that could be crucial in a close race.
Far more significant would be a third-party run by Texas Congressman Ron Paul, which would come with a built-in national constituency. Paul’s candidacy could become the protest vote of choice for limited-government types unwilling to cross the bridge for Romney. A point that hasn’t been sufficiently explored yet, though, is that Paul may also peel off votes from Obama’s detractors on the hard left, particularly the young liberals animating the Occupy movement, which could blunt his strategic impact on the race.
Also worth watching are the developments surrounding Americans Elect, the latest bipartisan group seeking a national centrist ticket. AE is well-funded and is placing a premium on organization. Thus, unlike many of its high-minded but philosophically murky forbears, Americans Elect may actually have a chance to have an impact with the right candidate. You can ignore the speculation about Donald Trump, whose presidential rumblings always nicely coincide with having a product to promote. If Jon Huntsman fails to get traction in the Republican field, however (as is overwhelmingly likely), he may find a natural home with this group, which shares his emphasis on civility and comity.
3. The Supreme Court’s Obamacare Ruling – Barring a major foreign policy crisis (something I wouldn’t recommend betting against in 2012), the high-stakes election means this is going to be a year more about setting the table for the future than altering the present. Congress and the White House are going to be more concerned about ginning up votes than enacting new laws (one of the few virtues of an election year). That means the real action is going to come from the Supreme Court, particularly with a ruling on Obamacare coming down this year.
The significance of this ruling can’t be overstated. If the Obama Administration prevails, it will represent a historic victory for the progressive movement, with Obamacare joining the New Deal and the Great Society as liberal watersheds that ineluctably altered the relationship between a free citizenry and its government. If conservatives win out, however, it will be equally noteworthy. It would be a near-unprecedented judicial rebuke of welfare state activism and would energize the right in a fashion far beyond what any one candidate is capable of.
One word of warning, however: this is a fight that could go well into 2013. If Obamacare is upheld by the Supreme Court and a Republican president is elected with significant legislative majorities in November, the pressure from the right to make full repeal his first legislative effort will be overwhelming. Failing to do so would alienate the conservative base from the new president, perhaps permanently. Taking the initiative, however, would poison the well with congressional Democrats from the start. This scenario would set the next president up to be a polarizing figure from day one.
4. Foreign Policy – Whether he wins or loses in November, Barack Obama is going to have a lot more gray in his hair come Christmas. The number of predictably volatile scenarios on the international horizon is daunting, and that’s without factoring in the surprises out of left field (for example, no one in the White House spent the end of 2010 girding their loins for the Arab Spring to come).
Europe’s economic future – and indeed the very existence of the Eurozone – is up in the air. The implications for global economic stability would be dire in any year, but are doubly so for a president in desperate search of green shoots as he prepares to campaign for reelection.
As we move into the second year of the Arab Spring, we’ll gain greater insight into whether democracy and liberalism are correlates or antagonists in the Middle East. The answer seems increasingly likely to be the latter, which means a huge increase in potential safe havens for radical Islam throughout the region.
Other hot spots abound. It’s becoming increasingly clear that the stability of Iraq is going to implode far quicker than even many of the critics of American withdrawal anticipated, which creates a bigger opening for an Iran eager to stick its finger in America’s eye at every turn. Syria will play out to conclusion the experiment that Libya was conducting until the West intervened last year: whether sustained and uncompromising brutality can drain the vitality of a widespread dissident movement. And North Korea will be the world’s great question mark, as the callow and untested Kim Jong-un takes (at least nominally) the reins of power from his deceased father.
Don’t underestimate the potential of foreign policy to shape the presidential race. In 2008, the race began with a focus on international affairs that decreased as Iraq became pacified and nearly vanished with the inception of the financial crisis. It’s possible that the reverse could happen this time, which would put Barack Obama on unfamiliar ground. Despite the fact that America has been fighting two wars during the majority of his presidency, Obama has only voluntarily focused on the wider world when shepherding ill-advised diplomatic initiatives (such as the Russian “reset”) or touting unambiguous victories (such as the death of Osama Bin Laden). Having the president respond to a crisis in real-time (particularly one concerning Iran) during election season has the potential to dramatically alter the viability of his candidacy for either good or ill.
5. The Economy – This comes last only because its prominence is so predictable. There’s no doubt that it’s going to be one of the dominant issues of 2012 and that Obama will be facing strong headwinds, particularly since whatever growth materializes in 2012 is likely to be too anemic to make a significant dent in the broader economic picture.
While the status quo is bad enough, Obama has some very dismal developments on the horizon. In addition to the aforementioned specter of the European financial contagion spreading to the U.S., there’s also a much more basic problem awaiting the president: a sustained improvement in the labor market may actually have the effect of increasing top line unemployment numbers, as more individuals resume the search for jobs and are added to labor force participation statistics. The impact of that scenario hinges on whether you think Americans' views on the economy are shaped more strongly by media coverage or anecdotal evidence from their own lives.
Conservatives should also keep an eye on the housing sector. As AEI’s invaluable James Pethokoukis reported last week, there’s well-founded talk that President Obama may use a recess appointment to appoint a new FHFA head charged with implementing a massive refinancing program that would act as a de facto stimulus program of over $100 billion per year. That has to be a tantalizing prospect for an incumbent who knows that he’s only likely to be reelected on the margins. In fact, Obama’s calculation may be that he’s willing to risk a long-term constitutional showdown here (another trend to watch in 2012) – as with his appointments to the Consumer Financial Protection Bureau and the National Labor Relations Board last week -- in order to create a short-term boon for his reelection prospects.
These are just a few predictions of what will be significant in 2012. What makes your list?
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Comments :
Jul '11
Re: Five Areas to Watch in 2012
The Fast and Furious scandal has my attention more than any item. The GOP candidates have barely mentioned this travesty and yet without being tainted by criminal behavior this election will be an Obama win. Relatively an easy one I expect.
Jun '10
Re: Five Areas to Watch in 2012
If Europe's economic problems don't drag us down first, I assume there will be a slow steady recovery here. Businesses have gotten lean and mean over the last couple years, and that's generally a good starting point for growth. To accommodate any growth, they'll need to hire.
Jun '10
Re: Five Areas to Watch in 2012
The whole green jobs things, if played right, could be a big story, and a big positive issue for conservatives.
Troy: I've not thought the issue all the way through, but I have a visceral belief that if the Supreme Court upholds Obamacare (which would be wrong, in my view) it may actually be beneficial to the Republicans in November. They can really leverage its unpopularity and target incumbent Democrats who voted for it. Thoughts anyone?
Dec '10
Re: Five Areas to Watch in 2012
On the first issue you wrote, "If Obama does win reelection under these circumstances, conservatives will console themselves with their ability to restrain Obama from the legislative branch and the prospect of Rubio’s 2016 candidacy."
I think this potentially a false hope. Looking at F&F, Solyndra, Libya, that other African thing, and now the non-recess appointments fiasco I see very little hope of restraining Obama. If he is this loose with his fidelity to the Constitution and the rule of law now, just imagine what he'll be like without the worry of reelection anchoring him to reality. When the congress really becomes stubborn what other parts of the executive will he mobilize to enact his will?
May '10
Re: Five Areas to Watch in 2012
U.S. vs. Arizona decision by SCOTUS.
Jul '11
Re: Five Areas to Watch in 2012
Tabula rasa, it will benefit the GOP election chances if obamacare is upheld. Somehow I expect it will be upheld also.
KP and Ottoman point out many unilateral actions from a man who despises the aspects of America I hold dear. I expect Obama will worsen but that is for 2013, heck maybe we could even get an impeachment in the future based on his hubris and idealism.
2012 will see a more moderate Obama in speech although actions will dictate otherwise and go largely unquestioned. Money will flow in to the stock market, artificially propping it up most of this year. Oil prices will drop at some point to more reasonable levels(as opposed to the summer 2008 pre election increases). This is all rigged but the question to ask is by what entities.
Sep '10
Re: Five Areas to Watch in 2012
I'd suggest that the dominant story of 2012 will be Europe. Italy's largest bank, Unicredit, is having hard times right now. It's going to have a lot of company as bank holdings of sovereign bonds go south.
Dec '10
Re: Five Areas to Watch in 2012
Joe Biden = impeachment insurance. I could be talked into a twofer.
The usual suspects.
Re: Five Areas to Watch in 2012
Hugely useful. Thanks, Troy. I'm thumbtacking that round-up to my bulletin board.
Apr '11
Re: Five Areas to Watch in 2012
I'd add China to the list of things to be concerned about. If there is a serious European collapse, a collapse (to merely good growth, rather than excellent growth) seems likely in China. The party is papering over too many problems with money for less than excellent growth to keep things together, so even a mild problem could easily become a catastrophe, which would have further knock-on effects on the rest of the world economically, and throw every neighbor into a state of terror.
Nov '11
Re: Five Areas to Watch in 2012
Agreed. Environmentalism is a control vehicle on par with socialized medicine and people know it now, more than ever.