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Count Our Blessings

The blessing theme was marred late in 2015 by the horrific attacks in Paris and San Bernardino and the ensuing aftermath of revulsion, blame and resistance to accepting immigrants in dire need of support, food and shelter. One of the most unsettling things about the growing antipathy toward migrating people is the massive number of young children who have nowhere else to go. It is difficult to hold them accountable for atrocities they can barely comprehend, even if witnessed firsthand. There is no easy answer and no glib response will suffice. It just seems to be another testament to a global cauldron fueled by sectarian animosity, religious entitlement, historic grudges and a clash between civilized, future-looking populations and those with little to embrace. Even vestiges of their cultural heritage are being erased by forces immune to reason, trust and good will. This too will pass, but at what price and over what period of time? Difficult to say at this point, but the plot always turns, even if too slowly for so many who need immediate assistance. Sending dispossessed people home is a non-solution because so many don’t have homes. They are truly walking in the wilderness…pretty strange for the modern age and the New Year 2016.

While the Paris and San Bernardino attacks cast a dark shadow over the holiday season and did not provide the classic run-up to Thanksgiving, Christmas or New Years, the solidarity reflected in global responses must be taken as a positive indication of at least the prospect of more collaboration among nations against a common foe. Whether a grand scheme is created or fractious interventions continue, a more robust response is certain. Let’s just hope it begins to turn the tide and doesn’t create more uncertainty, retribution and blame.

Even factoring recent events into the yearend equation, I don’t see a gloomy year ahead. As this country has experienced for some time, there will continue to be bumps and bruises, convolutions and diversions, and a measure of economic fluctuation, as we’re witnessing during a current market dive. But overall, the interactive world will remain mobile, engaged, cooperative, and committed to progress. Those of us fortunate to be American citizens will continue to enjoy economic growth, emerging opportunities, ample goods and services, and many, many options. GDP growth should be above 2.5%- some predict around 2.8%; inflation will grow to above 2%, perhaps as much as 2.3%, which is well above the current 1.2% for 2015. Unemployment will continue to decline from the current 5% to a range of 4.4% to 4.6%, signaling steady economic growth, that is, if not spectacular, still reasonable. Commodity prices are languishing and will continue into 2016 but this also reduces manufacturing costs and keeps inflation low.

Crude oil prices are a major driver of economic progress, and crude prices are predicted to remain between $45 and $50 per barrel as we move through 2016. With massive supplies, we are now at a 12-year low at $33.88 a barrel but there is good reason to believe that crude prices will remain in the range of $40 to $50 for the next twelve to fifteen months, providing a solid base for consumer spending (3.2% annual rate), more investment (housing 6.1% annual growth rate), and lower operating costs across all industries. The Fed raised interest rates a bit in December and if things go reasonably well, will surely raise rates again in 2016 but it won’t create many problems. A greater concern is the movement toward a higher minimum wage, which will impact small business and boost inflation. Over time, it may also be good for the general economy. Overall, our economy is more stable than any other country and the U.S. continues to serve as the bedrock for global investment and economic development. This should continue through 2016 and well into 2017, unless there are major worldwide upheavals. With so much riding on stability, this is unlikely, no matter how many skirmishes, ambushes and attacks occur. Interventions will move to an entirely new level to preserve some semblance of world order.

That said, incursions and test case scenarios are escalating. In addition to the Middle East circus, China and Russia in particular will slowly test the will of other sovereign nations, especially the United States. Whether building made-made islands in the South China Sea or disputing territorial rights with Japan, Taiwan and South Korea, China will rattle its saber to test the resolve of the U.S. and her allies. However, China’s internal economy is sinking (thus the current market doldrums) and will continue to decline and domestic issues will divert its attention inward, as the enormous Chinese population seeks more freedoms, a greater voice, jobs, property ownership and less government meddling. There are too many problems there for China to spend much time or money gaming the United States. Russia will continue to make plays in the Artic and meddle in Eastern Europe and Syria, but it may also be forced into joining a more sustained, coordinated effort against ISIS. South America remains a quagmire of debt and only Brazil is digging out after years of recession. While still marginal, it is a regional leader and may see actual growth in 2016. With some luck and reasonable weather, its drought will ease and decent harvests will boost GDP.

Turning attention homeward, I see opportunity for growth and development. As noted in other articles I authored last month, it is time for new thinking, exploration and evolution to a progressive way of managing our affairs. Whether business, government or our personal lives, the convergence of technology, trends, culture, and information will bring new opportunities to those adventurous enough to seek them. Baby Boomers are working longer, Millennials are competing like crazy; new enterprises are being created and new horizons are constantly being defined. In this context, however, there also remains enormous problems with social inequality and fiscal inequity; there are more people below the poverty line than ever before in American history; educational performance remains low; far too many people have inadequate retirement savings; and, of course, Washington politicos are about to launch another totally inane election cycle. But who would want to trade all this? It is, after all, our country, our struggle, our future.

There is much to do and we have the resources to undertake any challenge. The question is, do we have the resolve, capacity, and deep commitment to think, plan, adapt and move into a New Year that has promise mixed with equal measures of sadness, anger, frustration, and anticipation? Are we ready to move forward regardless of known and unknown challenges? And, are we able to set aside latent anxieties and embrace the inherent beauty and wonder of this nation? I believe the answer is yes.

JFL Pic Blue Shirt-Yellow TieWith over three decades working in and with federal, state and local government, John Luthy understands public agencies and private organizations.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).