To welcome the new year, I thought it might be interesting and fun to make some predictions about different events in 2011.
Finance and Economics
1. Buoyed by healthier signs of a recovery, the S&P500 ends the year up 15% at 1,446.
2. Unemployment experiences a modest decline ending the year at just under 8%.
3. Oil ends the year at $110 per barrel due to a weaker dollar, activity spurred by an
economic recovery, and recurring instability in the Niger Delta.
Geopolitical Developments
4. Track II diplomacy sets the stage for possible Korean reunification.
5. President Obama appoints Hillary Clinton as the 23rd Secretary of Defense (whether
Congress confirms her is another story).
6. Nigerian election irregularities in 2011 lead to widespread violence between the Muslim
north and Christian south as well as increased instability in the Niger Delta.
7. China and India experience increased tension over their mutual border as China
continues to build its dam project on the Yarlung Tsangpo River.
8. Spurred by their Iranian patrons, Hezbollah militants clash with Israeli forces on the
Lebanese border.
9. Southern Sudan chooses independence in its January referendum vote.
Other
10. The International Olympic Committee announces Pyeongchang, South Korea as the
host city for the 2018 Winter Olympics on July 6, 2011.
Reflections of a Rational Republican 
2011 should prove to be a interesting year. The big challenge will be whether political opponents can work together to solve huge domestic and global problems. I applaud you for helping start the discussion.
I’m counting on it. My understanding is that the U.S. economy tends to outperform when the President is a Democrat and the Congress is predominantly Republican and vice versa. I have also heard that the economy tends to perform better in the second half of a President’s term.
The logic is that in the first instance the two parties keep each other in check and must compromise more often in a manner that benefits more Americans. Let’s face it, when left to their own devices both parties tend to spend like drunken sailors. In the second instance, the President is focused on reelection and will move heaven and earth to get the economy moving.
However, I have never independently looked at the data to confirm whether either of these statements is borne out in the data. It looks like you just gave me an idea for another blog! Thanks!
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