2012: A Look Back at the Coming Year
In looking back at the economy of 2012, we can safely say no one expected it to turn out the way it did.
This year saw the development of many revolutionary new economic tools. Probably the most important is the one which has, so far, staved off the European crisis. It came about when EU leaders realized their constant stream of Critical Economic Summits had done a miraculous job of preventing people from realizing that several Euro zone nations are, in fact, bankrupt. French President Sarkozy’s invention of the Perpetual Critical Economic Summit is sure to be awarded next year’s Nobel Prize in Economics.
Honorable mention could well go to Joe Simmons, Lou-Ellen Dickson and Jackie Yu of Plano, Texas. This entrepreneurial trio pooled their final three weeks of unemployment insurance and bought half of Greece. Sadly, this hasn’t improved their personal finances but it’s an example of the American Can-Do spirit at its finest.
The permanent EU crisis continued to be good news for the U.S. financial system. Global investors, desperate for safe assets to invest in, kept up their record demand for any securities even vaguely associated with America. With Treasury bonds now yielding negative 5 percent, the nation has found a steady new income stream which has made significant inroads into the Federal deficit.
The demand for securities marked “Made in America” raised a number of other entities’ fortunes as well. Citibank, Bank of America, and JPMorgan Chase were so flush with cash that they all actually made small business loans this year. One each.
Also, the scarcity of AAA rated assets elsewhere gave rise to the use of piggy banks as collateral. This brought about what was perhaps the oddest event in the history of high finance as CFOs and CEOs from around the world met with members of Mrs. Pilkington’s kindergarten class at the Hoover School in Tenafly, N.J. While the students were pleased by the wide assortment of milk and cookies brought by the executives, they were otherwise disappointed in the companies’ presentations. “These weren’t good investments. What do they think we’re five years old or something?” said Sammy Flemming, 6. Reporters weren’t surprised when nap time came and went without a single deal being made.
On the political front everything was overshadowed by the historic results of the Presidential and Congressional elections. At the start of the year no one anywhere imagined there would be a Betty White-Tom Hanks ticket, let alone that when all was said and done our first woman president would also be the oldest person in the nation. President White’s decision to appoint Warren Buffet as Federal Reserve Chairman, Secretary of the Treasury and ambassador to China was met with near universal approval.
Also unforeseen: The entire New York Congressional delegation being replaced by the cast of Glee while Texans delivered a rare bi-partisan message, ousting their Senators, Representatives and Gov. Rick Perry with some slightly used bricks. Perry's replacement is now seen as the frontrunner for both the GOP and Democratic nomination in 2016.
These changes were inevitable given the political problems that preceded the elections. Congress and the President were deadlocked over every single issue they discussed. Observers agree that voter anger boiled over when the two sides announced they would be unable to approve a list of Official State Muffins. In the wake of that Congressional approval ratings actually went into negative numbers, forcing previous years’ approval ratings to also be lowered.
Voters registered their approval of their new lawmakers by lifting Congressional approval ratings back into the high single digits.
CONSTANTINE VON HOFFMAN | Columnist
Constantine von Hoffman is a writer and sometime standup comedian. His work has appeared in Harvard Business Review, NPR, Sierra magazine, Brandweek, CIO, The Boston Herald, TheStreet.com, and Boston Magazine.