REFLECTION, ANTICIPATION AND TRANSITION

Traditionally, when one year transitions into the next, we are enticed to reflect on the past 12 months and attempt to project what might be in the offing going forward. We know what happened last year. However, since we live in a uniquely volatile period in history, predicting what we should anticipate during the next dozen months may prove to be challenging. It seems appropriate to begin by citing a few statistics which we are not excited about. Countrywide, last year, our homeless population surged to 653,000. This amounted to a 12% increase over previous years - the highest recorded increase in history. (Wall Street Journal). The number of gun related deaths exceeded 40,000 in 2023. All of these were carried out with weapons nobody envisioned when the Second Amendment was ratified in December of 1791. This was the tenth year in a row that the number of gun related deaths exceeded 39,000. Nobody expects this horrific statistic to change much this coming year. On the bright side, we escaped the recession many analysts predicted, even as the inflation rate dropped more than 50%, to 3.14% against 7.11% last year. In fact, during the final months of 2023 most economic indicators registered significant improvements. The stock market ended up at an all time high. The Consumer Confidence Report, a measure of how Americans feel about business conditions and the job market, rose to 110.7 - up from 101.0 in November - the largest one month jump since July. Overall, 71% of consumers polled said they felt positive about 2024, up from 64% a year earlier. Real GDP - a measure of the value added created through the production of goods and services - rose by 2.8%, better than expected. And consumer spending during the 2023 holiday season increased by 3.1%, the most significant change in years and in line with pre-pandemic spending levels. All this while, by historical standards, unemployment remained low. For most of us these latest statistics should be comforting, if not exciting. However, for those who view our socio-economic development within a political framework, this economic upturn may throw a monkey wrench into already well established electoral campaigns that are infused with a deep-rooted "negativity bias." Our highly charged political actors routinely tend to reject positive data which their perceived opposition is likely to flaunt. Resolution of significant geopolitical issues during the coming months will prove complicated and, while desirable, are not immediately expected. Tensions around the world can lead to trade disruptions, political instability and supply chain disruptions. All of these have the potential to erase some of the economic plusses of the past several months. The war between Israel and Hamas in Gaza continues unabated. The Gaza strip is devastated. Nearly 70% of the housing units have been destroyed or damaged. More than 22,000 Palestinians, more than half women and children, have been killed in the aftermath of the murderous rampage experienced by Israel on October 7, which killed around 1,200. Israel's Prime Minister Netanyahu, who is fighting for his political survival, promises that the war could continue for several more years. Attacks by Iran backed, Yemen based, Houthi rebels on international shipping in the Red Sea further destabilizes the situation in the region, and threaten to expand the conflict beyond the current combatants. These have already affected supply chain issues. The war between Ukraine and Russia will soon enter its third year, while support for Ukraine appears to be dwindling among its Western supporters. No end in sight, while Putin is again running for president in Russia's mid-March election. Domestically we are confronting challenges on multiple fronts. Our Southern border continues to encounter what amounts to the greatest mass invasion of migrants since the Italian Diaspora in the late 19th and early 20th century. During 2023 alone, U.S. Customs and Border Protection agents encountered nearly 2.3 million migrants. Most come from Central America, Cuba, Venezuela and Haiti, attempting to escape conflict, persecution, or large-scale human rights violations. Politicians point fingers, but they seem unable to agree on measures to stem the flow. Our political stalemate about these and other issues conveniently segues into the potential implications of the culmination of the current election year. A majority - 75% - of U.S. adults believe that democracy as we know it could be endangered. Although most disagree which one of our candidates poses the greatest risk. Almost 84% of Democrats foresee ominous consequences of the threat from a reemergence of a Donald Trump presidency, while 55% of Republicans believe democracy is already broken. More haunting is that 23% of those surveyed expressed the believe that "American patriots may have to resort to violence to save the country." (33% of Republicans, 22% of Independents and 13% of Democrats). (Brooking Institute, Oct. 2023). Over half of the world's population, some 4 billion people in 64 countries and the European Union, will hold national elections. This is the biggest global election year in history. For many these will prove consequential. Far-right, functionally anti-democratic, parties are predicted to gain significant support. In at least eight European countries extreme right populists are already either the dominant or second most popular political party in their respective country. Anti-immigrant, anti-Semitic and anti-Muslim platforms makes you wonder if we are about to come full circle since the Fascist years of the mid-20th century. Democracy is on the ballot almost everywhere. Maria Ressa, an investigative journalist from the Philippines who won the Nobel Peace Prize in 2021, was very blunt when she suggested that "We will know whether democracy lives or dies by the end of 2024." Happy New Year - may the force be with us. Theo Wierdsma