EconoMonitor

How Accurately Did the FM Website Forecast Events in 2011?

Summary:  Year-end is a time to look back at one’s forecasts, and look forward to what might happen next year.  Today we do the former, looking at some of the accurate predictions made on the FM website.  This is a snapshot of the Predictions Page (wrong forecasts appear on the Smackdowns Page).

“The world is changed, I can feel it in the water, I can feel it in the earth, I can smell it in the air.”
— Said by Treebeard, leader of the Ents, from The Two Towers– part II of Tolkien’s The Lord of the Rings saga.

You, the readers, are the purpose of the FM website.  We write clear and bold forecasts to help you better understand our world, and its rapid evolution in the 21st century.  As you can see in the articles cited in these posts — and in the comments posted – most of these forecasts were controversal when written. Of course, that does not imply that they were unique, original, or the first predictions of that kind.

Contents

FIRST click here to bring up the full post.  THEN click on one of these link to go to that section of the post (or just scroll down):

  1. Starting in 2006:  forecasting that the Constitution is dying, and the Second Republic along with it
  2. In 2003 saying that the insurgents in Iraq would prove to be determined and difficult foes
  3. In 2007 forecasting that the insurgents in Iraq were near defeat, the war was changing, and that we’d win nothing
  4. In early 2008 explaining that a serious recession was here.  Now.
  5. In 2008 and after forecasting a long and futile war in Af-Pak
  6. From 2007 – 2010 predicting that neither the US nor Israel would attack Iran
  7. McCain would lose; Obama would win but prove a poor president
  8. In 2008, 2009, 2010, and early 2011 correctly predicting that the inflationistas would be wrong
  9. That the doomsters’ forecasts were wrong about a peak oil crash soon after 2008
  10. In July 2008 discussing the EMU’s possible collapse; in Spring 2010 that the periphery might burn
  11. Homes would be demolished to removed the excess supply
  12. Other predictions


(1)  The Constitution is dying, and the Second Republic along with it

The big one among the forecasts on the FM website.  Looking more prescient every day.  The first Republic (177 – 1783) ran under the Articles of Confederation.  The Second Republic (1783 – ??) runs under the Constitution.  The Second Republic is dying.  What comes next might not be as pleasant.

This forecast is one of the most important on the FM website.  It’s one of the most accurate and ahead of its time.  But it also features at the top of the Smackdowns Page — as the decay has occurred faster than I expected.  Faster than in my worst nightmares.

(2)  In 2003 saying that the insurgents  in Iraq would prove to be determined and difficult foes

That was controversial in 2003, when the government and war boosters described the insurgents as “dead-enders” and “bandits.”  Articles on the FM website painted a different picture, predicting that the insurgents would prove to be determined and difficult foes.

By all accounts opposition attacks steadily grow more sophisticated. Note the increasing number and sophistication in opposition use of Improvised Explosive Devices (IEDs). War is the ultimate form of Darwinian evolution. Guerillas learn swiftly; only the most capable survive. — from the very first FM post:  Scorecard #1, 22 September 2003

Coalition forces appear to have lost the vital connection between strategy and tactics. Clear and feasible goals drive strategy, which drives tactics. … What are the Coalition’s goals and strategy? If these are in fact uncertain, as they were in the Viet Nam war, development of successful tactics becomes difficult. Maintaining domestic support and confidence becomes problematic.

Fortunately, the public in Coalition nations does not seem to know the odds against us. In modern times, insurgents’ successes far outnumber the few successes of western nations.

Scorecard #2, 31 October 2003 — Note that even today our war advocates often get this key point wrong (ie, foreign armies fighting local insurgencies usually lose).

What do we know of the enemy?

“There are former regime members who want to disrupt the successes achieved here in the north,” Major General David Petraeus, commander of the 101st Airborne Division, said. There are also “criminals … who are willing to be guns for hire,” in addition to “some foreigners who have come in small numbers and have been involved in this as well.  (Associated Press, 9 November 2003)

General Petraeus’ opinion deserves respect. But describing insurgents as bandits goes back to the Chinese revolution, and probably beyond. Perhaps natural bravado, but lack of respect for one’s opponents is a bad sign. Especially given their progress in achieving objectives and their growing tactic skills. If they continue to develop at this rate, soon “insurgency” will no longer be a correct label. Per Webster’s: a condition of revolt against a government that is less than an organized revolution and that is not recognized as belligerency.

… Worse, reports like following foreshadow a next (perhaps distant) phase for the insurgency, where insurgents have effective control of some areas, into which only well-armed Coalition forces can penetrate …

Scorecard #3, 9 November 2003

For a full listing see the FM Reference About our wars – Iraq, Af-Pak & elsewhere.

(3)  In 2007 forecasting that the insurgents in Iraq were near defeat, the war was changing, and that we’d win nothing

Articles in March and September 2007 forecast that the Iraq insurgency was near defeat; the war was evolving into a struggle between the Kurds, Sunni Arabs, and Shiite Arabs.  Articles in 2008 confirmed that forecast.

  1. The Iraq insurgency has ended, which opens a path to peace, 13 March 2007
  2. Beyond Insurgency: An End to Our War in Iraq, 27 September 2007 — Declaring the insurgency over as the new Iraq emerges.
  3. Iraq, after the war, 20 May 2008
  4. Slowly the new Iraq becomes visible, 18 July 2008

Articles in 2009 developed that forecast, predicting that the US would achieve few or none of its political goals in Iraq.

  1. If we won in Iraq, what did we win? Was it worth the cost?, 15 July 2009
  2. We collect our winnings in Iraq, 12 December 2009
  3. The early returns come in:  One criterion of victory in Iraq: when will the oil flow?, 3 February 2010
  4. Validating the forecast: The end of our Expedition to Iraq: our war boosters cheer despite its long-predicted failure, 24 October 2011

For a full listing see the FM Reference About our wars – Iraq, Af-Pak & elsewhere.
(4)  In early 2008 explaining that a serious recession was here

The recession officially started in December 2007.  In January and March these posts had already forecast that it would be so large as to have serious geopolitical effects.  As seen in the articles cited — and the hostile comments — this was controversal, even as late as June 2008.

  1. Geopolitical implications of the current economic downturn, 24 January 2008.
  2. The US economy at Defcon 2, 11 March 2008
  3. Making us dumber, chanting “Dude, where’s my recession?”, 3 June 2008

For a full listing see the FM Reference Page Financial crisis – what’s happening?  how will this end?


(5)  In 2008 and after forecasting a long and futile war in Af-Pak

Such as this in May 2009:  “They will find their own destiny, and our armies can do little to influence this.  Neither can our flocks of airborne killers, nor our legions of special ops assassins.”

For a full listing see the FM Reference About our wars – Iraq, Af-Pak & elsewhere.


(6)  From 2007 – 2010 predicting that neither the US nor Israel would attack Iran

Looking back it’s astonishing to read the many predictions by major experts that the US or Israel would bomb Iran soon.  Or very soon.  Analysis on the FM website has suggested otherwise (after 2010 the picture grew darker).

(a) Will Israel commit suicide? More rumors of a strike at Iran , 22 December 2007:

For all these reasons I doubt Israel will attack Iran.  But that is just a guess.

(b) Will we bomb Iran, now that Admiral Fallon is gone?, 17 March 2008:

Is this analysis, prophecy, or fun speculation for the box-office?  Not much substance here by which to decide.  I suspect the prize is behind door #3:  no war with Iran.  Bush has neither the political capital nor laid a sufficient foundation with either the American people or our allies.

For a full listing see the FM Reference Iran – will the US or Israel attack Iran?


(7)  McCain would lose; Obama would win but prove a poor president

(a) Why McCain will lose the election, 1 July 2008

(b) Obama would prove a poor president, 26 February 2008 — Excerpt:

As these problems reach critical dimensions and our economy sinks into what is (at best) a severe recession, our national leadership will likely move into the hands of someone with astonishingly little capacity to govern.  Barack Obama has amazing rhetorical gifts and the potential for greatness, but becomes President with his skills immature, his vision on major questions of public policy unformed, and no executive experience.  His brief career and campaign of empty rhetoric — appealing to the best of America’s history and aspirations — tell us little about the course he will chart for America, or how he will respond to the terrible choices that lie in our future.  He provides a frame into which his followers project their dreams — a virtual reality candidate.  (Candidates’ white papers, like party platforms, have historically proved poor guides to their actions)

This is our failing, not his.  High office in America goes to those with both drive and hunger for fame and power.  That Obama goes along with our childlike dreams says much about us, but nothing bad about him.  However the election might result in weak leadership for our national government during tough times, unless he grows in office (which would be wonderful, but not something we can rely upon).”As these problems reach critical dimensions and our economy sinks into what is (at best) a severe recession, our national leadership will likely move into the hands of someone with astonishingly little capacity to govern. Barack Obama has amazing rhetorical gifts and the potential for greatness, but becomes President with his skills immature, his vision on major questions of public policy unformed, and no executive experience.

For a full listing see the FM Reference About Politics in America.


(8)  In 2008, 2009, 2010, and early 2011 correctly predicting that the inflationistas would be wrong

During the great inflation scare of early 2008 (and 2009, and 2010), readers of the FM website saw forecasts of a deep recession with debt deflation — followed by low inflation.  We’re now in year 4.  Still fighting debt deflation.  Still no high inflation, let alone hyperinflation.  These posts  explained why.

Higher food prices, riots, shortages – what is going on?, 29 April 2008:

… What happens If prices of commodities and imported goods continue to rise, but wages do not? We get deflation, as many households are unable to pay their bills and default on their loans. This contraction pushes businesses into bankruptcy, defaulting on their loans and firing their works. And so the effects ripple out through the economy.

A more detailed explanation followed on 17 June 2008::

For example, as we see today, rapid global growth can increase consumption faster than capital investments can increase the supply of commodities. As food and energy consume more of people’s budgets, expenditures on other things must drop. Discretionary purchases go first, and so the economy slows as those business reduce spending (capex, headcount, hours, wage rates — it all adds up). Eventually some people cannot make their monthly loan payments (credit cards, auto loans, mortgages, etc). Now the financial sector suffers from rising defaults. This is deflation, caused by rising commodity prices and too-tight monetary policy.

To recap this greatly simplified explanation:

  • Rising sector prices plus tight money can create deflation.
  • Rising sector prices plus easy money can create inflation.

Other posts about inflation during the early 2011 hyperinflation scare:


(9)  That the doomsters’ forecasts were wrong about a peak oil crash soon after 2008

For more about this see the FM Reference Page About Peak Oil and Energy.


(10) In July 2008 discussing the EMU’s possible collapse; in Spring 2010 that the periphery might burn

(a) Can the European Monetary Union survive the next recession?, 11 July 2008:

Consider the Euro, and the larger structure of the European Economic and Monetary Union (EMU or Eurozone). They look like successes. Not so, as it is too soon to tell. Social structures are subject to punctuated equilibrium. EMU stability during global expansion since its creation in 1999 tells us little. What matters is its stability during the next recession. The foundation might be build on sand, structurally flawed. Perhaps even doomed to likely failure.

(b) The periphery of Europe – a flashpoint to the global economy, 8 February 2010:

The european economy is highly integrated, and collapse in even a peripheral nation might ripple though the region with unpleasant consequences. … So only one of the 4 remedies is possible. The first 3 (the ones we did) are not possible under the European Monetary Union. That leg of the stool cannot possibly carry the load for long. Therefore structural change is inevitable — unless a strong recovery shows itself right now. Otherwise the European unity project will fail under the pressure – or grow stronger, to a true union. None can reliably forecast what path Europe’s people will choose.

(c) The EU does Kabuki for Greece. Is it the next domino to fall?, 14 April 2010

The ever-evolving rescue plans are — so far — just Kabuki. … The theory is that a deep recession can accompany massive reform of the Greek political regime (e.g., they pay much more taxes) and society (e.g., they work longer).   The likely result of this process is the same as for the US government-sponsored mortgage enterprises:  a massive flow of government lending, which funds the deficits AND substitutes for private loans as they mature.  This buys time for a combination of fiscal and debt restructuring (extending maturities, plus reductions in interest rates and principal).  But will the people of Europe’s core — its creditor nations, esp Germany — approve?

… Of course, the Greek people have another alternative if they consider the price demanded from them too large :  forced restructuring, aka default.  Slowly this fact emerges from the shadows into public discussion … The longer Greece wait to default, the more pain and suffering.  Default is an option; the national interest of Greece requires considering it now.  And using it soon.


(11)  Homes would be demolished to removed the excess supply

This was greeted with howls of horror.  As heresy.  Now it’s just news.

  1. Diagnosing the eagle, chapter I — the housing bust, 6 December 2007
  2. A vital but widely misunderstood aspect of our financial crisis, 18 September 2008 — Too many homes.
  3. Destroying houses in order to boost home prices, 16 December 2008
  4. Another step to solving the housing crisis: downsize cities by destroying neighborhoods, 2 April 2009


(12)  Other predictions

  1. The articles in 2008 saying that the food crisis was exaggerated by the news media and activists
  2. The articles from early 2008 – now warning that the slow unraveling of Mexico’s State would continue
  3. College education in America, another broken business model, 3 July 2009 — In 2011 at last this problem at last is getting media attention.
  4. Republicans have found a sure-fire path to victory in the November elections, 5 February 2010 — In mid-2011 our political experts noticed this.
  5. Effective treatment for this crisis will come with “The Master Settlement of 2009″, 5 October 2008 — Slowly people realize that only strong international cooperation can resolve this global crisis.  Too bad we waited so long to start.
  6. Predicting that drones would eventually replace manned craft in many air force operations T– that was controversal in 2009; not so now:  America’s dominance of the sky slowly erodes – inevitable or avoidable?, 22 September 2009.
  7. Not a prediction, just being ahead of the pack:  first writing in 2008 about income inequality in America:  A sad picture of America, but important for us to understand.  And many times since then.  Now the subject has become trendy.

This post originally appeared at Fabius Maximus and is posted with permission.

One Response to “How Accurately Did the FM Website Forecast Events in 2011?”

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