We’ve already counted down the top stories of 2014. But what can we say about what’s likely to happen in the new year? What are the big stories to look for in 2015?
As the old saying goes, predictions are hard, especially about the future. The biggest stories are usually the things we can’t predict. Some of them are things we know are out there as possibilities, but we can’t say if or when they will happen or how big they will really be. In this category are things like: a stock market crash and/or bear market, after the big run-up of the past five years; a major terrorist attack on the US; a new vacancy on the Supreme Court (how would you like to see that confirmation battle?); the “next Ferguson,” or the next attack on the police, following the pattern of the recent shooting of two NYPD officers.
And these are just the known unknowns. It’s the unknown unknowns that really get you.
But there are a few things we can say with some confidence. Here are eight big stories that have been brewing in 2014 that are likely to have a bigger impact in 2015. Expect the unexpected, and this.
1) The oil stimulus.
We finally found a stimulus that actually stimulates: a huge drop in the price of oil. Yes, this will hit producers of oil, who have helped drive what little economic growth and employment growth we’ve had since the Great Recession. But we’re not Russia or Venezuela. Dictatorships become totally dependent on oil revenues because they have crushed every form of independent economic activity. (More on that later in this list.) But our economy is just not that dependent on oil producers. We have much more to gain from lower fuel costs, which boost every part of the economy, not to mention the impact on the budgets of the poor and middle class, who will find it a lot easier to keep their gas tanks filled.
The big question is what will happen to the fracking revolution. On the one hand, fracking is part of the reason for the decline in oil prices, following the same pattern as in the 1970s: high oil prices encourage greater investment in oil exploration and production, which opens up new supplies of oil, which drives the price back down. But if fracking were driving the price of oil, we would see it drop only to the point where fracking is still barely profitable—but not below. Yet it seems to have done so and may remain there for quite some time. Fracking is a relatively high-cost way of drilling for oil, and it has prospered in an era of high oil prices. So the current plunge puts the future of many fracking operations in doubt. For reference, here’s a report with some numbers on the cost of production per barrel for different producers, and you can see that the Saudis are still profitable way down at $30 per barrel, while frackers require about $62 per barrel. The current price of oil is about $55 per barrel.
The question is: how will they respond? First, I expect big oil companies will want to keep some of the infrastructure of fracking in place. They know that low prices are not necessarily going to last, so they will want to be ready to go as soon as prices bounce back up. But there’s another factor to look for: will frackers find a way to lower their cost of production to stay profitable? After all, that was the whole cause of the recent fracking boom. The basic idea of hydraulic fracturing has been known for decades, but it was considered too expensive to be practical. The current boom was set off by innovations that made fracking less expensive. To keep the boom going, frackers will need to find another set of innovations to drive their costs even lower. And that would have some very big long-term implications, helping to drive the price of oil permanently lower.
2) The EPA’s war on energy.
Naturally, when low energy costs are finally giving the economy a chance to thrive, the environmentalists are there to put the brakes on.
President Obama’s response to the voters’ repudiation of his party and his policies has been to dig in, finding any excuse to use unilateral executive power to push through items in his agenda. Hence the administration’s “climate onslaught.”
The coming rollout includes a Dec. 1 proposal by EPA to tighten limits on smog-causing ozone, which business groups say could be the costliest federal regulation of all time; a final rule Dec. 19 for clamping down on disposal of power plants’ toxic coal ash; the Jan. 1 start date for a long-debated rule prohibiting states from polluting the air of their downwind neighbors; and a Jan. 8 deadline for issuing a final rule restricting greenhouse gas emissions from future power plants. That last rule is a centerpiece of Obama’s most ambitious environmental effort, the big plan for combating climate change that he announced at Georgetown University in June 2013.
The EPA’s just-announced ozone standards are so absurdly restrictive that most of the continental United States will be non-compliant.
So just when the oil price collapse is boosting the economy and might save the president’s reputation on that issue, he is conspiring to shut it all back down again.
3) The Supreme Court gets another shot at ObamaCare.
One of the top stories of 2014 was the way the administration has been trying to re-write ObamaCare after the fact to keep it from crashing. One of those rewrites was to grant the federal government the ability to subsidize health insurance offered through its own exchanges, rather than just through state-run exchanges, which is what the law actually says. Without these subsidies, health insurance rates will rise sharply, driving people out of the federal exchanges and possibly setting off the feared “death spiral,” in which an exodus of healthier people drives up rates, which drives out even more healthy people, which drives rates up farther, and so on.
There was a lot of discussion about this in 2014 because of the arguments over two court cases, Halbig v. Burwell and King v. Burwell. But neither of those cases was decided definitively this year. In November, the Supreme Court decided to take up King v. Burwell, and it will issue its ruling in 2015.
Jonathan Gruber’s admissions on this subject, which were exposed this year, provide the Supreme Court with everything it needs to strike down the federal subsidies.
We know something about the likely outcome from the Supreme Court’s 2012 ruling on the individual mandate. Four of the conservative justices ruled to strike it down, and Chief Justice John Roberts was ready to join them—but at the last minute he chickened out, not wanting the court to make such a momentous decision and be seen as overruling the president and Congress. (Never mind that sometimes this is the Court’s job.) With Obama weakened, Congress now fully opposed to ObamaCare, and public opinion still running strongly against it, will Roberts show a little more backbone this time?
Maybe he won’t and the court challenge will fizzle. But the consequences of a proper Supreme Court ruling would be huge.
4) Republicans will have just enough power to fight over it.
Republicans are always engaged in a civil war between the small-government radicals and the wishy-washy, me-too, establishment RINOs.
When Republicans are in the minority in Congress, these conflicts tend to be less important because there’s not much point in arguing about what to do with the power you don’t have. When Republicans control Congress and the presidency, their internal squabbles tend to be subordinated to and shaped by the agenda of the president.
In 2015, Republicans will control both houses of Congress, yet there will be no Republican president, and not even a presumptive nominee for the presidency. So they will have just enough power to fight over it.
The arguments will be over how much Congress should challenge President Obama head-on. The establishment fears a hostile media and assumes they will get blamed in any showdown, while the Ted-Cruz-style radicals think Congress should asserts its powers and are eager to show the voters who sent them to Washington that they came here to actually do something.
To add to this, President Obama will be actively goading the Congress by asserting as much executive authority as he can invent. For him, it’s a win-win-win. If he asserts unconstitutional powers and Congress acquiesces, he gets more power. If Congress fights back, he goads them into a shutdown or a budget crisis for which he believes they will get the blame. Either way, he knows they will fight each other the whole way.
It’s going to be hard for Republicans to emerge from this unscathed. Then again, they’ve been up to their necks in this kind of infighting for the past six years, and the party is in a stronger political position than it has been in a long time. So perhaps there is a perverse way in which all this conflict is actually good for the party.
5) Will anyone challenge Hillary?
A little conflict might be good for the Democratic Party, too. Right now, the elderly and uncharismatic Hillary Clinton is the prohibitive front-runner for the Democratic nomination, but there is a lot of hunger among the rank-and-file for someone, anyone who is a little more inspiring. Those of us on the right know the feeling: we watched John McCain and Mitt Romney get the Republican nomination in the past two elections. And my colleague David Harsanyi got it right: Hillary is the Democrats’ Mitt Romney.
Then throw in the fact that feminists have spent the past year whipping up a hysteria about sexual assault and loutish, sexist men—and now they will have to deal with the whole louche sexual history of Bill Clinton. (That’s a top story of 2016 that I’m really not looking forward to.) If the left still follows Hillary’s example and stands by their man, they’re going to get hammered for their hypocrisy. And who knows, maybe they will even suffer some pangs of conscience.
Although 2015 is not an election year, by December the primaries will be in full swing, and we will know if there is a serious challenger to Hillary Clinton. But I don’t think Hillary will be challenged from the right, because the Democratic rank and file actually thinks that she is to the right, that she’s too much of a moderate, establishment corporatist. So she is far more likely to be challenged from the left. Given how the public seems to have moved to the right during the Obama years, that would be a very interesting, and very foolish, decision.
6) A police rebellion.
In their eagerness to appeal to racial politics, the left created a new narrative in which the police are the enemy—they are all racists itching to kill young black men for no reason. The big story emerging from the end of this year is that the police are pushing back. They spent the last 20 years putting their lives on the line to save us from the deadly crime wave—this year also saw a 24% increase in the number of police officers killed in the line of duty—and this is the thanks they get.
They are already in revolt against New York City Mayor Bill de Blasio. After turning their backs on him at a memorial service for a slain officer, they booed him at an NYPD graduation ceremony, and now the New York Post reports that arrests are down 66% in December, including a 94% drop in tickets and summonses for minor offenses. The Post describes it as a “virtual work stoppage.” If anyone wanted a test of “broken windows policing,” they’re about to get it. I hope they also don’t mind a miniature re-enactment of the 1970s in New York City.
Nobody knows for sure what broke the crime wave of the 70s and 80s, but I remember that the favorite response to crime in the 1990s was for politicians to promise to put more police officers on the streets. (Did I mention the Clintons? Putting “100,000 additional cops on the street” was one of Bill Clinton’s perennial favorites.) Now that the police officers are there, the left hates them. Something has got to give.
7) Russia will be in trouble and will be trouble.
One of the most enjoyable consequences of the oil price collapse is seeing how it takes the wind out of the sails of a whole collection of evil regimes.
Oil is the dictators’ best friend. It is a steady source of revenue that can be maintained and controlled by the government, often with the help of foreign subcontractors, even when government controls, corruption, and cronyism have crushed the rest of the economy. So a collapse in the price of oil is a disaster for the bad guys.
Nobody is getting hit worse than the regime in Venezuela, which is now on the verge of defaulting on its debt. Since Venezuela has been a big economic sponsor of the regime in Cuba, you can see how a Venezuelan collapse will affect Cuba—and may well be the reason the Castros are seeking a lifeline from President Obama.
But the big geopolitical implications will come from the impact of the oil collapse on Russia. For years, the conventional wisdom has been that Europe is dependent on buying Russian oil and gas; now we’re about to see to what extent Russia is dependent on selling its oil and gas to Europe.
The downside is, as Megan McArdle puts it, “Russia’s Problems Are Everyone’s Problems.” “[T]he world is about to experience a major financial crisis in a country that seems to deal with its internal troubles by slicing off bits of neighboring countries.” Like its leader, Vladimir Putin, Russia is a country with a Napoleon complex: the smaller and weaker it gets, the more belligerent it becomes, as a form of overcompensation.
But shirtless macho posturing only gets you so far when you don’t have the cash to back it up. There is some speculation that a financial crisis could lead to defections in Russia’s “near abroad,” its ring of former Soviet republics and fellow kleptocracies. Then there’s the fact that Putin’s aggression has permanently alienated Ukraine, which is now taking steps toward joining NATO. Meanwhile, the Baltic states are increasing their defense budgets. One hopes that other European nations will follow, at a time when Russia is not in a position to match their spending.
I think Russia is weak enough that Putin would slink away with his tail between his legs, if we had an American leader with the guts to call his bluff. But that’s not going to happen, so in 2015, look for a volatile mix of greater belligerence and diminished capability.
8) Did anybody tell the enemy the war is over?
President Obama just announced the end of the war in Afghanistan. At least, it’s over for us. It will, of course, still rage on for the Afghans.
Maybe they’ll do just fine with minimal US and NATO support. Maybe the Peshawar attack, in which terrorists seized a school and slaughtered 132 children of Pakistani army officers, will cause Pakistan to cut off its support for the Taliban in Afghanistan, leading to a new era of cooperation in which Pakistan and Afghanistan join forces against the Taliban—something that has not, alas, happened before now.
But history suggests the war in Afghanistan will come back to us, one way or another. After all, president Obama already declared the end of the war in Iraq—and the big news of 2014 is that we’re back in again, and we now have to take on Syria, too.
Call it the Pacino Doctrine: just when we think we’re out, they keep pulling us back in. So one of the big stories to follow in 2015 is to watch whether we’re going to have to restart yet another war that Obama that Obama “ended.”
Keep these thoughts in the back of your mind as we enter the new year, before they get overtaken by all the things we didn’t know we didn’t know.
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