FSG Blog
December 31, 2015

Some Upbeat Scenarios for 2016

The New Year always provide an opportunity for hope – no matter how qualified, measured or improbable – that the future will somehow be brighter.  The coming New Year is no different. Arriving on the heels of a year when so much seemed to go wrong on so many fronts, 2016, it seems, is already weighed down with anxiety and even dread. And scenario planners tend to be a circumspect bunch.  Still, we hope.  Here are some reasons why:

  • The beginning of the end of ISIS may be in sight, even if the ultimate routing is far-off still.  The liberation of Ramadi in late December is strategically and psychologically significant for the Iraqi forces, their Kurdish and other tribal allies, and the coalition of nations supporting them. The next major target is Fallujah, which ISIS has occupied for two years and thus presents a much bigger challenge, say military specialists. But the tide does appear to be turning, if the Ramadi campaign can be replicated in Fallujah and then eventually Mosul. 
  • Real progress on a framework for dealing with climate change.  The Paris agreement surprised many skeptics who doubted that differences between developed and developing nations could be bridged on commitments to limit future greenhouse gas emissions.  The goal of zero net emissions by the second half of the century is highly ambitious and assumes, among other things, considerable help from technology to make renewable energy sources viable.  The way forward will not be easy. But just agreeing on global goals and a framework for achieving them is a huge step in the right direction.
  • Some brighter lights over the US economy.  No doubt, 2015 was a disappointing year for investors as just about all asset categories took a breather after three years of pretty spectacular growth.  There are certainly no guarantees that happy days will return in 2016, but the good news is that there are no bubbles to worry about either. What’s more, no one is freaking out over the mild hike in interest rates. Economic growth is unspectacular, but steady. If incomes rise, growth will pick up as consumer confidence broadens and deepens. Let’s hope.
  • Congress rediscovering the art of the backroom deal.  Passage of the education reform legislation “Every Student Succeeds Act” in early December was strongly bipartisan from the start.  The tax and spending legislation passed later in the month was not – it required a fair amount of old school back room wheeling and dealing, an encouraging development given its absence in recent years. It would be a stretch to assert that Congress is learning how to work together again, and election years are traditionally legislative wastelands. Still, the budget outcome demonstrated the power of compromise, which has evidently not disappeared for good.
  • By this time next year, the interminable presidential election campaign will be over.  Enough said.  May the best candidate win.

Happy New Year!


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