Jim Huston: Predictions for 2011

The 2010 midterm elections are turning out to be one of the most interesting election cycles in recent memory. The primary concern for the majority of Americans is jobs , jobs, jobs. To quote James Carville, Bill Clinton’s 1992 campaign strategist, “It’s the economy, stupid!” Foreign policy and the war in Afghanistan trail significantly behind in importance in the mind of the electorate. Add to this the recent unemployment figures showing that the number of Americans out of work is not improving. Vice President Joe Biden’s predicted “summer of the recovery” is quickly turning into the reality of the “fall of the continued fall.” If this is a recovery, it makes a patient with a flat-line pulse rate in an intensive care unit look healthy enough to enter a bout in a cage fighting championship match!

Voters are frustrated, but more importantly, they are uncertain about the future. Uncertainty is the rule of the day. Businesses large and small, as well as individuals, are not spending because predicting the future is a crap shoot. Congress hasn’t acted on extending the Bush tax cuts, which are set to expire early in 2011.

No one knows what their tax bills will be in 2011, let alone what the economy will do. Add to this the unprecedented debt load that we’ve incurred, the stimulus package that didn’t, the public outrage over the health care bill that was passed (and the way in which it was passed) – put these together and voters all over the country are shouting, “We’re mad as hell and we’re not going to take it anymore!”

My predictions for 2011. If volatility and uncertainty are the order of the day, as I think that they are, they are being challenged by unprecedented involvement and engagement by the electorate. The Tea Party movement is simply the resulting embodiment and symbol of all of the pent-up frustrations. Here are my best, worst and most probable case scenario predictions for 2011:

Best-Case Scenario. Conservatives in the House of Representatives enact some changes.

• The financial craziness of the last two years is countered. Confidence begins to return to all sectors of the market, which results in consumer and commercial cash reserves being released to fund pent-up demand.
• The Bush tax cuts are extended.
• 2010 Christmas retail sales improve, as well as sales for companies installing Christmas decorations.
• Consumer confidence improves, and we begin to see residential installation sales increase in 2011. This market is even stronger in 2012.
• Commercial entities also begin to fund installation projects that have been on hold.
• All sectors of the green industry market steadily improve over the next two years.
• Unemployment figures begin to improve slowly but steadily.
• President Obama takes credit for the improved economy and then enters the private sector on Jan. 20, 2013.

• The financial irresponsibility of the last two years continues.
• The health care bill that passed continues to be implemented with negative financial ramifications.
• The Cap and Trade bill passes which adds to our current economic doldrums.
• The Bush tax cuts expire.
• Unemployment figures do not improve, and all sectors of the green industry remain lackluster.
• President Obama blames George Bush for the continued poor economy and is sworn in for his second term on Jan. 20, 2013.